Press
Interview: trade2save, starving eBay of good product?
I wasn’t able to get a good read on Chris’s age, British accents throw my carnival guesstimator off, and thought it rude to ask; but he holds his dream of reducing waste tightly, much like I recall my desire to be a fighter pilot out of high school, settling for tech blogger later down the line.. His blog cites, as did he in my interview, many statistics of how we are polluting the planet with our electronic toxins all while lusting after whatever drops out of Cupertino. And it is in the shareholders interest to keep us wanting the latest and greatest. So who is looking out of us? For the planet?
In short, trade2save.com website/boutique of pre-owned electronics.
Gadgetell: Tell me about yourself
CW: My background is in advertising, having worked as a copywriter in the UK. During my career there, I was part of the move to encourage consumers to keep buying. Over last decade amount of products increased and manufactures are getting rich off it. They’ve (the manufacturers) created a throw away society that we live in today. The result of this increased production levels is we are creating a e-waste crisis. Electronics can be greener by 10-30% but isn’t. And the market is not providing the incentive to become more green, as we keep gobbling up the latest iPhone. We even queue up to do so..
CW: To fully appreciate Trade2save consider pre-owned cars. Years ago, you could only buy new cars. Today, when you consider purchasing a car, you carefully weight the option of buying used. There are whole segments of the population that have never owned a new car, they are content purchasing a slightly used one and consider it to have a higher value.
Auction sites have done well but, people get stung. No warranty, not confident in condition of product. Rather than being a portal, you are buying from trade2save. We’ll have products in 3 different conditions; at 3 different prices; all with a one year warranty…
Gadgetell: I get the sense, if your program is copied, cutting you out; you’ll still consider your efforts a success. Am I right?
CW: Absolutely. The driving idea behind trade2save is this: People need to become custodians of products not consumers. This is a major change in our thinking and one that needs to happen.
Gadgetell: Tell us about the guts of the system.
CW: It works like this, you fill out the questionnaire for the product you wish to sell to us. You’ll receive credits for the sale to use in the store. You’ll find a product you want and apply your credits. Customers get more for trading in (store credit) than if you sell for cash. You can sell a product to trade2save as easily as buying one - the buying prices are pre-loaded into the system so you just click sell in the product page instead of buy. This way, customers can buy and sell in the same transaction, and then pay (or pocket) the difference.The incentive is to trade goods for a new product. We are hear to insure what is being traded is legit.
Gadgetell: How sensitive will your pricing be? If Apple drops a new iPhone this summer, how quickly can I pick the “old model” up on the cheap?
CW: Our price system is designed to be very sensitive. It has to be. We’ll be paying top dollar and making a very thin margin on hot items like the iPhone. We have to, as we must have the goods in the store for our plan to work. No one will come if we don’t have the very latest, and that means paying very close to retail to get them in the store.
Gadgetell: When will the site be up?
I am really excited for Chris. I believe he is on to something here, something that still allows us to get our gadget fix but helps remove some of the guilt about doing so. And as I am sure you do, I have a just a few gadgets around here that I could do without. I’d even be willing to trade them for an iPhone, GPS or…whatever is on Gadgetell’s homepage tomorrow.
What’s Hot: Used Apple iPhones
After the iPhone 3G launch, consumers want the original, hackable iPhone, and vendors are springing up to sell them—for a premium
As the head of a company that sells used consumer electronics, David Chen follows sales of the iPhone with the precision of a mathematician. At the outset, the price of the first version of Apple’s (AAPL) music-playing wireless device behaved as expected: When the newer iPhone 3G hit store shelves, demand for the earlier iteration plummeted. Then the unexpected happened.
Within days of the iPhone 3G launch, demand for used, older iPhone models began rising, and prices began a steady climb. “We’ve been raising our prices over the past few weeks,” says Chen, who runs NextWorth.com, a Web site that buys and resells used iPhones and iPods. “It’s an anomaly, but there’s still a lot of demand for the first-generation [device].” As of Aug. 26, NextWorth Solutions was paying $200 and $300 respectively for gently-used, 8-Gigabyte and 16-GB original iPhone models. That’s up $50 from what his company paid a month earlier—and at the high end, on par with the price of a new 16-GB version of iPhone 3G—for the latest iteration of the iPhone, with more features and faster download speeds.
