The Secondary Market is Still Thriving

cardboard box, secondary market, gray market, grey market, nib, nob, new in box, new open box, IT hardware, eol, end of lifeEarlier this week, we looked at how the advent of the Internet created an open-source free market of sorts. The Internet gave more power to the people, allowing for sharing and trading from consumer to consumer. Eventually, consumers themselves began starting their own small business within this online marketplace. When you bring a pizza to the party, everyone’s gonna want a slice.

Soon enough, programs like Napster arrived, allowing for what is known as peer-to-peer, or P2P, sharing of files—in this case, digital music files. Metallica, among a few other big-name bands and major labels, lashed out at the web upstart (founded by a college dropout and a web wunderkind) with lawsuits. Even though Napster settled the lawsuits and lost its relevancy among the general public, it changed the game in the music industry, and forced even the big leagues to adapt to these changes. Since then, many small businesses, websites and companies have sprung up to become players in the music industry.

For years, Cisco had labeled the secondary market for IT hardware as a gray market, stating that when products are purchased through this “gray market,” rather than through Cisco, they (Cisco) cannot guarantee the source and quality of those products. They shunned the secondary market for years, considering it a threat to the sale of their new equipment. Finally, back in the fall of 2011, Cisco announced that it will embrace the resale of its own used equipment by reselling its own refurbished equipment to non-authorized Cisco brokers on the “gray market.”  Secondary equipment resellers have been waiting on this “If you can’t beat them, join them” attitude for quite a long time.  And while Cisco still doesn’t make it easy for “gray market” vendors to sell to Cisco end-users from outside of the channel, their own sales of used Cisco equipment act as an affirmation that what they label as the “gray market” is actually a legitimate marketplace.

The secondary market is an actual ecosystem of tech resellers and active customers (end-users) that are buying and selling such equipment outside of the channel endorsed by manufacturers. Secondary-market resellers are best known for providing used or refurbished equipment at a fraction of the cost of if it were to be purchased new.  It is also worth mentioning that not ALL of the equipment on the secondary market is old equipment. Many secondary resellers provide a quantity of new equipment that was purchased from a manufacturer’s overstock. Bankruptcies have terminated many IT projects, and changing business demands can cause the end-user to actually never utilize or even open the products. Resellers can acquire used equipment from IT organizations that are upgrading or shifting technologies. These resellers then test and refurbish the equipment thoroughly before making it available for resale. There are many benefits of buying in the secondary market; value proposition on the cost of new vs. refurbished equipment is the main thesis here, but let’s not forget product availability and quick shipping times. Most resellers have inventory that ranges from current back down the line to 5 years ago. This gives the ultimate end-user a “price range/equipment needs” to work with when deciding which products to buy. Shipping most products within 24-72 hours–compared to the 3-5 weeks it takes for a manufacturer to build the product–holds an immense value alone.

Here at planIT HARDWARE, we take pride in providing our customers with new and refurbished equipment. Every product sold has a one year warranty (for end-users) and has been put through a series of tests by our in-house technicians to ensure that it is in great working condition.

 

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