April 1, 2023

Stacked laptops for reuse and recycling against a white background.

  ITAD service providers saw used equipment prices skyrocket during the pandemic; now they have to reckon with a market leveling out at lower values amid recession worries. | Ari N/Shutterstock

Prices for refurbished PCs have fallen in the past year alongside ongoing uncertainty in the economy, but ITAD players said the market appears to possess leveled off – for now.

Chris Ko, CEO and co-founder of electronics recycler ER2, said he’s seen the drop in demand for desktops of around 30% previously year. Laptop demand leveled off and is holding steady, he added, but pricing has dropped by about 40%.  

ER2 is headquartered within Mesa, Ariz., and also has facilities in Sacramento, Calif., Memphis, Tenn., Nashville, Houston and Council Bluffs, Iowa.  

The company’s sell-through rate within a 30-day period is around 52%, Ko said, “which means we’ll sell all our products in a 60-day period of time roughly. ” 

He additional that ER2 has roughly 15, 000 laptops in inventory, and moving through that much product in two months demonstrates demand in the marketplace.

“But prices has dropped off, ” he stated.

The economic factors affecting the utilized PC market are multifaceted: inflation’s impact on consumer spending, corporate IT shifts tied to remote working and pandemic policy within Asia, to name a few.

E-Scrap News recently spoke with a handful of refurbishers to understand what they’re seeing in the market, as well as how they’re responding.

On the heels of the ‘phenomenal’ time period

George Hinkle will be president of ITAD plus e-scrap recycling company Arcoa Group, which is headquartered in Waukegan, Ill. and has processing locations in that city as well because Akron, Ohio and Kenosha, Wis.

Hinkle said used equipment costs started to soften in spring 2022, but by December they had begun to level off. He pointed out that the decline was from extremely high pricing immediately following the particular pandemic, which boosted demand for the computer equipment needed to work from home.  

Those stellar prices drove a “phenomenal” 12 months for Arcoa in 2021, Hinkle mentioned.

“It decreased from something that was very unusual, ” he said. Arcoa had forecast a drop in utilized equipment prices in 2022, but the mid-2022 decline has been faster than the company expected, this individual added.  

On the West Coast, Albert Lozano of ITAD company Digital Green Global said his company sells used equipment almost exclusively through e-commerce channels, with the vast majority of sales to North American customers.  

All within all, secondary markets have got “been stable, ” he or she said.  

Digital Green Global processed over 1, 000 tons of material in 2022, most of it destined for recycling where possible. In terms of resale, the organization sold over 25, 500 used consumer electronics in 2022, not including harvested components or recycling commodities. His business, which mostly serves large corporate clients, has facilities in Morgan Hill, Calif., and Dallas, Texas.  

Used consumer electronics haven’t been moving as fast recently, and they’ve been selling with regard to roughly 10% to 15% lower costs than they fetched within pre-pandemic marketplaces, Lozano said. But markets have remained good regarding laboratory testing equipment plus server gear, he added.  

One category that will has fallen is recovered memory sold and shipped to Asia. That part of Digital Eco-friendly Global’s business was once a big profit generator yet came to an almost complete halt after China’s coronavirus crackdowns, he said.    

Impacts on client revenue share

For ER2, the marketplace changes means that clients are making less money upon each item.  

“It’s our customers themselves who, from the revenue-share standpoint, are getting much less because we’re not getting as much value back, but they’re understanding of that, ” Ko said.

This individual said the company has also changed its parameters on what’s worth refurbishing, because even though older products still sell, the particular lower prices mean it’s often no longer worth the cost.  

“It starts in order to become no longer viable to refurbish everything that will could be reused and that’s the problem, ” Ko stated, adding that for ER2 the break even point is regarding $80. Any device that will can’t sell for more than that is usually one that the company would lose money on. Right now, that means laptops that have a sixth-generation or old Intel core processor don’t make the particular cut, this individual said.  

“It’s our customers themselves who, from a revenue-share standpoint, are becoming less due to the fact we’re not getting just as much value back, but they are understanding associated with that. ”
–Chris Ko, TOP DOG and co-founder of electronic devices recycler ER2.

Arcoa offers its roots in office copier/printer resell, and Hinkle said the dynamics have varied intended for different types of devices. For printers and networking products, he mentioned, the marketplace has continued to be strong, along with softening more pronounced among laptops plus desktop PCs.  

Some components have seen major market modifications. RAM and processor ideals, which are heavily associated with Asian markets, are down significantly, he said.  

