In today’s ever-evolving IT landscape, companies are constantly upgrading their technology to remain competitive. However, with new technology comes the challenge of disposing of old equipment in a responsible and cost-effective way. Furthermore, they want to make the most of their revenue from IT hardware sales and recover the most value from their obsolete IT hardware.
This is where IT Asset Disposition (ITAD) providers come in, offering companies a range of services to manage their end-of-life IT equipment, including buying and reselling used equipment, data destruction, and responsible recycling.
While ITAD providers have become essential partners for companies looking to manage their end-of-use IT hardware, current market conditions have created significant challenges for IT asset managers and their IT financial teams. Many companies are struggling with lower revenue generated from the sale of their end-of-use IT hardware, which is impacting the entire IT industry. However, ITAD providers understand this struggle and are working hard to adapt their services to help companies navigate these difficult market conditions.
Market Conditions During and After COVID-19
To comprehend the challenges that end-of-use IT hardware sales present today, we must consider the impact of COVID-19 on IT hardware values.
In the early stages of the pandemic, there was a surge in demand for IT hardware such as laptops, webcams, and other mobile equipment as companies and individuals transitioned to remote work and online learning. This sudden increase in demand led to shortages of hardware and a corresponding increase in prices, at the same time that many countries implemented lockdowns and other restrictions that led to factory closures, transportation disruptions, and labor shortages.
A combination of these factors created significant difficulties for the IT hardware supply chain. As a result, the upgrading or replacement of infrastructure hardware was delayed. As companies tighten their budgets due to the economic downturn, they have become more hesitant to invest in new IT hardware, thus extending the use of technology past its recommended end-of-use date, resulting in a further reduction in sales revenue from ITAD providers.
As the pandemic continued, the supply of IT hardware caught up with significant demand, and prices for new equipment stabilized. At the same time, there was an increase in the supply of used IT hardware as businesses reduced offices or downsized and sold off their equipment, leading to a drop in the prices of used hardware.
Additionally, the shift to remote work resulted in a change in IT hardware requirements, with an increased demand for laptops, webcams, and other remote working tools, while the demand for desktops and other office-based IT hardware has reduced. This shift in demand created an unfavorable resale market for older office-based IT equipment and those providers that did not rethink their sales strategies.
Sipi Asset Recovery’s Senior Vice President & General Manager, Eric Dorn stated that sales of used hardware equipment had “significantly decreased by 30% to 40% at the time.”
In addition, the labor market crisis during the pandemic was imminent and is still current. Many workers who lost their jobs during the pandemic were hesitant to return to work due to safety concerns or a lack of suitable job opportunities. Today, however, the situation has improved, and more people are willing to work.
Logistics and Labor Situation
The labor situation has had a significant impact on companies’ ability to manage their end-of-use IT hardware due to reduced IT-focused employees that can handle services such as inventory, decommissioning, rack and de-rack, and preparation of the equipment for the ITAD process.
With many industries experiencing labor shortages and reduced resources to carry out these processes, companies are increasingly turning to ITAD providers to manage their end-of-use IT hardware starting from the logistical phase, ensuring proper disposal and data destruction. This trend has led to an increased demand for ITAD services, with many companies relying on these services to compensate for the reduced resources, which typically reflects in the fees charged for those services.
Although outsourcing these tasks to ITAD providers has become a necessary expense for many companies, revenue from hardware sales may be utilized to cover the fees.
Companies must be prepared for these challenges and work with trusted ITAD partners to ensure their equipment is disposed of safely and responsibly while minimizing costs.
Minimizing Costs, Maximizing Revenues
ITAD providers are adapting to these market conditions in an effort to assist businesses in cutting expenses and helping to manage costs from the sale of their end-of-use IT hardware. To make the most of the assets they want to sell, however, businesses must also be aware of their ITAD requirements and the significance of working with a certified ITAD provider.
Sipi’s Consultative Approach to ITAD
At Sipi Asset Recovery we understand the challenges that companies are facing in recovering value from their end-of-use IT hardware in the current market conditions. The reduced demand for office-based IT equipment, and higher costs in logistics and freights are making it harder for companies to achieve the revenue they want for their IT equipment.
With Sipi’s consultative approach, we can assist you in making the best decisions to achieve the most effective outcomes for your ITAD requirements.
Here are 4 ways your business can start reducing costs when selling your obsolete IT equipment:
- Being prepared for an asset pick-up will keep the process on schedule and help to eliminate any additional costs.
- Deciding to do some of the processes yourself will save on costs, but if resources are scares, utilizing an ITAD provider could be more economical.
- Consider the value of the assets, and treat lower-grade and out-of-date assets as bulk items instead of individually auditing them.
- Make quick but smart decisions regarding redeploying vs. asset resale value.
Sipi Asset Recovery recognizes the importance of providing cost-effective and reliable ITAD services to help companies overcome these challenges and manage their IT equipment in a secure and environmentally friendly way.
Get in touch with us for expert solutions on how to manage your end-of-use IT hardware sales.