Taking Your Consumer Electronics Recommerce to the Next Level

If you’re a business leader in the consumer electronics space, you’re well aware of how important it is to extract every dollar possible from your slow-moving, excess, and returned merchandise. Unfortunately, with warehouses overflowing and electronics constantly falling into obsolescence,  this undertaking is much easier said than done.  So what steps can your business take to maximize recovery on these items and boost its bottom line?

After years of success in the business, the experts at B-Stock have learned that there is no single “silver bullet” to the recovery question—and the sooner that brands and retailers can take an objective look at the data to learn the complexities of recommence within their industry, the sooner they’ll be able to realize their recovery potential.

What’s the Secret to Electronics Recommerce?

While there are general practices that tend to have positive effects, there are few hard and fast rules that guarantee maximum recovery. By far, the best course of action is to watch sales performance over time with an open mind, diligently collect data, and tweak your reselling approach accordingly.

Here, we’ll take a look at six practices that one major US consumer electronics retailer implemented to improve their own recovery rate—and while some might seem obvious, the nuances may surprise you.

1. Strategically Sized Lots Create Maximum Impact

One of the most obvious variables to examine when analyzing electronics resale performance is how the size of lots by estimated retail price affects the recovery. While this may seem simplistic, the numbers may highlight a chance at some easy wins.

When selling computers and tablets, trends indicate that smaller lots tend to recover more. In fact, the smallest lot sizes that B-Stock’s experts analyzed—valued at $6,000 and under—returned 30% more than the much larger $50,000-100,000 lots did. When selling all other types of electronics, like smartwatches, televisions, headphones, and cameras, “very large” lots outperform “large” ones by 32%.

To the casual observer, it might seem that the biggest lots will yield the biggest returns. Or perhaps one might figure that lean-running entrepreneurs would be most interested in small, affordable lots. In reality, neither of these approaches is entirely correct for all cases.

The takeaway is that if you have the ability to break your lots down into optimal sizes depending on what you’re selling, you stand to reclaim a good bit more than you already are. Whether your organization moves out just several pallets of corporate assets per year, or acquires and unloads hundreds of thousands of dollars worth of inventory per day, B-Stock can help you make the most of your lots through careful data collection and analysis.

2. Group Low-priced with Low, High-priced with High

A more complex variable to examine is the range of retail values within a specific lot. As it turns out, lots with a narrow range of item MSRP tend to recover more. The key here is to keep this range in item value as low as possible while configuring your goods for listings. This is because a lot that contains both high- and low-MSRP items will generally return substantially less than a lot that contains either mostly high-MSRP or low-MSRP items. 

While this trend holds true for all subcategories of electronics, the pattern is especially pronounced for non-computer & tablet lots—those that consist of smartwatches, televisions, headphones, and cameras. In fact, some of these lots with very low item price variance recovered over 80% more than those with the highest variance. Low-variance computer-and-tablet lots recovered nearly 30% more than their high-variance counterparts.  

But wouldn’t a buyer want the chance at finding a few premium items among their low-MSRP goods? This is actually not the case. The small business owners that buy unsold goods aren’t gamblers by any means, so when acquiring inventory, they prize transparency and predictability as much as any organization does. Take heed and sort items by value when you can.

3. Shipping Practices Can Bolster Bottom Line Too

Let’s shift away from product values for a few minutes. In addition to COG- or MSRP-based lotting, B-Stock’s analysts can also suggest several packing and shipping practices to help you protect and preserve inventory’s value.

• Fully wrap all orders:
  Applying plastic wrap to cover each pallet entirely, or security tape to all parcel boxes will protect the goods within from damage while showing the buyer that you care for the safety of their purchase. Just as packaging matters in the primary market, good presentation goes a long way in terms of buyer trust and perception.
• Avoid drawing attention to your shipments:
  You might be tempted to wrap high-value pallets in a unique color or to label them with highly descriptive placards. Unfortunately, such practices can single out certain pallets as especially valuable to potential thieves. Even opaque black wrapping can be a giveaway of a lot’s value if such materials are not used on every shipment. Uniformity is the most secure option if you’re looking to prevent theft from trucks and loading docks.
• Take pictures of finished pallets:
  If you have the opportunity in your process, you should seriously consider taking a photo of each finished pallet before it leaves your possession. This practice builds buyer confidence in you by offering transparency, protects your organization against liability and damage claims, and helps to monitor the overall quality of the shipping process.

While it’s hard to put a dollar value on the effects of preventative practices, a few small, cheap changes to your process today may well prevent some very large headaches in the future.

4. In Electronics Recommerce, High Price Per Unit Is King

This particular point may not come as a surprise to the experienced, but higher value products do have higher recovery rates. B-Stock has observed that if a given lot’s average retail price per unit is over $100, it will return much more of its value—83% more, in this particular client’s case—than one with an average per-unit price of under $35.

This is likely because many lower-cost items in the consumer electronics category are tech-adjacent products, accessories, and peripherals rather than standalone devices. For example, when a tablet ages, the value of compatible cases and screen protectors will sink along with it. 

