According to the Reportlinker.com study, the global market for used and refurbished smartphones was valued at 251.09 million units in 2021 and is expected to reach 459.86 million units by 2027, representing a CAGR of 10.23% from 2022 to 2027.
Along with the general rise of the secondary mobile market, there is a trend about an increase in the proportion of refurbished devices compared to used ones. People began to shift to refurbished smartphones more actively than to new or pre-owned units. Why is this happening?
Why is the refurbished device market on the top?
There are 2 main reasons for consumer preferences’ shift towards refurbished and used devices: economical and ecological.
The global post-COVID economic crisis as a whole forced people to rethink the usual spending, deprioritizing mobile upgrades. Such a trend is typical for crisis periods. People tend to buy devices they need at prices below retail. Refurbished phones are much cheaper than new ones, while the quality is often better than with pre-owned. Potential customers who hesitate before buying a used device because of doubts about quality or in terms of savings, pay attention to refurbished phones.
The mobile industry is one of the most dangerous and harmful for the environment. Production of new phones means, among other things, an increase in carbon emissions. Although many companies are striving for carbon neutrality, it has not been achieved yet. Environmentalists around the world are sounding the alarm that can no longer be ignored. People are increasingly becoming more conscious about their everyday decisions, making their contribution to a common sustainable future.
Used vs Refurbished
Now that we have figured out why the secondary market is expanding, let's talk about the specific advantages of refurbished smartphones over pre-owned ones.
A refurbished phone costs less than a new one, and its purchase is less risky than a used one. You can choose a pre-owned device on such trusted platforms as eBay, Refurbed, BackMarket or even from a friend, but it will still be more reliable to take a refurbished option. The reason is that refurbished units almost always come with a warranty, so you have a chance to seek help if something goes wrong after purchase. Thus, people overcome their pre-purchase fears and hesitation easily.
Companies that sell refurbished phones (usually) mind the quality of devices sold, so you don't get screwed over. Again, this has to do with the warranty. No one wants to stumble upon warranty payments and returns. This way you can be sure that your refurbished smartphone has passed all the necessary diagnostic checks and tests.
And last but not least — appearance. The main competitive advantage of refurbished devices is that they cannot be distinguished from new ones outwardly.
Top most popular refurbished phones globally
To profitably trade refurbished units, you need to clearly understand the dynamics of demand for specific models among consumers. According to Statista research, the most popular refurbished devices are iPhone XR, iPhone 11, iPhone 8, iPhone 11 Pro Max iPhone X. The next most popular models are shown in the chart below.
Where to purchase refurbished devices
There are many sites to find a refurbished phone. Basically, these are marketplaces containing used electronics in general, but there are specialized platforms as well. When choosing a platform, it is important to remember that the used and refurbished device industry is subjective. The concepts of grades and functionality evaluation are blurred. It is not always possible to trust the Grade A label on the packaging. Here are some sites with proven track record that you can definitely trust:
2 Back market
5 Amazon Warehouse
6 Best Buy
A good option also would be to buy a refurbished gadget directly from the manufacturer. Apple and Samsung, for example, refurbish their devices. It will certainly cost more, but in this case, you can be sure of the quality because such giants value their reputation and clearly monitor all the working processes. Refurbished phones from the manufacturer are processed by the same engineers on the same equipment as the new devices. Such phones are really indistinguishable from new ones.
Key refurbished market trends
Let's take a look at some of the trends within the refurbished device market.
- The fallout from the global post pandemic crisis stimulated the cheaper refurbished phone segment as people cut back on discretionary spending which means they only buy technics for urgent needs. There has been a significant change in the preferences of trade-in buyers as well: instead of taking flagship gadgets, consumers are more likely to buy mid-range devices.
- The pandemic forced most people to switch to a remote work and study format. In the new reality parents had to look for inexpensive devices for their children to attend online classes and employers to look for corporate equipment to establish a workflow.
- From a business perspective, selling refurbished equipment is a way for many brands to attract into their ecosystem those buyers who would not buy their flagship devices because of high prices.
Whether you refurbish devices or work with already refurbished techniques, the profit of your business directly depends on the accuracy of device testing. Because the industry is high-risk and low-margin, companies cannot afford to sell low-quality phones. If the buyer discovers a missed defect, the company will incur financial losses due to a long-term warranty. Thus, refurbishers attentively test devices both upon buying of stock and before shipment of goods. Quality control is a top priority.
How can NSYS Group help?
- Certified diagnostics and grading of devices detecting more than 100 possible defects
- Elimination of human errors through automated testing
- Fast and effective data erasure software ensure total cybersecurity
- Special used device warehouse management system helps to keep every unit under control
- Multilingual 24/7 customer support solve any issue with product service
You probably underestimate how much profit your business can actually bring. Open new business horizons with NSYS!