It's not even out yet, and already the iPad 2 is changing at least one industry: recommerce, or as it's more commonly known, buying things back.
Gazelle, a Boston based company, buys back old gadgets from consumers looking to sell an outdated device for money that will go to an upgrade. Kristina Kennedy, Gazelle's director of Brand and Communications, says the company works with large Web and big box retailers such as Wal-Mart, NewEgg.com, Office Depot and Costco, and powers their buy-back programs. It also has a direct-to-consumer business, which she says is its most profitable. Old devices that are bought back can be re-sold at a profit -- sometimes a large one.
They tend to appeal to the early adopters, people who must have the first versions of a product, and then must upgrade. To date, the company has received approximately 350,000 devices, with 252,000 going back to the retailers.
With the emergence of the iPad 2, Kennedy says the best is yet to come. Already less than four days in, she says the amount of people buying back their iPad has gotten off to a roaring start, better than any other product ever.
Last week I said the iPad might be even bigger than the iPhone in terms of buy-back. This week I get to say I told you so. Last June, when the iPhone 4 came out, we saw 1,200 iPhones bought back the first day. The other day, we had 2,000 iPads bought back the day the iPad 2 was unveiled, Kennedy said.
Already the number of people sending their original iPad to her has doubled to 4,000, Kennedy says. Te popularity of buyback programs for the original iPad can be attributed to the high prices consumers can get for them, which on Gazelle's site range from $300-$500. Also, she says, timing has been important.
Apple announced that it was going to be available quickly, 10 days from when it was announced, Kennedy said. That's good for recommerce, because we have a 30-day price lock, which means you have 30 days to send it from when you sell it online. That means people won't have to go anytime without a new iPad.
Beyond people buying back the iPad to get an iPad 2, Gazelle says the entire recommerce industry could see a boost. Kennedy says the early returns have shown a 45 percent halo effect, which is product buybacks that have been helped by the iPad. She said the number of people signing up for buyback programs for their iPhones has doubled in the past two days.
Already, the industry has gained steam with the emergence of programs from Best Buy and eBay. The money consumers see on Best Buy's buyback program is a bit different from Gazelle's, as it's based on when it was bought. Products bought six or fewer months ago get half their original value, six months to a year get 40 percent and so on. Regardless of the method, the money may start pouring in for buy backers thanks to the iPad.
This will be the biggest recommerce product ever, thus far it's had the highest percentage of a group of people utilizing a trade in for an upgrade, so that will definitely be the case, Kennedy said.
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