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30 Apr 2009
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Networking vendors have been urged to embrace the refurbished market as research suggests second-user equipment is enjoying a surge in popularity.
Figures from refurbished dealer trade body the United Network Equipment Dealer Association (UNEDA) found that two-thirds of members grew their business in 2008.
More than two-fifths saw increased demand for pre-owned kit from large enterprises while 76 per cent expect increased revenue this year.
Further reading
Top vertical markets included telecoms, financial services and education and 42 per cent of respondents reported some customers buying gear on more than 20 occasions last year. Almost 90 per cent of respondents plan to add staff this year and Rod Haddrell, managing director of UNEDA member tindirect, claimed refurbished is gaining traction in the current climate.
“Right now it is coming to the fore,” he said. “The market has really been given a shot in the arm.”
Fighting “negative OEM propaganda” and increasing public awareness of the second-user market was earmarked by many UNEDA members as a top priority for 2009. Haddrell claimed approaches to refurbished vary between vendors.
“We need to make sure manufacturers desist denigrating this marketplace which serves such a useful function,” he said. “IBM and HP have long been fairly grown up about second user and have been grudgingly accepting. Cisco looks to make moves within this arena without ever really accepting it.”
Sarah Beene, marketing communications manager for refurbished VAR Network Hardware Resale, claimed Cisco risks losing ground if it ignores customers’ desires. “As companies cope with tight budgets there is enormous potential for refurbished equipment,” she said.
Rob Bamforth, principal analyst for Quocirca, said: “Vendors need to somehow deal with it in an opportunistic way. It is a way of reaching untapped customers and VARs can offer add-on services.”
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Do you agree?
Refurbished equipment stock standard
Refurbished equipment should be part of every distributor's service offering (Second-user kit heads for first place in market, 5 May 2009). It enables resellers to provide their customer base with a more holistic commercial offering and allows them to demonstrate their appreciation for the end user?s historic investment and understanding of present budget restrictions.
Many existing products have long life spans and are able to offer much of the functionality of newer products and can deliver a higher level of return on investment. In these instances physical upgrades are only necessary for major releases and/or new technologies where the cost saving and performance improvements are dramatic. The second-user market for vendors such as Cisco and HP is huge, offering savings of up to 90% - something that can obviously not be ignored during a global recession.
Alongside refurbished equipment Zycko has seen an exponential increase in sales of our 'ProLabs' range of accessories and components. Prolabs offers huge cost savings to the reseller and service providers while delivering 'same quality' compatible components i.e. GBIC's, memory upgrades and cabling products that resellers purchase directly from vendors such as Cisco and HP who re-badge 'original component manufacturers' (OCM) products, adding on huge margins. Obviously this allows resellers to combine these products not only with refurbished but also incorporate into new product sales as Prolabs develops their product range in line with new market trends. In many cases Prolabs offers longer warranties than the vendors i.e. Cisco and HP.
Another way in which the second-user market helps companies to reduce spending is when they have surplus and/or redundant equipment 'lying around'. If this still has inherent value, good distributors will consider trade-ins and buy-backs according to the market value. Zycko also offers it's own repair service called 'Smartpac Repair' which allows the customer to extend the life of faulty, out of warranty network equipment; reliably, quickly and affordably. Why replace when it's smarter to repair!
Posted by David Galton-Fenzi | 07 May 2009
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