Tight Economy Renews Interest in Used IT Equipment

So if the price is right and the equipment is sound, is it a good idea for end users to rely on second-tier resellers? The answer depends a lot on what they’re looking for.

While many used IT equipment resellers offer configuration services, they don’t offer installation services. And most are not authorized resellers, so they don’t have the “touch” that partners do. However, equipment purchased from second-tier resellers does come with a warranty that is equal to, and in some cases better, than what the vendor offers with new equipment.

Network Hardware Resale, for example, offers a one-year warranty, which is “better than what they get from vendors or the channel,” Sheldon said. “We also offer an alternative to vendor maintenance that is much cheaper. We maintain equipment for its entire life – a lot of companies are holding on to equipment longer and delaying purchase of new equipment, and that’s where we begin to see that interest.”

Used IT equipment resellers also work in tandem with authorized resellers on many levels, from helping their customers procure branded equipment at a lower price to fit their budget to purchasing the customers’ excess inventory.

“There is a misconception that we compete with traditional VARs, because on one end I could be a competitor to VARs vs. them selling a new solution,” Seaber said. “Conversely, when a traditional VAR is bringing in a solution to an end-user client, they are bringing in a system that replaces an existing system or there is now excess equipment. A good VAR will look at the total needs of the client -- the customer will need to do something with that excess equipment. We can come in and partner with the VAR at the front end with a purchase agreement, and for the client many times the value of the old equipment can help them offset the cost of the new equipment. The smart VAR is wrapping that service in [by partnering with us] and helping the customer.

“If we develop the right strategic relationships, everybody wins,” he added.

Donovan and Sheldon both agree that their relationships with VARs are collaborative in nature, but sometimes they are in a competitive situation as well.

“It depends on the day and the deal. We do collaborate with a lot of partners both regionally and around the world and give their clients an option when there is no other,” Donovan said. “We actually think of our biggest competition as vendors or manufacturers themselves.”

“We have a lot of VARs who are good customers of ours. They have customers who come to them for end-of-life equipment or they don’t have the money and need the equipment,” Sheldon added. “I think in one sense it’s proactively very cooperative. On the flip side, when we’re selling to end user, we will often compete against another VAR. Generally, our customers are very supportive of purchasing from us, which mitigates a bit of the ire. Some split the difference, where they do some equipment and maintenance and we do some of the equipment and maintenance. It’s not ideal for them, but the VAR knows if they didn’t do that might not get the business.”

At the end of the day, all agree, it’s about saving the end user money.

“Companies are reducing their employees and budgets, but IT still has requirements that the board expects from them,” Seaber said. “They have to use more with less, and they’re to the point where they will buy refurbished equipment to do that. We’re already seeing that. This is a good time for our industry.”