Author(s): Raghu Gopal
This week, eBay launched a new marketplace for second-hand smartphones. Called Instant Selling, the programme enables US customers to sell their smartphones and get paid instantly with an eBay voucher, without having to manage the selling process.
Under the new programme, customers receive immediate eBay credit once the device is listed. Sellers enter details about the device such as the model, colour, storage capacity, condition and the wireless carrier it was acquired through. Once the details are filled in, and eligibility is verified, eBay provides a price. If seller is satisfied with the amount, they add images of the phone and simply click "List it". An eBay voucher is automatically added to their account and a shipping label is generated to help with the shipping process.
According to eBay, US sellers using its Instant Selling programme realize more value from their phone than with other second-hand marketplaces such as Gazelle. The company also says consumers can get more by selling their phones through Instant Selling than if they had traded them in with a carrier such as AT&T, T-Mobile or Verizon or through Apple's Give Back programme. Our quick check of the programme partially validates this claim. However, in some cases, such as a current iPhone promotion at T-Mobile, carrier trade-in offers could provide consumers with a greater residual value, though they do require buying and financing a new device.
eBay believes that there's an opportunity to create a market with Instant Selling for smartphones. The company pointed to a recent study it commissioned, which found that 61 percent of Americans have never sold or traded-in a smartphone, and about 40 percent have two or more unneeded smartphones in their homes.
As the programme is still new, Instant Selling eligibility includes only unlocked smartphones on Verizon and AT&T, the Samsung Galaxy S7 to S9+, and the iPhone 6s 16GB to iPhone X 256GB. In November eBay plans to add Sprint, T-Mobile, Google Pixel and some LG devices to the scheme.
Despite the presence of an established market for second-hand smartphones in the US, eBay believes it can take part of that business and expand the volumes by easing and enticing those who are hesitant to part with a device as personal as a phone. There is potential disruption here for carriers that rely on trade-ins as part of promotions, providing new and existing subscribers with a monetary credit and reducing the overall cost of a new smartphone. Carriers can also make higher margins selling second-hand devices than new smartphones.
With more than 100 million visitors a month, eBay is a major e-commerce channel in US and has a significant presence in many other countries around the world. The marketplace for second-hand phones is getting competitive, creating a robust environment for the re-use of devices.
eBay's move comes as CCS Insight's own research reveals pent-up demand for second-hand and refurbished phones and growing use of trade-in and early upgrade schemes in Europe. In the UK, for example, about 10 percent of people told us that their primary phone is a second-hand one. Around one mobile phone user in every five in the UK has traded-in a used mobile phone with a retailer, and a further one in three would consider doing so with their current mobile phone.
For more information about our research into customers' changing journey to buy mobile phones and subscriptions, or to receive a free white paper exploring some of the leading findings of our survey, please contact firstname.lastname@example.org.