The cell phone industry has had quite a few banner years lately — particularly the refurbished cell phone industry. While the traditional primary market for new smartphones grew a respectable 3%, research from Counterpoint shows that the refurbished smartphone market grew a whopping 13% year over year in 2017, with continued growth in 2018 and notable expansion in emerging markets throughout 2019.
That’s in line with previous research from Deloitte Global. It predicted that 10% of premium cell phones new in 2016 will have three or more owners before they’re officially retired. That sort of high demand and rapid turnover drives the global refurbished smartphone market to be worth $39 billion by 2025.
Refurbished Cell Phone Markets Build Revenue and Loyalty
Now, some worry that refurbished products cannibalize that initial retail sale. After all, why pay full price if you can find something in nearly new condition for half the cost?
That’s a myth. A properly managed refurbished sales cycle offers a company multiple revenue points instead of simply the first at initial purchase. Not only that, but refurbishing products helps customers who can’t afford the product new. Those new customers win your brand loyalty and lower acquisition costs.
Only 25% of Cell Phones Are Resold – Are You Missing Out?
The refurbished cell phone market also has substantial room to grow. Just 25% of all cell phones are ever resold. Only a small fraction of these are fully refurbished. Companies planning to leverage their returns through the refurbishment market are well positioned to see double-digit percent growth next year.
This example is just for smartphone manufacturers, but it easily extends to the broader refurbished electronic device market. This is especially true as more people realize just how good certified used or pre-owned products are, particularly if they’re resold directly from the primary retailer.
For more tips on how to use the secondary market for your business, check out our cover story in Reverse Logistics, Issue #101.