Is the Secondhand Market the Answer to Apple’s Problems?

Apple (NASDAQ:AAPL) is a brand that is often associated with words like “quality,” “premier,” and “expensive.” However, according to Mike Elgan at Cult of Mac, the solution to several of Apple’s problems may lie within the discount used goods market.

Although Apple already sells its used products through the refurbished section of its Apple Store, it appears that the Cupertino-based company is also hawking its used goods through a “Refurbished Outlet” store on eBay. Interestingly enough, the prices offered on eBay are substantially lower than the prices offered through the Apple Store. This demonstrates that Apple is aware of an untapped market for secondhand hardware but for some reason it is not comfortable selling heavily discounted goods through its own Apple Store.

Elgan argues that rather than concealing its involvement in the used market, Apple should embrace it. Not only would this push Apple to improve on its already superbly designed and durable hardware, it would also increase Apple’s profit margin on every device it makes.

Mike Elgan states, “From a business perspective, this could be a huge boost to Apple’s bottom line. Apple should be able to make a few hundred dollars on the brand-new iPhone, a couple hundred on the first re-sale, a hundred on the third sale, and maybe $50 on the fourth sale. I’m making these numbers up, obviously, but you can see how profitable this could be — making $1,000 on the total life of a single iPhone, but having to pay for its manufacture only once.”

Besides potentially making every Apple device more profitable, the used market would also absorb more “recycled” devices that often end up being unsafely dismantled in countries like India or China. This would reduce the overall harm to people and the environment.