How to Buy Used Tech Gear Cheap
Every penny counts for Stephanie Brock, the director of finance at HiveLive, a 30-person Web software company with $500,000 in sales in Boulder, Colo. So in October, when she needed headsets for the company's sales reps, she didn't think twice about buying them secondhand. She set out for Network Systems Resellers in nearby Littleton, where she ordered 10 for $80 each. That's about half of what new ones cost. A few months earlier, she bought a used router for $350, saving at least $100. "We always look for refurbished, used equipment because we're a startup company and we need to save money where we can," Brock says.
For those looking to buy tech gear, the lousy economy has an upside: There are deals to be had as more high-quality used equipment comes on the market. If you know where to look, it's easy to find discounts of 50% or more on hardware that may be only a couple years old with plenty of life left. "Lots of companies are shutting down operations, so lots of fairly new products are ending up on the secondary market," says Rob Enderle, president of the tech consulting firm Enderle Group in San Jose. Some gear is even more pristine, having been rescued from customer returns or orders that were canceled before being delivered. IBM, Dell, (DELL) and Hewlett-Packard (HPQ) all refurbish such laptops, desktop PCs, and other equipment, then test and guarantee them.
But shopping for used tech gear is a little like buying a used car: A few precautions go a long way toward avoiding a lemon. The biggest caveat is that it's sometimes necessary to do minor repairs. Chris Shipley, principal owner of Nutmeg Consulting in Hartford, found a secondhand IBM ThinkPad laptop for $400, but needed to spend an extra $34 to replace the wireless card. Now the laptop, already several years old when he bought it in November 2007, works just fine for his 10-person, $400,000 firm. Overall, Shipley says he's been happy with the used PCs his company has bought. He says his business, like many, just doesn't need the full power of the brand-new hardware that is for sale today. "It keeps overhead low so that we can afford to continue doing business," he says. Here's how you can find equipment that will meet your needs and stretch your budget a little further.
IS USED FOR YOU?
Almost any tech device can be purchased secondhand, including desktop and laptop computers, servers, and telephone systems. But some of the best deals can be found on higher-end equipment such as switches and routers. Buying those items secondhand can save thousands of dollars. Alex Carroll, co-owner of Indianapolis-based Lifeline Data Centers, a 12-person outsourced data center with $3.5 million in sales, figures he saves as much as 60%—or more than $100,000—buying used equipment from Network Hardware Resale in Santa Barbara, Calif., and This Old Store in Sarasota, Fla. It "allows us to buy equipment without going to the bank for financing," says Carroll.
That being said, some gear might still best be bought new. The prices of PCs have dropped so much in recent years that you might be able to get a new low-end device for slightly more than a used one. Also, if you plan to do image or video editing, a new computer with faster processors might be worth the money. And some experts advise caution when buying refurbished laptops, as they can easily get beat up as they're carried around. It's also remotely possible that you could get a computer with someone else's data if the hard drive wasn't properly wiped.
WHERE TO BUY
It's important to buy used equipment from reputable firms with a physical address to avoid fly-by-night operations. "These are not products you want to buy off of eBay," says Enderle. You may want to start with a small order and make sure the return policy is clear before placing a larger order. "If you're going to place a sizable order, you can ask the company to send a sample unit," says Jake Player, president of TechTurn, an Austin (Tex.) refurbisher and reseller. If you prefer to walk into a store, Micro Center sells refurbished equipment alongside new gear at 21 locations across the country. Micro Center and others also sell refurbished hardware online.
TEST IT OUT
Whichever supplier you choose, pay close attention to warranties. "Typically you get a 30-day warranty to guard against products that are dead on arrival," says Enderle. Boston Neurofeedback Center, a $1 million therapy practice, has purchased many secondhand computers for its seven employees over the past decade. About 18 months ago, Chief Research Scientist Dave Myer bought five refurbished desktop PCs from Dell for about $425 each, saving about $900. Unfortunately, he didn't get around to checking the computers until after the 100-day warranties expired.
Two PCs had problems with memory chips. Myer, who has bought mostly used computers in his 10 years in business, was able to get them fixed inexpensively at his local PC repair company. But next time around, he's planning to fire up the equipment as soon as he gets it.
Return to the BW SmallBiz Feb/March 2009 Table of Contents