Many businesses only make use of B2B recommerce marketplaces to resell their lowest value items. If this tendency sounds familiar, you may want to rethink your approach to electronics liquidation altogether. Some of your more valuable stock might fetch you highly desirable results—especially when sold via a global network filled with influential buyers that snap up electronics by the truckload. After all, buyers are unlikely to go through a specialized recommerce channel just to buy obsolete or low-end products. In fact, the top spenders on B-Stock’s marketplace tend to be sophisticated businesspeople in search of large, consistent volume—some are even so eager to get their hands on these goods that they’ve begun taking advantage B-Stock’s Contract Sales solution in order to guarantee a steady flow of goods over many months, all for prenegotiated prices. 

5. Reconsider Product Conditions

This point is perhaps the most counterintuitive of the bunch. To put it simply, condition does not necessarily equate to value. In the case of our particular retailer in question, it’s clear that the “Used – Good” condition tends to recover the biggest portion of its original value. How can this be?

Often, new and untouched items stay that way for a reason. Perhaps the manufacturer over-produced them, or a retailer over-ordered. Or maybe they went out of style or were pushed into obsolescence quickly by a competitor. Maybe they were never good or desirable at all. Whatever the case, the demand for them simply wasn’t there and the owner couldn’t sell them via the primary market.

Compare these untouched items to those graded “like new.” While “like new” items were opened, tried, and ultimately returned by consumers, they had at least enough consumer interest to make it off of shelves. Going even further, the “Used – Good” condition is often worn proudly by popular, high-quality products that consumers liked enough to use for a while before trading them in—think iPads, premium laptops, over-ear headphones, and smartwatches.

Never write off used electronics as worthless—every year, B-Stock sells hundreds of thousands of these devices to refurbishers who wipe and refinish them for a like-new look. By that same token, don’t bank on big recovery numbers just because your inventory is brand new.

6. Group Product Types Strategically

Of course, it stands to reason that certain types of consumer electronics are more exciting to consumers, and thus to secondary market buyers. Laptops, tablets, and smartwatches—a newer addition to the electronics category—take the top three spots in terms of highest recovery. Printers came in dead last, perhaps unsurprising in today’s screens-everywhere world. To put a finer point on it, smartwatches recover about seven times more of their original value than printers do. 

Mixed lots also appear toward the end of the pack in terms of value recovered. As you’ve probably gathered, mixed lots are risky propositions that don’t generally inspire much confidence in buyers. If you can sort for item type and group similar items, you’re virtually guaranteed a recovery boost if you’re selling any items of high value. For item types that perform worse than mixed lots, it will make sense for sellers to leave them bundled into mixed lots.

All of that said, B-Stock’s experts can analyze at a more granular level. Even within a certain product type, different brands offer significantly different recovery rates. In all categories in which it competes, Apple is the obvious standout. Even so, there is both considerable competition and recovery variation within the Laptop subcategory.

The Buyer Question

Another factor that your business must keep in mind when considering any form of electronics liquidation is your buyer base. Are you reaching the right business buyers? Are you reaching enough buyers to support your own growth?

B-Stock’s total bidders, bidders per auction, bids per unique bidder, and units sold are all on the rise. That means we’re living out our mission in real time—to generate demand among a large network of potential buyers to help retailers and manufacturers move out unsold goods as efficiently as possible.

And with changing seasons and the next holiday always on the horizon, buyers tend to move in certain predictable patterns. For example, throughout January and February top retailers and manufacturers will be inundated with returns. Rather than spend excessive amounts of time and money inspecting, repackaging and remarketing these items, it often makes more sense to sell it into the secondary market. Savvy buyers know this and will be especially active this time of year if you can provide them with attractive, well-lotted inventory to bid on.

Use the Network Effect to Keep Your Traffic Up

All of these phenomena point to a bigger trend: our users like a busy marketplace. Higher volumes of sales correlate to higher recovery rates. The sellers who take the time to analyze the numbers and adjust their auctions accordingly are those that draw the most new business, creating a positive feedback loop.

Scale this idea up, and you have what B-Stock calls the network effect. When sellers’ supply and buyers’ demand feed off of each other in a global marketplace, all parties benefit while new users are attracted to the platform. This ever-growing web of retailers, manufacturers, small businesses and entrepreneurs work together to propel a thriving secondary market.

Could Your Traditional Consumer Electronics Liquidation Process Use a Strategic Partner?

Excess electronics are a challenge as the costs of refurbishment, storage, transportation, labor, and other overhead all continue to rise. Pair these issues with mounting customer returns in a fast-moving industry, and you have a quite a problem on your hands.

Fortunately, there is real demand for the goods that you might not be able to effectively resell with in-house solutions. As a result, there is now a genuine opportunity to turn unsold inventory into cash while maximizing operational efficiency and saving precious space and time. The piece that too many businesses are missing is a partner to connect them to willing buyers and help them build a winning strategy.

As a leader in the secondary market, B-Stock can help your organization track the data that will help you execute and continuously optimize a strategy for managing your returns and excess electronics inventory while recovering as much as possible.

Ready to optimize your inventory reduction strategy? Contact us today to learn how we can help.