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September 2019

What is the Best Country to Buy a Used or Refurbished Phone?

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The global market for used and refurbished phones is soaring.  In 2018, the value of refurbished phone sales worldwide leapt by an astonishing 10% in a single quarter.  As sales of new devices plateau, demand for used handsets only seems to be going up and up.

This is a genuinely global phenomenon.  According to the Counterpoint research that revealed the 10% quarterly leap in the refurb market, growth in sales of used mobile phones outstripped new device growth in three out of five regional markets – India, the US and Latin America. In the other two, Africa and South East Asia, the refurb market was still showing positive growth.

Out of these global comparisons, a question emerges – is there a best place in the world to buy a used and refurbished mobile phone?

Answering this question requires consideration of many factors.  We can’t just look at where sales trends are strongest and assume that must be the choice location to buy a second-hand mobile. We also have to take into consideration things like price, the typical condition of pre-owned handsets, the models available and so on.

Complex picture

When we do this, a complex picture emerges. It is no surprise that China sees more used phones traded than any other country – the world’s most populous country is also a voracious tech market, with 103 million new smartphones sold in the final quarter of 2018 alone. That’s a lot of second hand devices available, and probably partly explains why even that mammoth quarterly sales figure was down almost 10% year-on-year.  No doubt there are plenty of used phones to choose from in China, but volume alone does not necessarily make it the best place to buy one.

India, the second biggest nation on the planet, is seeing its pre-owned and refurbished mobile market grow faster than anywhere else in the world – up 41% year-on-year in Q2 of 2018.  Like many other developing countries, growth in the second-hand phone market opens up the possibility of owning a smartphone to sections of the population who just cannot afford new device prices.  As an indication of this, just 5% of the Indian population are prepared to pay $400 or more for a smartphone – less than half the RRP of the latest iPhone and Samsung Galaxy models.

However, placing such a high store on value brings its own challenges to any pre-owned phone market. The further price is driven down, the less emphasis there is likely to be on quality control and the more likely it is that the devices that are traded are older models popular for their budget prices.  It also means it is hard for a well-structured retail market to evolve as margins are so low, leaving it instead to small-time players and gray market operators.

Quality and value

In terms of quality, it is claimed that Japan holds all the aces when it comes to the grading of pre-owned mobiles – with claims that devices that rate in the mid-to-lower C or D brackets being equivalent to what you might find as A or B rated handsets in the US and Europe.  Although this is hard to verify independently, there is an interesting point that, culturally, the Japanese tend to be careful phone owners, which therefore raises the quality of the second hand stock.

Interestingly, Japanese consumers also seem to be value-conscious phone buyers – just 13% would apparently spend more than $400 on a smartphone.  The combination of value and quality would suggest Japan stands out as a decent contender for good places to buy a used phone.  On the downside, Japanese consumers tend to keep a phone longer before trading it in – 26 months compared to an average of 21 months globally – suggesting there might be less opportunity to grab a bargain on one of the very latest models.

Mature markets

On sheer discrepancy between growth of the refurb market versus new, the figures from the US suggest it is doing something very right – sales values of used devices were up around the 20% year-on-year growth mark in 2018, while new handset sales contracted by a similar margin.  That’s a huge discrepancy which suggests a significant swing in consumer preferences towards pre-owned.

Much of this can be put down to the emergence of a mature retail infrastructure behind used and refurbished phone sales.  Not only are the big brands, Apple and Samsung, now in on the act, but Amazon offers a ‘certified refurbished’ service and has signed a major deal with Apple this year.  And behind all of that is a well-organised, efficient and professional wholesale structure that is capable of sourcing, grading, refurbishing and distributing a wide range of mobile models in very high volumes.

This also is the situation we have in Europe, where trade in pre-owned mobiles has in recent years emerged from the specialist shops and niche e-commerce operators and into the retail mainstream.  Perhaps, ultimately, it’s counterproductive to talk about the ‘best’ country to buy a used or refurbished mobile, because the point is that the market should suit the needs of consumers in each individual location.  Given the success story it is writing, the used mobile sector is doing just that in most places around the world.

iPhone XS vs X: Is There a Difference When Buying Used?

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If Apple had been as consistent with how it has named its new iPhone models as it has been with its release dates, we’d all be looking forward to the iPhone 12 hitting the shelves at some point in autumn 2019

But while the Californian tech giant has rigorously stuck to its model-a-year release policy ever since the first iPhone was launched in 2007, it has enjoyed throwing a few curve balls when it comes to branding its handsets. And none more so than in 2017 when, as well as the iPhone 8, we also got the iPhone X. We all presumed the ‘X’ was the Roman numeral for ‘10’, a nod to the 10th anniversary of the original iPhone. But if that was the case, what ever happened to iPhone 9?

Fast forward another 12 months to September 2018, and instead of getting an iPhone XI, iPhone 11, or even a retrospective iPhone 9, we got the iPhone XS. And that is where we are now, with the 64GB version of the current model XS retailing for a cool £999 new.

The fact that the latest iPhone now sets customers back the best part of a grand should raise a few eyebrows. That’s double what the first iPhone cost back in 2007, 100% inflation over 12 years. Yes, the iPhone XS is considerably bigger, faster and more powerful than its original predecessor, with features no one had yet even dreamed of in 2007. But it still begs the question – are we getting value for money on new iPhone releases?

