Case Study - Flexible Pricing Structure

How do you determine the fair market value of a used IT asset? How do we at GoCWI maximize the benefit to our customers?

Many factors go into this determination including age, condition, and configuration of equipment , as well as supply and demand on the market at the time of sale. We also ask the following questions before getting started on a project. What are the needs of our customer? Do they know the market? How quickly would they like to close on the transaction? Do they have a high residual value tied up in their assets?

Selling Used IT Assets to CWIIn an effort to try to accommodate all these variables, we have taken the approach of offering flexible pricing structures. For sellers that are comfortable with the market, familiar with the value of used IT assets, and in need of a speedy transaction, GoCWI uses a direct purchase model. In these cases, we test, audit, and grade the equipment. We can then provide the seller with a detailed spreadsheet and our “buy price” recommendations. Upon approval from the seller, we pay the proceeds and transfer title of the equipment. It is a simple and straight forward transaction, best suited to customers with standard equipment in need of a quick turn-around.

For sellers that have a longer time table, would like to maximize the value of their IT assets, and may not be as familiar with the market landscape, there is the consignment approach. In this instance, GoCWI offers a consignment split arrangement rather than a fixed purchase price. Typically a consignment split is 70/30 and is negotiable in either direction; with 70 percent going to the seller. In selecting a consignment model, the seller lets the market determine the purchase price and they have the potential to increase their return by allowing a higher dollar sale to occur - perhaps through a retail channel.

Used IT Assets - Hard DrivesOccasionally, a combination of direct purchase and consignment is used. Recently, a leading independent energy company had data collection scanners that they needed to retire as they transitioned to new technology. Because this company had very specific requirements, the original units were configured in a custom fashion with options that not all users need or want. This increased their cost per unit and also made the potential resale more difficult. A direct purchase quote that factored in the difficult resale of these custom units did not offer the seller adequate return. GoCWI proposed a direct purchase/consignment combination. We guaranteed a base price offer and split any additional proceeds above our expected sell price at a 70/30 revenue share. We leveraged our extensive distribution network to identify a buyer willing to purchase the units at above base price. As a result our customer was able to maximize the return on their IT assets, while still be assured of minimum fixed return. At GoCWI, our goal is always to offer a variety of purchase models in the effort to provide the best structure for each of our clients’ needs.