Resale Values on the Rise for Cascade Clients

Cascade and most other players in the secondary IT market are benefiting from a rebound in refurbished computer equipment prices since they bottomed out in the summer of 2022. Prices for used computers are up regardless of the channel market. For the most common items sold by Cascade (laptops, desktops, mobile devices, servers, and monitors), average wholesale prices are up 12.3% in the third quarter of 2024 compared to the third quarter of 2023. Average retail prices for these same types of products are up 16.8% during this period.  

Sale prices for the average laptop sold to wholesale buyers are up 6.8% in the 3rd quarter of 2024 compared to the same period one year ago. Laptops sold in the retail channel are up 10.2% compared to a year ago.   

Sales in the past 6 months are rising more quickly. Average wholesale prices are showing a 9.6% price increase and retail prices are up 10.8% from April to September of 2024 compared to the previous 6 months. On an annual basis, these prices are up almost 20% compared to the prior twelve-month period. 

The increase in prices paid for refurbished equipment is driven by an increased demand for computer purchases due to an improving economy and a reduction in shipping costs that depressed prices previously.   

Cascade started listing more refurbished computers in higher value retail markets over the past twelve months to address the strong demand from consumer buyers and small organizations for quality enterprise-grade equipment. This required us to invest in more repair and refurbishment capabilities to allow us to prepare products to meet the higher expectations of a retail buyer and end user.

Repairs on devices include replacing failed batteries, swapping drives, and fixing damaged screens. An additional set of tests and cleaning are also performed on retail devices to ensure the end user experiences a “new to them” device that exceeds the quality of consumer grade equipment purchased from other retailers.

As a Microsoft Authorized Refurbisher (MAR) third-party installer, Cascade installs Windows 11, Microsoft Office, and other applications to provide end-users a fully functional, out-of-box experience. Cascade also partners with Seccuranty to offer optional one-to-three-year warranties that cover failed batteries, damage to equipment, and even loss from theft. These upgrades and added assurances give buyers the comfort that these refurbished assets will meet their needs over many years.

To sell into retail markets, Cascade needed to demonstrate capabilities to prepare, package, deliver, and support products with additional care and attention to detail. Many wholesalers are willing to put up with lower-grade devices and high failure rates. Retail sales demand quality and support that has required Cascade to invest in more technology, staff training, tools, and parts for upgrades.

Cascade increased sales to retail markets more than five-fold from the third quarter of 2023 to Q3-2024. Almost ten times more laptops were sold into retail markets in the past quarter compared to one year ago. To support the growth in retail channel sales, Cascade doubled our Resale team and increased staffing and resources in Fulfillment.

We believe there is a vast opportunity to push even more value-added products into retail markets, given the increasing demand and options for refurbished equipment sales.

Cascade has sold products on eBay for more than 25 years and has more than 15,000 positive reviews. Leveraging this reputation, we greatly expanded our offerings on this sales platform. In the third quarter of 2024. Cascade’s eBay listings garnered more than 8.7 million impressions and just under 100,000 page views. That was an increase of 48.6% impressions over the prior quarter.

After winning approval to sell in the Amazon Renewed marketplace early in 2024, Cascade gained access to a new audience that valued the quality of expertly refurbished computers. Cascade was also recently approved to sell in the refurbished marketplace on Walmart’s site – the largest online retailed of refurbished computer equipment. Cascade continues to sell quality refurbished computer equipment on our Marketplace and has expanded the scope and quantity of items available to end users on this platform.

Another growing domestic market for refurbished computers is through Digital Equity channels. More than $1 billion in federal grants are funneling their way through state programs and into non-profits and capacity development efforts to purchase affordable computing devices to bridge the gap in access to technology. As a MAR third-party installer, Cascade can reduce our refurbishment costs and deliver a high-quality device to non-profits at a lower price point than through typical retail channels. Cascade’s enterprise clients are also donating portions of their rebates from the resale of their devices to further offset the costs of these products to the non-profits making them even more affordable and desirable.

The results of shifting more devices from wholesale markets to retail channels are dramatic. The average device sold into wholesale markets fetched a net Resale Value (after all direct costs are deducted) of $68.75 in the 3rd quarter of 2024. The average Resale Value of devices sold into retail markets was $154.66 in the same quarter!

Even accounting for the fact that retail sales include more high-end devices, the vast majority of devices sold into retail channels are upgraded versions of devices that would otherwise have been sent into wholesale markets. We are earning more per asset for our clients than ever before.

The ultimate measure of success for our enterprise clients is whether Cascade’s investments in more retail sales result in increased rebate returns paid to them for their retired IT assets. Cascade operates a revenue-sharing model whereby we split a negotiated percentage of the Resale Value of equipment with our customers (known as a “Rebate”). As a result, there is a mutual incentive to optimize the Resale Value of products, and the Rebate value shared between both parties.

We are pleased to report that the average Rebate paid for assets resold for our clients is up 41.3% in the 3rd quarter of 2024 compared to the 3rd quarter of 2023. The rate of growth in the past 6 months is even better, with Rebates growing at an annualized rate of 59.8%.

THIS INCREASE IS DUE TO TWO FACTORS:

1. Retail sale-based Rebates are growing faster than Rebates from wholesale devices. There was a 26.3% growth in retail-based Rebates vs. 8.8% growth in wholesale-based Rebates in the past quarter compared to the prior year.
2. The share of assets sold via retail channels grew to 17.4% of all devices in the past quarter, up from 2.2% one year ago. We are selling almost 8x more devices through retail channels.

Cascade expects to continue on this trajectory to expand retail sales even more in the future to reap increased returns to our clients and to deliver our high-quality refurbished products to even more end users.

This retail and Digital Equity focused strategy also promotes Circularity and a more environmentally responsible management of devices that extend their useful life and increase the chances we can later recover these devices for reuse or environmentally responsible recycling when they are retired once again.

Look for more information and resale and Rebate trends in the 2025 edition of Cascade’s Annual Benchmarking Report, due to be published in January.