July 2010

Redundant Network Hardware

Saving Money on Networking Infrastructure Tip 18: Sell Redundant Network Hardware on Consignment

By: David Mayberry, Go Communications Systems, Ltd

One of the near-universal facts of network management life is that every network generates a constant stream of retired network devices that must be disposed of. As with so many issues in life, this is both a challenge and an opportunity. It’s a challenge because it’s yet another task that needs to be addressed, consuming time and manpower. It’s an opportunity because it can be something of a money-spinner.

There’s no real rocket science here. Retired network devices can bring funds in by the rather simple expedient of selling them. You could have told me that. My kids could have told me that. So, what’s the big scoop? It’s this: there is a right way and a wrong way (several wrong ways, in fact) to go about selling retired network devices.

Selling your car
Let’s consider a parallel from the world of motoring. Imagine it’s time to replace your car, so you need to sell it on. The right approach to take will depend on whether you need to shift the car quickly, or get the best price for it. Generally, you can have one or the other, but not both.

If you want the best possible price for your car, you’ll wash and polish it, clean and tidy the interior, and have a professional agent sell it for you. Of course, if you need a quick sale, you’ll skip all that and stick it in a second-hand car rag at a cut price.

The same principle applies to disposing of retired network devices. If you have time to allow an experienced dealer to sell it for you, you can always secure a better price.

Niche complications
Things are further complicated if your retired network devices only appeal to a niche market. To go back to our motoring example, let’s assume your car isn’t just any old car, but a Porsche. A bright pink Porsche. If you try to sell it to your local dealer, you’re not going to get a good price for it. The dealer’s chances of reselling it will be severely reduced, because bright pink just isn’t to everyone’s taste. There are people who like pink cars: I know a couple myself (one a public figure and the other in the Go Communications Harlow offices) but they are a select bunch.

The laws of economics dictate that if you are looking to resell something that isn’t particularly popular, you should play it safe and slow. However, this doesn’t mean you need to resign yourself to months of tedious negotiations – months which would be much better spent on more fruitful matters, such as the day-to-day running of your network. There is, you may not be surprised to hear, a better way.

Selling retired network devices on consignment
If the reseller of the retired network device is not its owner, the pressure to sell it as quickly as possible – pressure which always tends to drive down the achievable price – is much reduced. The owner is likely to achieve a good selling price and the reseller a better profit on the deal. In the network world this approach, essentially using the reseller as a selling agent is known as selling “on consignment”.

Selling on consignment isn’t the approach to take when a speedy sale is required, but it does markedly improve the chances of a good sale price. The reseller acting as sales agent must allocate monies to the cost of storing the retired network device to be sold, but they can weigh that against their cut of the sale price and they have the direct sales advantage and reputation boost that comes as a result of being able to advertise the device as ‘in stock’.

Increased demand for retired network devices
This almost always results in additional enquiries for the retired network device, from sources which otherwise would not have known about it – consignment brings the reseller’s network of contacts into the game. And that increased demand will deliver the premium selling price that the customer is looking for.

So there you have it: this month’s money-saving tip. Sell your redundant network devices on consignment, especially if it’s a little out of the ordinary.

I wouldn’t recommend opting for bright pink routers when specifying kit, though. I think even the most effective reseller might struggle to shift them at a good price.