Hinkle did note that since the particular late-spring/early-summer period frame, when there had been a lot of pricing volatility, the market provides calmed.  

“From what I can tell, I think the particular markets possess leveled away for us, ” he or she said.  

A changing industry

The particular decreasing need for desktop computers will continue, ER2’s Ko predicted, since of the rise of remote work.  

Businesses aren’t bringing as many employees into the office right now, he stated, “and if they do it’s not really going to be via a desktop. ” 

“Those are going to be less and much less in the workplace, yet I believe there’s an interest through schools plus worldwide marketplaces, ” Ko said. “In Dubai, India, the rest of the world where they’re not as concerned with mobility because a lot of people do not necessarily have got home internet, so they’ll be practical there. ” 

Though desktops are nevertheless sought by education institutions for pc labs and in international markets, prices and requirement has furthermore fallen away from in those markets, too, he additional.  

In June, resellers also pointed out softening demand in international marketplaces because associated with rising costs to ship items.  

“From what I can tell, I think the markets have leveled off for us. ”
–George Hinkle, president of Arcoa Group.

Robin Ingenthron, founder and CEO of Vermont-based Good Point Recycling, mentioned his overseas buyers of used equipment are hurting right now. The couple associated with them aren’t placing orders for computers at any price, and some possess placed purchases but Ingenthron is not keen to deliver equipment to them because they still owe Good Stage Recycling cash for past orders.  

He suggested that stimulus money throughout the pandemic may have supercharged the market earlier, contributing to the demand decline today.  

“People might have got purchased 2 years of new equipment in one year, ” he said, “which is definitely part of what they blamed for that inflation – the particular overheating associated with the economic climate. All that stimulus money. ” 

However, he is obtaining a lot more calls for used desktop monitors, though the price being offered is fairly level. He or she thought the marketplace for desktop monitors was declining, he said, so the recent uptick has him puzzled.  

Weathering the coming storm

As economists continue in order to ring alarm bells, companies are bracing for a deeper economic downturn as pumpiing remains high and consumers worry about meeting basic needs.  

HP recently announced it plans to cut the workforce simply by 10%, with HP TOP DOG Enrique Lores telling The Wall Street Journal that will “we believe that at this point it’s prudent not to assume that the particular market will turn during 2023. ”

How can ITAD companies weather the market adjustments?  

Ko said he’d love in order to see the ability for certified refurbishers to sell partially repaired items to people interested in making their own modifications, but that’s currently not an option under most certification requirements. It could help keep older models that don’t otherwise make the price cut in circulation, he stated.  

“Being able to potentially say, ‘Hey, this has already been completely tested, the components function, it just needs a battery, ’ plus then someone might actually be willing to buy that and they might put their battery in and do whatever they want, ” he mentioned.  

Ko said this individual believes pricing for laptops will stay constant at its current degree for some time. “I don’t foresee it arriving roaring back again at all, ” due to some remaining supply chain issues. He has noticed businesses pulling back upon spending more than recession worries.  

“A lot of our own clients are usually Fortune 100s and they really have decided to be a lot more conservative on their hiring, and also the same thing on their own overall business itself, ” he said.  

“All downturns, starting with the particular 2008 financial crisis, showed that ITAD businesses have furthermore struggled in order to sustain company and suffered. ”
–David Daoud of Compliance Standards.

David Daoud of ITAD business research firm Compliance Standards said within a recent podcast that will PC need has taken some hard hits, combined with inflation and rising labor expenses, which will certainly affect the ITAD sector.  

“The number of PCs delivered in 3Q this year was down from last year, confirming that requirement overall can be shrinking, ” he stated, calling it “perhaps the most alarming piece of information because the seasonal trend of back-to-school has been broken. ” 

Although many people claim that whenever economic growth slows down, demand for utilized equipment rises, Daoud mentioned there’s simply no empirical evidence to back that up.  

“All downturns, beginning with the 2008 economic crisis, showed that ITAD companies have also struggled to sustain business and experienced from the particular downturns, resulting in subsequent consolidation of the sector, ” he said. “There is certainly also the fact that the cost difference between a refurbished device and a new system has been shrinking and it is not so substantial, making it more challenging to convince buyers in order to endorse used equipment. ”

Lozano stated he thinks a wider recession is coming, yet he will be confident Electronic Green Worldwide can withstand it. He’s been in company for over three decades and it has experienced several market downturns in the particular past, he or she said.  

“You just have to be safe, play smart and ride the markets, ” he said. “Be realistic. ”

More stories about Markets

IT Renew

Leave a Reply

Your email address will not be published. Required fields are marked *