Buying used equipment

I received this article on challenges of selling used equipment in the global arena. This article mainly talks of integrated circuit board fabrication and refurbishing, however many things in this article may be generalized to other industries.

For instance Mihin (whose speech is featured in this article , from BEST) puts the challenges of refurbishing equipment as "rebuilding OEM equipment to capabilities equal to OEM specifications; supplier response at factory location instead of single country location; providing capacity at a lower cost with recycled equipment; and project revenue to support local resources in country with fab(rication) locations." These also applies to many industries performing refurbishing activities abroad, nowadays China.

Then comes the advantages from customers-side. In Mihin's opinion "extending life of tools by refurbishing, lowering cost of ownership, local contact for warranty and maintenance..." Now, these are also valid benefits for many customers that use refurbished products, either they are consumer or business customers, though the benefits of using refurbished equipment is not limited to above.

Now, everybody in remanufacturing business and the academics in this field knows that neither the challenges nor the benefits can be squeezed into couple of sentences. The reason I started from this article is to make my point on a widely ignored component that presents challenges and in some cases benefits to the companies. I am talking about the behavioral part of buying used equipment. Although it is obvious that buying a used shoe and certified refurbished router/switcher is completely different, my thesis is attitude toward the first is generally at work when buying refurbished equipment of any kind. Does people really look at refurbished products as like new functioning products, or they see them as previously used, could-have-some-flaws type of products.

There is a lot to consumer behavior in remanufacturing/refurbishing but no research to date. But...keep coming back, there are news on this one soon.

Cycleon acquisition

Last year in a post I talked about Cycleon, a reverse logistics third party that arranges returns services through prepaid mailers and also track and store informations about returns. Recently Cycleon joined (or acquired by) Reverse Logistics GmbH. Reverse Logistics group acquired two other reverse logistics companies recently, increased its coverage in Europe remarkably. No financial information is disclosed, but I wonder what was 100% of Cycleon worth for a private equity firm?

Please read more about the acquisition here.