Asset recovery is a core function of the IT asset disposition (ITAD) process. Without it, ITAD would be a major cost center for most companies. But for organizations on a regular refresh cycle a good ITAD program can actually be a revenue generating activity. This article is going to shed some light on how Avail Recovery goes about this process on behalf of our customers.
Any seasoned IT professional likely already has some experience with collecting data on decommissioned IT equipment and then bidding it out to potential buyers or handing it off to an ITAD partner. But what happens behind the scenes that allows these companies to confidently offer money on these devices? You may be tempted to compare it to used car dealerships that use blue book values to buy and sell automobiles, but ITAD companies are dealing with many more model numbers and variances so it is actually much more complicated than that, and therefore makes it less uniform across the industry. For instance, here is an overview of our product database to date without factoring in the additional variance that can exist within model numbers:
|Record Type||Quantity of Records|
When we receive a list we follow these steps:
- Normalize the data and break up into product categories (computers, servers, storage, networking, telecom, etc.)
- Determine if the systems have more value if broken out into components or as full systems
- See if we have direct sales history within the last 60 days
- If not, then conduct market research through online channels like eBay or reach out to specialized reseller partners to understand what their buyback rates are for that particular product (called a backing bid)
- Assign expected resale values and use our internal formula to determine a “fair market value” or buyback rate that we can guarantee for the next 2 – 4 weeks
Many of our customers have signed an ongoing ITAD partnership agreement which allows us to skip the above process and get right to picking up their equipment and reporting back to them with the rates afterwards. This is ultimately more efficient for both parties but does carry the potential risk of some shipments having a cost associated if the value recovery amount does not exceed the logistics costs. But it also allows you to avoid building a detailed list, getting quotes and working with different vendors each time. Plus with our rolling balance program you can eat the cost of a negative value shipment with the balance from a positive value shipment.
Once an agreement is reached, this is the general process the equipment goes through from pickup to going back out our doors to a new owner:
- Equipment picked up at client site and Lot Number assigned
- Equipment received at Avail Recovery facility
- Pallet numbers assigned and pallets put into a processing queue (usually about a 30 day backlog)
- Pallets are pulled by our Sort Team. The Sort Team captures the make, model, serial number and asset tag of every device. Our database directs them as they capture this information if the device should be resold or recycled.
- Hard drives that are to be recycled are degaussed before being physically broken down. Systems and hard drives that are to be resold are wiped clean using industry leading software-based erasure.
- Systems to be resold are put through an R2-approved testing process that checks physical condition as well as functionality of the internal component
- Equipment is then routed to be sold either through a wholesale process to product-specific resellers or via online channels
- The account manager gets an alert that the lot has been processed and settles up with the client, and payment is made
Hope that helps! Please reach out to us if you have any questions or would like a proposal for equipment you have available.