Blair said the company, which began operating last May but just launched publicly this month, is clearing about $1 million in transactions a month. It has $5.5 million in supply on the market, and $13.5 million in demand, he said. The bulk of its customers are in telecom, data center, education and government. The company is paid by the seller through a default commission of 20%, but it has membership plans for lower commissions.
Blair believes there is an opportunity for the company because he says many enterprises are only interested in getting rid of their equipment, not in maximizing its potential resale value. They believe that once IT departments investigate the potential resale of some of the equipment through their market, their minds will change.
"[Wholesalers] make their spread off ignorance," said Blair, who said his company's model ensures offering transparency on price.
According to IDC, the market for used equipment in the U.S. is about $70 billion.
Joseph Pucciarelli, an analyst at IDC, said that a lot of companies are restrained on what they can spend on capital equipment, and purchase used equipment to augment their existing systems. In many cases, they buy used equipment to keep compatibility with existing systems as way to keep their "support footprint" from expanding, he said.
Pucciarelli said companies typicall will unload used equipment to an original equipment manaufacturer (OEM) as part of a trade-in on an upgrade.
The company doing the upgrade won't get top dollar for their old IT equipment, but they may not see a selling alternative as worth their time, said Pucciarelli. Relative to the overall size of the transaction in an equipment upgrade, "you are talking about something that is pennies on the dollar [for the used systems,]" he said.
Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed. His e-mail address is email@example.com.
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