With the improvement of people's material standard of living, the frequency of item replacement is gradually accelerated. 90, 95 young groups, the degree of acceptance of the transaction of second-hand idle cell phones, laptops, cameras and other digital products is increasingly high.
The huge stock of used cell phones and other digital products provides the basis for the development of the recycling market. Currently, there are very many companies engaged in the cell phone recycling industry, including dozens of platforms such as Love Recycling, Recyclebot, Le Recycling, and Easy Recycling.
The industry of cell phone recycling seems to have no profit, why is it that more and more businessmen are joining it now, including Internet platforms and offline markets. What is the mystery behind this unprofitable business and what do these platforms rely on to survive? Why is business still good? In order to find out, we conducted some market research.
Text: Fire Fire (Industry Window Exchange)
Offline attraction effect is mediocre
In Beijing, there are many Love Recycling and Idle Fish Recycling stores. The survey found that the love of recycling based on offline channels of traffic, in shopping malls and high traffic flow in the shopping layout of offline stores, mainly to carry out the second-hand cell phones, laptops, tablets, photography and video cameras, smart digital products, such as recycling, as well as still for the new. Online, Love Recycling has reached a deep cooperation with Jingdong, relying on Jingdong's strong traffic advantage to expand its business.
Idle Fish Little Station Recycling Treasure is an offline store launched by Idle Fish in cooperation with Recycling Treasure, which is mainly engaged in recycling used cell phones, laptops and tablets.
I came to the Love Recycling Shuangjing Fuli City store, located in Chaoyang District, No. 65, East Third Ring Road, observed an hour, there is a 90 boys and a 95 Ms. Liu, went to consult the cell phone recycling related services. Boys asked some digital products recycling related issues, then turned away.
Ms. Liu sold her unused Vivo X20 64G version to Love Recycling. Ms. Liu in the love of recycling staff under the guidance of the opening of the phone recycling self-service assessment of prices, including: can use the situation, model, storage capacity, purchase channels, the appearance of the screen with or without scratches, the screen whether the screen is splash screen, whether the repair situation, etc. options, the system assessed the price of 460 yuan, and the actual price of the transaction for 415 yuan.
In this regard, the love of recycling staff explained that the recovery price is in accordance with the phone without wear and tear, if the screen appears to be splash screen and other problems will be deducted.
According to Ms. Liu, the phone just used a year out, when spent nearly 3,000 yuan to buy. Now sold because they bought a new cell phone, the phone is idle without use, sold for a little money, so sold. When I checked the market price online, the reference offer is between 1599-1846 yuan. On the one hand, it shows that the price reduction of the cell phone is large, on the other hand, the recycling price is relatively low.
I took out their own 3 years ago spent nearly 7,000 yuan to buy the iPhone 6S 128G version of the love of recycling machine assessment is worth only 280 yuan, and the machine screen shows "expected to drop another 16 yuan a week later". As for why the price is so low, love recycling staff explained: this is in accordance with the machine to assess the price of second-hand cell phone recycling with the length of time on the market, sales, market prices. Buy a new cell phone, generally use half a year later, the evaluation price will be reduced by half, the longer the less valuable.
Then I came to the idle fish station located in the Dongcheng District Guorui shopping center recycling treasure store, observed an hour, only a man went to consult the cell phone recycling. The man asked some cell phone recycling turned around and left, did not produce transactions. According to the idle fish station staff, idle fish station mainly do cell phones, notebooks, tablet PCs, three categories of recycling, temporarily do not do trade-in services, and will expand more second-hand digital products recycling.
I took out my iPhone 6S in the idle fish station machine evaluation of the price of 250 yuan, and display: "used cell phone average price of 232 yuan, is expected to fall by 53 yuan next month." In the self-service valuation machine, idle fish small station and love recycling cell phone assessment options are similar.
Although there are some differences in the price of the same phone on the self-service valuation machines of Love Recycling and Idle Fish Kiosk, both valuations are relatively low.
After that, I love recycling in love recycling Guorui shopping center store, examined nearly 1 hour, there are 3 people went to consult the cell phone recycling matters, and none of them produce transactions. One of them, a 90-year-old boy, said, "He spent 3,400 yuan 4 months ago to buy Huawei mate 20, and now the recycling price is only 1,750 yuan, the drop is too big."
In the Love Recycling Oriental Xintiandi store, I observed for half an hour, and no one went to consult.
Through the survey, it was found that fewer people inquire about cell phone recycling, and they mainly inquired about how much their cell phones were worth with curiosity, and the probability of generating a transaction was extremely low.
According to a cell phone industry sources love recycling is the domestic used cell phone digital recycling company earlier, is also the current industry benchmark. Some small personal cell phone digital repair stores also do cell phone recycling, recycling can also be sold to the love recycling and other recycling platform.
