Strong margins in the 2nd life cycle

STRONG MARGINS IN THE SECOND LIFE CYCLE
Used BMW instead of a new Fiat
March 14, 2018 | CRN
For several years now, the market for used IT has only known one direction: upwards. Together with good margins and the prospect of new business opportunities, this is convincing more and more resellers to enter the second-hand IT business.

If you want to buy a car, it is usually natural to look around for used vehicles. Due to the decline in value, customers are offered more for significantly less money. This is particularly true for relatively young used cars, which are fully up to date in terms of equipment and technology and are mostly well maintained and cared for. Even vehicle manufacturers and dealers take advantage of this effect by, for example, offering discounts through daily registrations or offering their customers annual cars and other very well-preserved vehicles with warranty packages similar to those for new vehicles. If the tax rules for company vehicles were designed differently, companies would certainly use this market more often.

What is completely natural for Germans' dearest child, however, has so far remained the exception in the ITC area. The demand is growing all the time, but only a small fraction of the newly sold devices and software are given a second life cycle after they have been retired, which in the business sector follows very fixed cycles. The advantages here are very similar to those of the automobile. In contrast to used vehicles, the signs of wear and tear are minimal with hardware and even - apart from perhaps the expiry of support - not at all. However, many companies are still skeptical about buying used IT. At the same time, they often have no idea what value their excess assets still have.

While no company would think of simply scrapping a three-year-old company car, this is part of everyday life with IT infrastructure. This is exactly where there is a great opportunity for specialist retailers to tap into the enormous, as yet untapped potential in this rapidly growing market. Professional partners who have specialized in used IT make it easy for them to enter this business area. “In recent years, processed technology has played an increasingly important role in the minds of consumers. This increased demand is also reaching us via the dealers, ”says Christoph Runge, managing director of api subsidiary COS Computer, describing the increased perception of sustainable offers in the IT sector.

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