Key Learnings from the Article
1. Business Idea – Refurbished Goods Business
Refurbished business is very successful in present time. Even Amazon has also entered this business.
2. Goods Procurement – Refurbished Goods Business
To start the refurbished goods business, you can procure the goods in the following ways:
- Purchase certified refurbished goods in wholesale from alibaba.com
- Purchase broken electronic gadgets online
- Purchase refurbished goods directly from manufacturers
3. Customers – Refurbished Goods Business
Instead of retail customers, target big customers like educational institutions like:
- Polytechnic institutes
- 40% business of the refurbished goods comes from educational institutions.
- 20% of the business share is of medium/small/ micro-enterprises.
- Retail customers also have a share of 20%.
- NGOs/Government institutions have 20% share in the refurbished business.
4. Testing Functionalities and Manpower
- Check the functionality and defects of refurbished goods before selling them.
- Refurbishment process is as follows:
- Conducting diagnostic test
- Replacement of defective parts
- Cleaning inspection
- Hire mechanic for repair work in the starting of the business.
- You should contribute in filling online forms and manuals.
- Take the help of an expert technician once the business starts giving good returns.
5. Cost for Establishing the Refurbished Business
|Refurbishing tool kit (diagnostic kit )||10000|
|Business incorporation fee||5000|
6. Profit from the Business
For example, you are selling a refurbished iPhone the profit will be:
Cost of procuring an old iPhone = Rs. 40,000.
Market value of a new iPhone = Rs. 1 Lakh.
Pickup charge = Rs. 500
Refurbishment process cost = Rs. 7,500.
Selling price of the refurbished iPhone = Rs. 73,000.
Profit from selling a refurbished iPhone = Rs. 73,000 – (Rs. 40,000 + Rs.500 + Rs. 7,500) = Rs. 25,000 per phone.
If you sell two iPhones in a month, then the profit is Rs. 50,000
Offline retailers earn only a margin of 2% – 3% on selling a new phone.
However, on refurbished products, you can easily earn a profit of 15%- 20%.
7. Key Points for Refurbished Goods Business
- Label products as refurbished because customers appreciate transparency
- Provide warranty
- Provide relevant accessories
- Provide money-back guarantee
8. Pitfalls – Refurbished Goods Business
- Quality deterioration: Do not hide information else you may lose customers and this will have a negative impact on your business in the long-term.
- Duplicate products: These products are a direct threat to refurbished goods business.
Quikr and OLX platforms have high creditability. In such a case, a new refurbished business may not get customers easily. So, it is important to do proper marketing for the sustenance of your business.
Key Outcomes of the Article
- Target big customers for the growth and success of the refurbished business
- Create transparency with customers by labelling the products as refurbished
- Hire mechanic for the repairing of the products at the starting of the business