From Trash to Treasure: The Growing Opportunity of E-waste Refurbishment
Reselling and refurbishing electronic devices can reduce e-waste, benefit the environment, and maximize profits. Learn more about the growing opportunity of e-waste refurbishment.
As technology continues to evolve at a breakneck pace, so does the amount of electronic waste or e-waste produced. E-waste refers to discarded electronic devices such as smartphones, laptops, TVs, and appliances that are no longer in use. In recent years, the fashion industry's impact on the environment has become a hot topic for businesses and consumers alike. Comparatively, a third of consumers don't know what e-waste means, and the scale of the e-waste problem continues to increase despite consumers becoming increasingly eco-conscious.
According to a report by the Global E-waste Monitor, the UK produced the second-most e-waste in the world in 2022, and only 17% of e-waste is recycled globally. As electronics are expensive to manufacture and can generate significant profits, a move towards a circular economy with less waste provides an opportunity for businesses to benefit financially. Refurbishing and reselling electronic devices is a sustainable and certified option that businesses of any size can take advantage of.
By re-selling products at a slightly lower price, retailers and manufacturers can optimize revenue opportunities and gain some profit from all items. This strategy can introduce a new customer base, unlocking an additional revenue stream. By providing lower-cost items through refurbishment, customers who couldn't afford to purchase them at their initial prices now have access. This can increase a retailer's market share, by attracting cost-conscious customers, perhaps for the first time.
A common misconception persists that refurbished items are of lower quality. Many products are only returned due to minor technical faults or cosmetic damage, yet there is a hesitancy among retailers and manufacturers to resell refurbished items. Electronic items are repaired and thoroughly tested to ensure they meet the same quality as new ones before being sold as refurbished products. Some refurbished products may even be superior, as they undergo a more rigorous inspection to ensure their reliability.
Recent research has shown that consumer opinions about refurbished items are improving, despite the existing misconceptions. According to YouGov, over two-thirds of consumers worldwide have purchased a refurbished or recycled electronic item in the past. The UK and US lead the way, with four in ten consumers opting for repurposed electronics. The younger Generation Z demographic is even more open to the idea of refurbished technology, with this figure at 64%. As younger people become increasingly receptive to the concept of circularity, this trend is set to continue.
The more obvious upside to reselling refurbished electronics is its environmental benefits. Refurbishing tech products is a clear way to achieve circularity, as electronic devices contain materials such as plastics and metals that take hundreds of years to degrade if simply discarded in landfills. Reusing these materials through resale reduces the strain on natural resources caused by excessive manufacturing and can combat the complexity of electronic waste. Despite representing only 2% of solid waste streams, electronic waste represents 70% of hazardous waste in landfills.
The impact of returns of electronic products on the environment is staggering – 160,000 laptops are disposed of every day in the EU, and up to 18 million metric tonnes of carbon dioxide emissions are released into the atmosphere each year from the disposal of electronic devices. Instead, by refurbishing these items, the emissions produced can be reduced by up to 50%, easing the strain on the environment caused by their disposal.
Sustainability has become a major concern for the retail industry, with consumers demanding more environmentally friendly options and products. Committing to circular processes can lead to increased customer satisfaction, which in turn can lead to growing sales. Companies must operate sustainably to maintain shareholder value and comply with regulations. To attract additional investment, businesses must be transparent about their environmental, social, and governance (ESG) initiatives.
Collaborating with supply chain partners and customers can enhance a business's ability to capture and reuse greater quantities of new materials from end-of-life electronics. Professional return management companies can also help businesses take full advantage of the benefits of refurbishing and recycling tech products. These companies offer expertise, support, and guidance to make the process as seamless as possible. They can effectively refurbish electronic items and resell them on external marketplaces or the retailer's own, providing complete control and bespoke service.
Improving stakeholder satisfaction is another benefit of reselling refurbished electronics. When deciding where to spend their money, consumers are increasingly looking for companies that prioritize environmental responsibility. 31% of consumers currently rank sustainability as the most important factor when purchasing electronic products, with design, brand name, and having the latest model trailing behind. For investors, companies must operate sustainably to maintain shareholder value and comply with regulations. A higher ESG score can lead to a 1.2x increase in EV/ABITDA, making it a worthwhile endeavor for companies to prioritize sustainability.
Reselling and refurbishing consumer electronics is a great way for businesses to make a positive impact on the environment while also maximizing profits. This approach not only reduces their environmental footprint but can also generate additional revenue and increase stakeholder satisfaction. As consumers become increasingly environmentally conscious, it is important for businesses to prioritize sustainability and circularity to remain competitive and profitable in the long term. By working with supply chain partners and return management companies, businesses can effectively navigate the challenges of e-waste and reap the benefits of a circular economy.