Are you a repair shop looking to grow your business? Or exploring new avenues to boost profitability? Investing in selling pre-owned cell phones might be a good start.
The second hand cell phone market today is enormous. In 2021, it was valued at 251.09 million units, whereas it’s expected to reach 459.86 million units by 2027. The reason for this potential increase is the reduction in spending power due to the global economic crunch the world had to witness because of Covid19, the rise of eco-consciousness and movement towards reducing electronic waste.
Commodity prices have significantly increased post Covid19, whereas disposable incomes have shrunk. In fact, the cost of living rose by 8.7% in 2022, forcing people to spend less and switch to cheaper alternatives which is why the demand for reconditioned phones has surged.
The numbers show that the market for second hand cell phones is lucrative, so to enter, let’s go over some common standard policies that sellers adopt and how you can use them to beat the competition while avoiding the pitfalls.
Second hand phones and return period
The key to success in the open box cell phone market is trust. Customers are skeptical when buying a pre-owned device; therefore, building trust is essential.
This is why sellers provide a “return period policy” so customers can bring the device back if it’s faulty. Most sellers keep this to 30-60 days, depending on the device’s condition.
A return policy is a set of rules drafted by the seller to entail how customers can return or exchange products. Therefore, it’s essential to have a return policy that’s clear and customer-centric.
A clear return policy benefits both parties as customers feel secure buying the device; in fact, 54% of buyers are unlikely to buy a product they want if the retailer has a poor or unclear return policy.
As for the seller, they are only liable for a particular period but can make customers trust what they are selling.
So, how to stand out you ask? Providing an extended warranty can be the differentiator as you show customers that you’re sure of the product you are selling and are not shying away from taking ownership if things go south.
Setting up an exchange / return management system
Customer experience in today’s date is a significant factor to focus on, as it can make or break the deal for you. Putting in place a system for exchanges and returns makes the experience pleasant for both parties.
A return management system enables you to track and process customer returns swiftly.
From the seller’s point of view, with a proper system in place, you can manage and track your returns and exchanges, relist items in your inventory after inspection, and monitor your return’s financial impact. This also injects automation into your business, bringing efficiency to your business.
Returns and exchanges can be managed very quickly with the right POS software.
Quite often, buyers use their “shopping experience” to decide if they would do business with you again, so providing a pleasant experience is a must.
Provide incentives to convert returns to exchanges
When a customer returns a product for a refund, you incur costs such as return shipping, etc. therefore, a smarter business practice is to convert these returns to exchanges since it tends to incur fewer costs.
One way to attract customers to exchange their second hand phones instead of returning them for a refund is to provide them with an incentive. This can be anything from free shipping on exchanges or providing free accessories, special discounts, etc.
Another way is to upsell. The option to exchange your device through an upgrade is a great way to attract customers to drop the idea of returns and opt for an exchange. The customer will also make additional payments to settle the difference, so you get a repeat purchase as well.
Offering store credits against return of pre-owned phones
Along with providing incentives to lure customers towards exchange, another way is to offer store credits when a customer comes back to return a product for a refund. Customer can opt for this option and you can continue building your relationship with them.. Store credits allow customers to make purchases in the future, so technically, you’re not losing out on money as you would in case of a refund. While this may not be as effective as an exchange, it still is a better option than a refund. Store credits can be provided easily using RepairDesk.
To conclude, selling second hand cell phones is a great way to boost your sales as a phone repair business, but at the same time, customer-centric solid return policies and providing a great customer experience are vital.