Used smartphones are becoming best sellers

Dusseldorf A new cell phone every two years? For many people, that was standard for a long time. Always having the latest model from Apple or Samsung was considered an important status symbol. But the prices for premium smartphones have recently risen sharply – due to the high inflation, but also the margin orientation of the manufacturers.

The demand for new smartphones is falling, the market researchers from Gartner expect a drop in sales of four percent. Used and refurbished devices are increasingly in demand. The provider Rebuy, for example, sold 430,000 used electronic devices on its platform last year.

The specialist for used electronics has refurbished around 121,000 smartphones. The year before it was not even 100,000. “People have less purchasing power, many are practically forced to see what alternative there is to a new device,” observes Rebuy boss Philipp Gattner.

Rebuy isn’t the only used cell phone provider seeing sales soar. However, consumers cannot be sure that they will get flawless devices everywhere.

In a representative survey by the price comparison site Idealo, two-thirds of those surveyed stated that they were increasingly buying second-hand or second-hand goods because of the rising prices. It can definitely be worth it: Idealo has determined an average saving of a good 30 percent on used smartphones compared to new devices.

Sales of used cell phones of 67 billion dollars

“In recent years, sustainability has been the decisive argument for buying a used device,” observes Rebuy boss Gattner. “Today, the price also drives customers to us,” he says.

This is already clearly reflected in the balance sheet figures. In the past financial year, Rebuy recorded sales growth of 13 percent to more than 200 million euros. “The potential is huge, we want to continue to grow with the market and are preparing for further expansion,” says Gattner. In addition to Germany, the company is active in six other European countries.

The market is indeed promising. The analysts at IDC have estimated that around 67 billion dollars could be sold worldwide in 2023 with used smartphones alone. Not only mobile phones from private households find their way into resale. Old devices are brought onto the market in particular by companies that regularly replace their IT equipment.

The special marketplace Refurbed, through which dealers can sell used devices, also wants to benefit from this trend. Consumers want to make a contribution to more sustainability, even despite high inflation, says Refurbed co-founder Kilian Kaminski. “Consciously consuming more sustainably is possible and easy, because there are also inexpensive alternatives such as refurbished devices,” he emphasizes.

Refurbed sees that consumers are increasingly asking for cheaper products or products that can be delivered quickly. Many consumers are becoming increasingly aware that supposed technical innovations when changing models, such as higher display resolution, better battery performance and more storage capacity, no longer justify the rising sales prices.

Stiftung Warentest names the best providers of used smartphones

More than a million electronic devices were sold on the platform last year. The company puts the total turnover generated by dealers via the Refurbed platform at “well into the three-digit million range”.

The category with the highest turnover on Refurbed is smartphones, with the most popular device being the iPhone 12. Apple Airpods are the most popular product at Rebuy, while the iPhone models 8 and 11 are particularly in demand when it comes to mobile phones.

There are many ways to buy used cell phones and save money. The cheapest offers are likely to be found on Ebay or Ebay classifieds. According to Ebay’s Recommerce Report, 88 percent of users of the online portal have bought used items there in the past few months. But in these marketplaces, where many products are sold by private individuals, there is no guarantee that the devices will be faultless.

Philip Gattner

The rebuy boss explains that his company has been operating profitably for years.

(Photo: Rebuy)

Stiftung Warentest has therefore taken on the suppliers of so-called “refurbished smartphones”, i.e. used cell phones that have been refurbished. The conclusion of the testers: Even these devices, which were actually sold as technically overhauled, are not always as good as promised. However, some are better than advertised.

Two variants were tested: online retailers such as Asgoodasnew, Clevertronic and Rebuy, and sales platforms such as Back Market, Ebay Refurbished and Refurbed, on which different retailers offer their devices.

Rebuy performed best in the test among online retailers. The biggest savings came from Clevertronic. In terms of online platforms, Back Market came out on top in the test, followed by Ebay Refurbished. With the platforms, however, you have to keep in mind that the quality also depends on the respective dealer who sold via the platform.

Rebuy gives a 36-month guarantee on refurbished devices

If you buy from a retailer, you can be sure that they are liable for twelve months for material defects that were already present at the time of purchase. The provider Rebuy even gives a 36-month guarantee.

In order to be able to give this guarantee, Rebuy has developed a complex technical procedure with which they examine products: what damage they have and whether they need to be processed. For the smartphones, this is largely automated in the logistics center in Berlin-Falkensee with the help of robotics and artificial intelligence. At this location alone, 85,000 smartphones were automatically analyzed and evaluated last year.

>> Read also: First German billion-dollar start-up in the circular economy – why the used market is booming now

The advantage of extensive automation is also a lean cost structure. At the same time, this has contributed to the fact that Refurbed has been operating profitably for years. “We have had a positive Ebitda since 2019,” says Rebuy boss Gattner.

All providers have set themselves growth goals. And they have been well equipped to do so by their investors in the past. In August 2021, the Viennese company Refurbed closed a financing round of 45 million euros. The French competitor Back Market even received 276 million euros in the same year.

However, Rebuy sees itself in a comfortable situation here too. “Many start-ups now have to restructure because they can no longer get follow-up financing,” Gattner points out. Rebuy carried out the restructuring four years ago in order to achieve the goal of profitability. “Now we can earn the money we need for the expansion ourselves,” says Gattner.

More: 1400 euros starting price – Samsung relies on “super premium” products for smartphones

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