Pre-Owned Office Equipment, Supply Chain to Shine Post-Coronavirus?

Focusing on Potential Benefits in Time of Unrest

06/09/2020

 

 

Although regions across the United States have reopened, by no means has the pandemic crawled back to its cave. Until a vaccine is available, the world can’t return to pre-COVID-19 conditions—even with a cure, a “new normal” is already under construction. Still, it’s at times like this where I’m reminded of my favorite fortune-cookie saying: “There are many clouds, but they will all pass.”

 

Embracing change is about analyzing the positives (future) rather than dwelling on the negatives (past). This philosophy is how Raj Thadani, President of both Mars International (service provider to office imaging dealers and leasing companies) and Ross International (global reverse supply chain service provider for dealers and OEMs), has helped these companies achieve great success over the past two decades.

 

“From staging to installation to lease returns, we’ve carved out a very nice niche for ourselves in the device lifecycle,” Thadani said. “If a dealer doesn’t have the capacity for a big rollout, we can handle that overflow. Recently, our inventory of A4 hardware has increased while that for A3 has decreased. This has created a problem for the industry because there is a very limited secondary market for A4 devices. Roughly 70% of end-of-lease equipment heads overseas (higher meter counts), 15% stays domestic (lower meter counts), and 15% is recycled.”

 

Thadani remains bullish on the parts of the industry in which Mars and Ross are involved, tempering any possible question marks with his terrific energy. Here’s a small sampling of his thoughts…

 

1) A3 still selling: Activity around hardware setup has dropped dramatically (by 60% compared to typical levels) but, had he been asked about this in mid-March, Thadani would’ve said it’d be much slower.

 

2) Pre-owned market won’t dry up: Even if A3 sales decline (saving money and loss of print volume leading to fewer devices), plenty of machines in the field today will come off lease and have a second life.

 

3) Other opportunities: Print volume might not return to, say, 2019 numbers, so now’s the time to continue newer growth initiatives (third-party logistics and warehousing) or to grow others (medical gear).

 

“Buyers of used hardware will almost always buy used hardware,” Thadani said. “Credit approval ratings after the Great Recession went down, so how will credit work once the world is fully operational again? Credit has always looked at your history, but that might no longer be the case. It’ll be interesting to see how OEMs and dealers prime the pump during the recovery phase, probably with some attractive discount and/or rebate programs to keep those boxes moving from here to there.”

 

What will the industry landscape will look like after COVID-19 and beyond? Send us an email at info@keypointintelligence.com to share your opinion!