Carrier connection: Cell phone recycler uses online auctioning solution to reach distant, fractured markets

ReCellular Inc., a cell phone recycling and refurbishing services supplier, has doubled the number of phones it sells to secondary markets. And that's just in the past year. That's why the company is turning to a Web-site enabled auctioning solution delivered by FreeFlow to reach even more buyers situated around the globe.

By Jean Thilmany, contributing editor ( December 16, 2008

Thanks to an infusion of private investment dollars, ReCellular Inc . has, in the past year, doubled the number of cellular telephones it refurbishes and sells to secondary markets. In light of that sharp rise—to more than 500,000 handsets per month—the company needed a way to reach even more buyers situated around the globe.
That’s why the company is launching a Web-enabled auction service designed especially to reach global refurbishers that form the bulk of ReCellular’s customers, says John Boone, director of sales.
Dexter, Mich.-based ReCellular receives phones from phone companies—called carriers—from consumers that turn in their phones when upgrading to new devices. Other phones come to ReCellular from charitable solicitations and various other channels. The company tests and refurbishes a number of those phones, and then sells them back to carriers or their airtime resellers—called mobile virtual network operators. Those operators in turn resell them or offer them to customers linked to prepaid plans.
Other phones are sold to dealers abroad to be refurbished and sold in their home countries.
Before beginning the auction service, ReCellular posted its cell phone inventories to its Web site and encouraged customers to browse through the selection.
The company also hired sales staff, but the staff alone couldn’t tap into the huge marketplace for refurbished phones, says Boone.
“Before last year, we were only processing half the number of phones, so we certainly needed a solution to open up new channels,” Boone says. “We needed a way to raise our hand high in this fractured environment so people could see us and come to us, versus us spending sales expenses on bodies that roam the world.”
The company’s auction capability will allow it ramp up fast by reaching new customers and offering easy access to inventory. The round-the-clock auction site is particularly helpful to the company, which does 75 percent of its business with customers in 40 countries, Boone says.
“Our secondary markets are fragmented, and you often can’t tell who’s who or where they are located,” he says. “So auction technology is how you reach out.”
ReCellular partnered with FreeFlow Auction Services to gain the necessary capabilities for the Web site. FreeFlow helps manufacturers liquidate inventory through online auctions by supplying the auction platform, says Anne Patterson, VP of client delivery.

Selling items at online auction ensures that phones are sold at the best possible price.

FreeFlow also partnered with eBay —which administers eBay’s private marketplace—so ReCellular can now reach eBay power sellers via the partnership, Boone says. Power sellers, which must maintain monthly sales of at least $1,000 on eBay, ring up billions of dollars in sales on the traditional eBay site each year. A significant portion of that comes from selling products purchased from resellers, Patterson says.
Unlike eBay, however, the ReCellular-hosted auctions aren’t for the private buyer. Buyers must agree to ReCellular’s terms, for one thing, which can be significant, Patterson adds.
“For example, a carrier might say their used phone must be sold outside of Canada,” she says.
Otherwise the auction functions much as any similar site, including eBay itself. Buyers log on and browse through the phones and accessories that are offered.
“A buyer would log on to find out what’s in stock. And when you pulled up search results there’d be a column that says‘Bid now,’ ” Patterson explains. “When they start bidding, control shifts over—without the user knowing—to the FreeFlow platform.”
At auction’s end, a ReCellular administrator approves the sale. Next, the FreeFlow software automatically sends a sales notification to ReCellular’s sales-order system. From that point, ReCellular handles the order like any other, Patterson says.
Selling items at online auction also ensures the phones are sold at the best possible price, which is, of course, always important, Boone adds.
“This will help us broaden our market and maximize our profits,” he says.