June 2012

Thriving in IT Asset Recovery

How to Survive and Thrive as an eWaste/IT Asset Recovery business

By: Eliot Axelrod, Makor Solutions

The worlds of IT Asset Disposition and eWaste recycling are continuing to merge and the pair is proving to be quite a heavyweight. There are tremendous economies of scale to a company that can do both. At once, individuals, corporations, and governments can be environmentally conscious, and at the same time recoup some of their investment through consignment or fixed value payments for their used equipment.

Not only will companies that do only eWaste Recycling or IT Asset Recovery lose out on additional revenue possibilities for each inbound order, they could even be in direct competition with companies that provide both services to get the order in the first place.

Why are so many eWaste recyclers moving into Asset Recovery?  In addition to the new resale revenue, they are finding upstream customers who used to be happy simply getting rid of their unwanted electronic equipment, who are now more attracted to the possibility of receiving money. We’ve heard of rebates as high as 70% of revenue. That’s a pretty enticing offer.  To compete, eWaste businesses need to expand their horizons.

Asset Recovery specialists are taking on recycling functions in order to reap the profits hidden within the Desktops, Laptops, and other IT Assets they were previously shipping out at a per lb. rate.

But there are complications to making this popular breed of organization work.  Combining two business processes, even those that seem to be related is not simple. Systems that are well adapted to recycling don’t cover IT Asset recovery, and vice versa.  Employing one off systems into an organization might provide the fix to that area of the business, but the breakdown in information flow could prove to be more of a problem then never having systems in place to begin with.  The key is to build or find a single platform to manage everything.

Let’s focus on the asset recovery end of the business for a moment.  If you’re using manual methods, even an experienced floor person can take a few minutes to audit, test and decide if an asset should be resold, or recycled.  Streamlining this process is crucial to keeping margins high.  Capturing the audit data is one thing, being able to use it to automate pricing, provide remarketing credits, build inventory and make business decisions is another.  To remain competitive, Asset Recovery business need their system to be capable of aiding the disposition decision and keeping all data flowing to each business unit, whether it’s the next processing step, downstream sales, finance or management.  Breakdowns in information flow could mean missed sales opportunities and/or lost margins.

This end of the business is about speed, precision and giving the most value to your upstream customer. The faster you list an asset or part onto PowerSource, the faster it’s going to get sold. In the best case, the moment an asset or part is tested and ready to be sold, it would appear on an available inventory list with your system tracking it for automated remarketing credits. For this to work, you need a single system which communicates everything from the upstream customer contract to receiving through to inventory management.  Customer service and margins are critical in this business and you have to do everything possible to deliver.

Let’s say you’ve got your IT Asset resale business covered. What about managing the commodity side of your business? Here you’re looking at different sort of accounting: Charging proper recycling fees; Managing inventory thresholds; Making sure that controlled commodities go where they should and not in a dumpster.  Just as eWaste focused companies find Asset Recovery data tasks challenging, Asset Recovery business find the management of commodities represent a different skill set.

To cap off the challenge at hand, now imagine tracking the commissions for all of this activity to make sure both your upstream and downstream sales forces remain motivated to continue driving new business.  Let’s face it, even the best systems in place won’t help if sales aren’t coming in.

We are finding that some established organizations in the eWaste/IT Asset Recovery world have built their own software to cover these processes.  This development and the on-going support comes at a cost though, sometimes into six or seven figures.  Custom software also requires updates for new O/S releases, testing, and upgrading to accommodate new business processes. One CEO, said that he realized he could get exactly what he wanted with custom software development, but never everything.

Most organizations though seem to be operating with a set of different tools that cover parts of the process. In many cases this amounts to clip boards, spreadsheets, and industry specific software. Unfortunately, this means that they are spending a lot of time moving information from one system to another and running into the problems and inefficiencies already described.

With this in mind, Makor Solutions has developed the Makor Recycling ManagerTM (MRM), an end to end solution to help track and manage both sides of the operation across the entire process. Built specifically for e-waste recyclers and Asset Recovery specialists, the MRM is a software platform built to incorporate best practices across every facet of these businesses.

Now, inbound sales and logistics can communicate efficiently with Receiving/Sort/Test/ Teardown, which together capture and provide finance what they need to confirm automated settlement on `complex, service driven orders with detailed remarketing credits and commission structures.

If you’d like to see how we can help you survive and thrive as an eWaste/IT Asset Recovery Business come take a look at our site www.recyclingmanager.com and call us at 952-922-2975 to see a personalized demo.

About the Author

Eliot Axelrod is the Director of Marketing and Sales for Makor Solutions. He’s held positions at some of the IT industry’s leading players like Apple and IBM/Lotus.