What is the most accurate definition for REFURBISHED when we talk about consumer goods?
Lately, the end user is more inclined to opt for a refurbished product instead of a brand new one, just because the price is more attractive and they have the nice feeling of a bargain!
So, if we talk about laptops, about steam irons, or mobile phones, the market is full of sellers of these products both on b2c level and on b2b level. The acquisition by the end-user is justified if the price of a refurbished product is maximum 50% of the market price of the same item but in brand new condition. With this in mind, a refurbishment plant needs to calculate backwards its selling prices, in such a manner to allow the traders at least a minimum profit, whilst appreciating other costs involved, such as…
– Transport from the factory to the trader;
– A possible 5% returns rate (for re-worked – just like brand new – we still need to consider it).
The refurbishment process can be a short one: quick basic functional test, clean, re-pack; or alternatively a very complex one starting with the full functional test and ending with re-packing in its original box or even a new, brand labelled, one (with grading statement).
Grading is the magic word and the main topic of this article.
A grade, or A-ware, 2-nd choice (known under all of these variations) – is the highest refurbished grade.
Usually, these are as-new, complete with all accessories included and packed as original items- any change on the above – should reflect on the price of the item – which on a normal basis shouldn’t be higher than 35%RRP (retail recommended price) for small domestic appliances, 45% RRP for large domestic appliances and 60%RRP for mobile phones, tablet PCs, laptops, TVs.
Many products have never actually been delivered to a customer – or in some cases have not even left the factories or the shops. Others may have failed in the first few days of use.
B grade, or B-ware, 3-rd choice – is the inferior refurbishment level.
Usually the main difference from the above mentioned A Grade is of a cosmetic nature – more visible signs, such as cosmetic imperfections, less accessories included and the box can be usually either more deteriorated or a plain brown carton.
Usually the price for this category varies with 20% less than those A graded refurbished products.
But in both above mentioned cases, the goods should work 100% functionally. The graded or refurbished items can be sold sometimes with warranty.
Some companies, that want to maximise their profit, put on the market a 3rd category – a C grade of refurbish – which is in effect a highly used item. By the fact that it has already been heavily used, it presents a high risk of returning back a few months after purchase.
ARLL advise to you is to check with the seller before purchase – the real definition for the refurbished items – you plan to purchase.