The used devices fetch an even higher price, of course, when they’re sold to a consumer. On e-commerce site eBay (EBAY), where NextWorth peddles many of its wares, a 16-GB version of the first-generation iPhone goes for about $600, and an 8-GB model in good condition commands $500. When it was new, the 16-GB phone sold for $499; the 8-GB model went for $399. Today, AT&T’s (T) most expensive iPhone 3G model sells for $300 with a two-year service contract. “The old iPhone [in mint condition] is very hard to find,” says Shawn Zade, who sells mobile phones through New York-based WirelessImports.com. “There’s a lot of demand.”
Bustling Competition
Why pay a premium for an older, less advanced model? Some users simply don’t want to be tied to a long-term contract with AT&T, the only authorized iPhone carrier in the U.S. The old phones can be unlocked fairly easily, making it possible for people to choose another carrier or to simply use the device with no charge at Wi-Fi hot spots. A method to reliably unlock the iPhone 3G still hasn’t been found, Zade says.
Owning the old model also helps users avoid the connectivity glitches (BusinessWeek.com, 8/14/08) that recently forced Apple to push a software update for its phone. Some folks just don’t do much comparison shopping, says Lidija Polutnik, a macroeconomics professor at Babson College, who also is an advisor to NextWorth. “When you go into the used gadget market, there’s a lot of impulse buying,” Polutnik says.
Whatever the reason, sales of the old iPhone are booming, and plenty of other companies besides NextWorth want in on the resale action. Many are striking trade-in agreements with retail stores like Circuit City (CC) to accept old iPhones on the spot. Some have powerful backers: One of NextWorth’s board members is Stephen Spinelli, Philadelphia University’s president and a co-founder of oil-service chain Jiffy Lube.
Even an Eco Pitch
Others are using complex problem-solving algorithms to make sure they can respond to swings in demand for the device and set prices accordingly. Flipswap uses a formula that adjusts prices in real time, based on sales data from the company’s worldwide network of stores and buyers. NextWorth relies on an algorithm developed by MBA students and Polutnik at Babson College. The algorithm uses data such as an iPhone’s storage capacity and extent of wear, as well as traffic to NextWorth’s site and partner stores, to spit out the going price for your model right on the site’s online calculator.
Some startups are relying on more than money to bring in sellers. Trade2save, due to launch in September, will not only pay for your old iPhone but also give you “carbon points” that can be used to buy other used products from the site, such as other phones. “When a customer trades in their iPhone, someone else will buy it instead of buying new,” Trade2save CEO Chris Whittome writes in an e-mail. “Hence they will be saving money, and saving on the environment because they reduce the demand on manufacturing another unit.”
The appeal of a used phone may be especially high outside the U.S. American consumers favor new gadgets, but overseas buyers are less averse to used phones. Flipswap, for instance, sends all of its iPhones to dealers in South America. “For a used phone, there’s not as much stigma in South America as in the U.S.,” says Flipswap CEO Sohrob Farudi. “They don’t worry about its being used.”
If enough consumers opt for used rather than new devices, Apple CEO “Steve Jobs [may have] a big problem,” Whittome of Trade2save adds. Well, yes and no. Apple refreshes its product lineup on a regular basis, giving consumers a growing list of alternatives to dated devices that in any case won’t remain gently used forever.
Farudi and his peers are enjoying the boom, however long it lasts. “When the iPhone 3G came out, we’ve continued to grow,” he says. “It’s been very good for our business.”
Demand Grows for Used Apple iPhones
By Olga Kharif
September 5, 2008 7:34AM
If enough consumers opt for used rather than new devices, Apple CEO “Steve Jobs [may have] a big problem,” Trade2save CEO Chris Whittome says. Well, yes and no. Apple refreshes its product lineup on a regular basis, giving consumers a growing list of alternatives to dated devices that in any case won’t remain gently used forever.
As the head of a company that sells used consumer electronics, David Chen follows sales of the iPhone with the precision of a mathematician. At the outset, the price of the first version of Apple’s music-playing wireless 
device behaved as expected: When the newer iPhone 3G hit store shelves, demand for the earlier iteration plummeted. Then the unexpected happened.