Another industry source said: "In addition to Jingdong investment love recycling, Ali idle fish, and Suning 3C digital recycling, Tencent investment turn, etc. are in the layout of the second-hand cell phones, digital products recycling. Various merchants recycling prices are about the same, the competition is relatively fierce. These giants have layout digital recycling, on the one hand, in order to get more new users, on the other hand, to improve user retention."
So why have Love Recycling and Idle Fish Little Station used recycling platforms laid out offline, and how do they generate revenue?
Platforms have other ways to make money
Used cell phones and digital recycling platforms offline brick and mortar stores may seem to have low foot traffic and low turnover rates, but in reality they have a variety of ways to generate revenue.
First of all, low sale, high sale. Whether it is Love Recycling or Idle Fish Station, they both recycle used cell phones at low prices and then sell them to their partners or consumers. For example, in the strategic partnership between Ai Recycling and Jingdong, after recovering cell phones at a low price, they can be sold on Jingdong's own business at a higher price; Idle Fish also recovers used cell phones at a low price, and sells them at a higher price at its partner, Cola Youpin.
And used cell phones and digital products are in high demand. There are many individual sellers and buyers on the second-hand idle goods trading platforms such as Turn, Idle Fish and so on. It shows that there is a large market demand for used cell phones and digital products.
In addition to buying low and selling high for used cell phones that work, including phones that don't turn on, they can also be recycled at low prices by used recycling platforms and sold to cell phone recycling vendors for a percentage of the difference in price.
In the process of examining used cell phones and digital recycling, the staff of the recycling platform will tell potential users that the price of used cell phones is falling every day of the week, and the price will be getting lower and lower in the Love Recycling and Idle Fish Station if they don't sell them, and it will also be shown that the price will fall in the future in their own price evaluation machine. And with the introduction of 5G phones, 4G phones will get cheaper and cheaper. Thus, the user is induced to make a decision to sell the idle used digital products on hand as soon as possible at a low price.
Secondly, trade-in, low price recycling, but also sell new phones, both sides of the profit. Take Love Recycling as an example, the platform acquires digital products at low prices, which would have been equivalent to purchasing used cell phones, and is able to earn a difference in price. Even bad phones can be sold as parts. Then, the recycling platform itself is also a distributor, selling mainstream new cell phones and digital products at market retail prices, able to earn profits.
Although the trade-in, consumers can get recycling platform 100-500 yuan subsidy, but the wool comes out of the sheep's body, this subsidy is far less than the money earned by the platform. And there is no clear standard for this subsidy, it's all internalized by the platform itself.
In other words, used cell phone and digital recycling platforms not only do the buying and selling of recycling, but also act as distributors at the same time.
Again, inducing users to become members, charging membership fees, and digging deeper into user value. In the survey, it was found that Love Recycling hopes that users who have sold used cell phones or exchanged them for new ones will spend 49 yuan/year to become members of Love Recycling. You can enjoy benefits such as applying a film once a year and giving a data cable for free. However, some users said that the sticker film and data cable are far from being worth 49 yuan, and some street stores are very cheap. Moreover, in most cases, when users buy a new cell phone, it would have come with its own data cable, but also at that time to paste the film, the availability is not great.
However, in the Love Recycling Oriental Xintiandi store, the staff said that users spend 49 yuan/year to become a member, you can enjoy the recycling of second-hand cell phones, digital 6% plus price. And the activities of the Love Recycling platform will be synchronized with Jingdong Mall. For example, the evaluation of the recycling price of 500 yuan, after becoming its members, the final recycling price is 530 yuan.
In this regard, an Internet analyst said, "Usually, after consumers spend money to become a member of a brand, the brand will also often push some information to members, often mostly marketing ads, to induce users to consume again. After consumers spend money to become a member, if they do not enjoy the relevant value-added services, this money is equivalent to spending in vain."
Moreover, the store staff said that Love Recycling also sells cell phone films and data cables. It is also equivalent to, Love Recycling is selling cell phone peripheral derivatives. Although the total price of cell phone film and data cable is not high, the gross profit is very high, and it can also bring in part of the income.
Finally, the development of rental services. In the Love Recycling APP, click "rent a cell phone", you can enjoy the rental service. For example, on the Love Recycling platform, the Vivo IQOO Pro 5G version is available for rent for 12 months at a cost of 228 yuan per month, and a year's rent costs 2,736 yuan, while the current market price is 3,798 yuan.
If a consumer rents for 1.5 years, the total rental will exceed the purchase market price. In fact, this is equivalent to selling cell phones in disguise. It is very uneconomical for impulsive consumers.
Overall, used cell phones, digital recycling offline physical stores, less users consulting, but after the transaction, the profit is high. Moreover, the platform goes through a variety of ways to create revenue, which makes the platform look bad for business, but in fact they have their own way of making profits. This is one of the main reasons why the giants have laid out offline physical stores.
