You can learn a lot by taking a look inside the business that spent $3 billion on our used electronics last year.
LEWISVILLE, Texas — They go everywhere with us. And they hold our deepest secrets and our undivided attention for hours every day…until we trade them in for a newer cell phone, pack them up, and ship them out. But our old phones don’t go very far, at first.
If you trade in your old device for a new one with your wireless carrier, “there’s a good chance we’ll take it in, refurbish it and resell it,” he said. Assurant General Manager Jeremy Purvis.
Purvis recently gave us an inside tour of Assurant’s second-largest storage facility in the world, where thousands of electronic devices, especially mobile phones, arrive by truck every day.
The company is one of the world’s largest players in the booming business of recycling, refurbishing and reselling used mobile phones, tablets and smart watches.
Old phones are big business
Purvis says Assurant spent $3 billion last year to acquire those old devices, which helped prevent a lot of unnecessary waste from being dumped into the environment, “Last year [refurbished] the devices had about 23 metric tons that could have gone to landfills that were instead reused and resold.”
It is not a totally altruistic company. He acknowledges that there is also a lot of money to be made in this second-hand industry: “We have seen a 30% year-over-year growth in demand for Certified Pre-Owned devices. The overall market for used cell phones last year was about $13.3 billion. We have seen an increased reliance on certified pre-owned devices.”
The Lewisville warehouse, which employs 1,000 workers, with 300 more expected to be hired, operates three shifts, day and night. Says Purvis, “Our goal is to have everything from start to finish in less than 14 days.”
And here’s why: “Device values are down about 1% a week, so we have to act very fast.”
A Texas warehouse with 4 million cell phones. And yes, some bricks!
Last year, this facility alone processed about 4 million of the 20 million used devices Assurant received in 2021. A phone coming in through one end of the warehouse connects, turns on, wipes all data, checks, tests, polished, repaired and examined by humans and robots.
Those robots are really helpful, taking detailed digital images of each device and scanning it for scratches that human eyes might not see.
Humans have seen some other obvious problems. Purvis says that people who want to trade in a phone sometimes make mistakes or try outright scams: “If you send us an iPhone 12 when you told us it was an iPhone 13, we’ll probably tell you. We see people returning demo phones that are not real phones. We see people returning bricks because they are about the same weight as the phone in the box.”
Once the phones are verified as real phones and fully refurbished, artificial intelligence helps a mechanized sorting system grade the phones, sort them out, and prepare them to ship out the other end of the warehouse to specific stores across the country and, sometimes internationally.
This is the high season. And the reason for that season… is Apple
Apple devices account for a large part of the resale business. So when the company recently launched its iPhone 14 lineup, a flood of swapped-in phone cases started pouring in.
Apple stock traders are always interested in what Apple phone traders are doing, because it helps them to know how many phones the company is selling and therefore how well it is doing.
We don’t know Apple’s sales numbers, but thanks to Purvis, we do know this about trades: “We’re a month in and we’re setting new records. This is roughly the fifth year that exchanges have set new year-over-year volume records.”
It says that we usually keep our phones for 3.5 years. But interestingly, Purvis has noted that Apple’s newest phone seems to have a lot of “early adopters.” He says that because when the iPhone 14 was introduced, many people started trading models that aren’t that old, “The iPhone 12 is the highest volume trade we’re getting right now.”
Maybe people are also giving them up for deep discounts on the iPhone 13. Either way, Purvis says Apple-driven trade-in volume is back up again.