The Secondary Market

Overview

Many companies buy used or refurbished equipment to cut costs. This market is a great place to buy telephones and equipment if you take a little time to do your homework and browse for the best deals. Why not buy refurbished equipment if it can run as good as new, comes with a warranty and saves you money?

Secondary equipment usually costs 30% to 70% less than new. Most vendors will tell you that the older the equipment, the greater the discount. Whatever is scarce costs more money. Phone color also affects value; unpopular colors are scarcer, so cost more.

You can shop for the system you want through the manufacturer or dealer, then call a secondary vendor to see if you can get it for less. Make sure you know your product. The telephone and KSU model numbers indicate analog vs. digital, plus non-visible features like speakerphone.

If you decide to buy from the secondary market rather than a dealer or OEM (Original Equipment Manufacturer), make sure you can install it yourself or that you have someone lined up to install it. Secondary market sources are usually (but not always, so ask) equipment-only.

Many remarketers lease or rent equipment. They also assist in acquiring financing through third-party leasing companies or from the original equipment manufacturer (OEM).

Refurbished equipment is known for its reliability. Some say it’s because it has already endured the burn-in that makes faulty circuits obvious. Refurbished products should be “near new” with all the OEM-provided accessories, up to date software and (at least) the standard warranty.

Make sure you get a user guide with each phone and programming manuals with the systems.

Many remarketers have increased their warranties from 90 days to up to two years. Find out if they provide advance replacement or if you must first return the defective goods. Find out who has to pay the shipping costs.

Remarketers focus heavily on the resale of parts. They should go out of their way to make sure they have in stock the parts you need. Some even track the average rate of failure for various components and stock their shelves according to the forecasted needs of their customers. Find out what the refurbisher’s normal inventory level is for equipment. If they don’t have well-stocked inventory, they may be less equipped to hook you up with the equipment you need when you need it.

Much of the market for secondary systems comes from companies that don’t want to keep their own telecom inventory. Some vendors put serial barcodes on each item, so its history is always known.

Make sure you understand what you are buying. There are many terms that refer to different states of previously-owned and they are used somewhat interchangeably.

The National Association of Telecommunications Dealers (NATD) defines refurbished equipment classes

As Is

Equipment that is bought or sold with no implied warranties. You should expect any condition from inoperative to good. This equipment may not be complete. Buy at your own risk.

Fair Condition Equipment

This equipment is usually in working condition but looks poor.

Good Condition Product

Equipment that is in working condition and looks good.

New

Generally defined as being sold by an authorized vendor of the Original Equipment Manufacturer (OEM) carrying the OEM’s standard warranty.

Like New Excellent condition

Under normal conditions could pass as new, (not used) but is not necessarily in the Original Equipment Manufacturer (OEM) packaging.

Refurbished

Refurbished equipment is cleaned, repaired, and/or painted (panels, covers, etc.) to restore the appearance of the product to a like new condition. It is completely tested, repaired and ready for installation.

Factory Refurbished Equipment

Factory refurbished equipment has been returned to the factory and the factory has replaced the plastic, repaired what’s broken, upgraded circuit boards, or has otherwise reconditioned the equipment to near-new.

Reconditioned

Reconditionedis not a NATD term but it is usually used as synonymous with refurbished.

Before you buy, get a credit report, call other dealers and industry peers. Call the NATD (National Association of Telecommunications Dealers, 561-266-9440) to see if the dealer is a member. If so, see if they are in good standing.

Place several small orders to test dealers before placing a large order.

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