Used X-factor

Let’s take the iPhone X as a point of comparison. Released just 12 months before the XS, every iPhone X handset in existence is still less than two years old. Pre-owned, refurbished models are readily available to buy, presumably as a result of people trading them in for the XS (or deciding to abandon Apple for a competitor model).

A quick online search tells you that the average retail price for second-hand iPhone X 64GB is around £500. Dig around and you can find them for £400 or less. That’s a massive saving compared to a new iPhone XS, for a phone you know is less than two years old.

Of course, even a 60% saving does not represent great value if the used handset is in poor condition, or if the XS just happens to be a far superior model of smartphone. On the first point, you don’t need to take risks with the condition of second-hand phones these days. Used phone retail is a mature, professional market, retailers source devices based on quality from professional suppliers like Phoenix Cellular. And we base our reputation on rigorously testing, assessing, grading and refurbishing the used handsets we source. The grading of a pre-owned device will tell you exactly what kind of condition it is in. If it is sold as reconditioned, you should be receiving it in an as-new state.

On the question of whether the iPhone XS is a significantly better phone than the X, well there are those who will argue it is, and those who will argue it is not. What is certain is that both handsets are purposefully positioned to be part of the same brand family, both in name and near-identical appearance. There are ways in which the XS is a clear upgrade on its older relative. A year is a long time in chip technology, and the XS’s A12 Bionic chip is faster and more powerful than the A11 Bionic in the X. The XS also offers more storage, with minor improvements to battery life (30 minutes) and the camera (arguably only noticeable if you are seriously into your digital photography).

Ultimately, value lies in the eye of the person putting their hand into their pocket. If all of the above is enough for someone to pay more than double for a new XS compared to a used iPhone X, then that’s their prerogative.

Of course, you can also find XS handsets second-hand, although their numbers are not as great. At present, you are looking at around £650 for an iPhone XS 64GB. That £150 extra compared to the X may well seem like decent value for a smartphone that is 12 months younger and does offer some performance improvements.

Buying Used iPhone X and XS

Phoenix Cellular have a regular supply of used iPhone X and iPhone XS, as well as the Max.  These high demand models can be shipped anywhere in Europe overnight and are available in all grades and both the standard and marginal VAT scheme.


Three Tips for Buying Used iPhones Wholesale

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The used smartphone market has been booming in recent years. Now worth an estimated $20bn dollars worldwide, trade in used mobile phones has grown on the back of consumers looking for better value from their smartphone purchases and declining interest in keeping up with the ‘latest model’ new release cycle.

Another reason for the rapid growth of the pre-owned phone market is the way that wholesale supply has matured. In the past, the business of collecting, refurbishing and distributing used handsets traded in when a customer bought new was a piecemeal affair left mainly to small-time online operators.

Now, larger-scale professional outfits like Phoenix Cellular have taken used phone wholesale to the next level. Capable of sourcing thousands of devices at a time covering all the top models, our thorough reconditioning and grading service and Europe-wide distribution network means retailers can get the models their customers want, when they want, and be 100% confident about the quality of the handsets they receive.

We regularly get enquiries from retailers looking to stock second-hand smartphones first time. Many are keen to start with the biggest-name brands, such as Apple’s iPhone, and often ask us for advice on what to look out for when buying devices wholesale. So here are some of our top tips for buying used iPhones wholesale.

Find a reputable dealer

Our first tip might sound self-serving – of course we want would-be used phone retailers to source stock from us. But we really can’t stress enough the importance of doing your due diligence on who your are buying used iPhones from. Unfortunately, as with many high value consumer gadgets, there is a large black market for second-hand goods run by illegal operators. Through the internet, many of these are able to dress themselves up as legitimate businesses. The risk you take is orders never arriving, receiving poor quality devices, or even being sent stolen goods. There’s no reason to take such risks – just do some background checks about the companies you propose to deal with, make sure they are properly registered with Companies House, dig around for testimonials and client reviews, and make your choice based on reputation and proven credentials.

Check to see if you can take advantage of Marginal VAT

The VAT Margin Scheme is a special tax incentive for retailers of second-hand goods which offers a lower tax rate and calculates VAT on the margin you make on any item sold – not the full sale price, as is standard. That means you can make some significant tax savings through selling used iPhones. However, the scheme has strict rules, and eligibility all depends on whether VAT was paid by the wholesaler or not (it only applies when no VAT has been paid on the items previously). To take advantage of the scheme, you therefore have to source stock from wholesalers who also work within the rules of the scheme.

Source stock on quality, not availability

One issue we hear frequently from used iPhone retailers is a lack of availability of good quality used stock. They complain that they are left having to take whatever their supplier has available, and are often left disappointed by the physical and operational condition of the devices. This means they either have to sell on for a knock-down price, gaining little margin, or else customers are reluctant to buy the handsets at all.

We would always advise retailers to prioritise quality. Never simply accept stock just because that is what a supplier has available – if it isn’t what you want, or you are not happy with the quality, look elsewhere.

Buying used iPhones wholesale

One of the benefits of working with a larger wholesaler like Phoenix Cellular – we always have high availability of the top brands and models, and we are extremely thorough with our grading system.  We supply from Grade A Pristine to C and even D, on both the marginal and standard VAT scheme.  Find out more about our grading here. In addition, if you are a new customer of Phoenix Cellular, you benefit from our 100% Satisfaction Guarantee, meaning that if you aren’t completely satisfied with your order you can simply return for a full refund.  Ongoing customers still benefit from our industry leading RMA process which ensures that all RMA’s are processed and monies refunded within 5 working days.