The market is flooded with mobile phone accessories. They are typically bundled with hardware and airtime to win business. Much worse than handsets, devalued by subsidies, accessories are perceived by end-users to be of little value, disposable nuggets thrown in to the bargain for ‘free’.
The result is an enormous mountain of spare parts on the scrap heap each year. Money-back 14-day returns guarantees on stock from retailers just exacerbates the stockpile. In terms of volume, it is as serious an issue as throw-away handsets.
Around 18 months ago, accessories distributor Genuine Solutions decided to expand its business by opening a separate arm dedicated to handling recyclable stock.
The decision saw the Genuine Solutions brand recast as the Group name of two distinct businesses: GS Ltd and GS UK, handling the traditional business of accessories distribution and new operation of recycling kit for national retailers and network operators respectively.
Genuine Solutions managing director Bav Majithia and project manager Christian McBride found cast-off accessories could be resold through the channel after being re-boxed and tested, instead of adding waste to the environment.
“If a retailer agrees to buy 100,000 accessories units and only 50,000 goes through channel, they’re stuck with them to dispose of,” says McBride.
“Non-movement products are no good as retailers need the latest accessories, not products which don’t shift after four months of being on display.
“The retailers could dispose of them through an open auction, but it can be risky. [The price could be considerably lower than the amount the retailer paid.] So they come to us as we can offer a good value proposition to them; we don’t devalue the product to sell it quick, it’s a longterm process.”
On the flip slide, there are clear benefits for Genuine Solutions’ original accessories unit: it can take receipt of new stock volumes to feed into its channels, as well as new stock margins.
“Our background has always been in accessories and we found that in our early conception as a group business that there was an oversight in recycling accessories,” says McBride.
At launch, GS UK built partnerships with handset recycling companies receiving batches of accessories, which had little experience of processing peripherals. GS UK worked with these recyclers, taking and managing accessories on their behalf.
“We started by working very closely with companies that were dedicated to recycling handsets. We found we could create an opportunity that would support businesses that worked exclusively or primarily with handsets but had to take accessories as part of full solutions,” says McBride.
“It’s not only the recycling companies which need this type of service. A lot of the retailers and networks want to be environmentally-friendly. Accessories had to be considered by them.”
Majithia says: “For them [handset recyclers], they understand the value of handsets, but accessories became a thorn in their side because they didn’t know what they were looking at and what value the products have.”
Full article in Mobile News issue 442 (June 29, 2009).
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