Within days of the iPhone 3G launch, demand for used, older iPhone models began rising, and prices began a steady climb. “We’ve been raising our prices over the past few weeks,” says Chen, who runs NextWorth.com, a Web site that buys and resells used iPhones and iPods. “It’s an anomaly, but there’s still a lot of demand for the first-generation [device].” As of Aug. 26, NextWorth Solutions was paying $200 and $300 respectively for gently-used, 8-Gigabyte and 16-GB original iPhone models. That’s up $50 from what his company paid a month earlier — and at the high end, on par with the price of a new 16-GB version of iPhone 3G — for the latest iteration of the iPhone, with more features and faster download speeds.
The used devices fetch an even higher price, of course, when they’re sold to a consumer. On e-commerce site eBay, where NextWorth peddles many of its wares, a 16-GB version of the first-generation iPhone goes for about $600, and an 8-GB model in good condition commands $500. When it was new, the 16-GB phone sold for $499; the 8-GB model went for $399. Today, AT&T ’s most expensive iPhone 3G model sells for $300 with a two-year service contract. “The old iPhone [in mint condition] is very hard to find,” says Shawn Zade, who sells mobile phones through New York-based WirelessImports.com. “There’s a lot of demand.”
Bustling Competition
Why pay a premium for an older, less advanced model? Some users simply don’t want to be tied to a long-term contract with AT&T, the only authorized iPhone carrier in the U.S. The old phones can be unlocked fairly easily, making it possible for people to choose another carrier or to simply use the device with no charge at Wi-Fi hot spots. A method to reliably unlock the iPhone 3G still hasn’t been found, Zade says.
Owning the old model also helps users avoid the connectivity glitches that recently forced Apple to push a software update for its phone. Some folks just don’t do much comparison shopping, says Lidija Polutnik, a macroeconomics professor at Babson College, who also is an advisor to NextWorth. “When you go into the used gadget market, there’s a lot of impulse buying,” Polutnik says.
Whatever the reason, sales of the old iPhone are booming, and plenty of other companies besides NextWorth want in on the resale action. Many are striking trade-in agreements with retail stores like Circuit City to accept old iPhones on the spot. Some have powerful backers: One of NextWorth’s board members is Stephen Spinelli, Philadelphia University’s president and a co-founder of oil-service chain Jiffy Lube.
Even an Eco Pitch
Others are using complex problem-solving algorithms to make sure they can respond to swings in demand for the device and set prices accordingly. Flipswap uses a formula that adjusts prices in real time, based on sales data from the company’s worldwide network of stores and buyers. NextWorth relies on an algorithm developed by MBA students and Polutnik at Babson College. The algorithm uses data such as an iPhone’s storage capacity and extent of wear, as well as traffic to NextWorth’s site and partner stores, to spit out the going price for your model right on the site’s online calculator.
Some startups are relying on more than money to bring in sellers. Trade2save, due to launch in September, will not only pay for your old iPhone but also give you “carbon points” that can be used to buy other used products from the site, such as other phones. “When a customer trades in their iPhone, someone else will buy it instead of buying new,” Trade2save CEO Chris Whittome writes in an e-mail. “Hence they will be saving money, and saving on the environment because they reduce the demand on manufacturing another unit.”
The appeal of a used phone may be especially high outside the U.S. American consumers favor new gadgets, but overseas buyers are less averse to used phones. Flipswap, for instance, sends all of its iPhones to dealers in South America. “For a used phone, there’s not as much stigma in South America as in the U.S.,” says Flipswap CEO Sohrob Farudi. “They don’t worry about its being used.”
If enough consumers opt for used rather than new devices, Apple CEO “Steve Jobs [may have] a big problem,” Whittome of Trade2save adds. Well, yes and no. Apple refreshes its product lineup on a regular basis, giving consumers a growing list of alternatives to dated devices that in any case won’t remain gently used forever.
Farudi and his peers are enjoying the boom, however long it lasts. “When the iPhone 3G came out, we’ve continued to grow,” he says. “It’s been very good for our business.”
