Startup pays consumers for old iPhones

June 8, 2010

Apple CEO Steve Jobs discusses the new iPhone 4 during the Apple Worldwide Developers Conference in San Francisco, California June 7, 2010. REUTERS/Robert GalraithRather than throwing out their old iPhone or recycling it, people wanting to upgrade to Apple’s latest iPhone 4 have another option in Gazelle.

“It’s almost early Christmas at Gazelle with the introduction of a new generation of iPhone,” said Israel Ganot, CEO and founder of the Brookline, Massachusetts-based company.

Gazelle, launched in 2008, buys electronics ranging from camcorders to LCD monitors. Ganot started the company after he tried to recycle some old cell phones, but was told by a store he would have to pay for doing so. He got the idea for Gazelle (its motto is “don’t just sell it, Gazelle it”) after realizing his phones still have value in them.

The company bills itself as an easy, fast and environmentally responsible way for people to sell or recycle their phones. Sellers search for their model on the website, answer four questions about the item’s condition and then get a price for it. Gazelle provides the packaging and free shipping for the item.

iPhones are a popular item to sell these days. Gazelle saw a surge in “trades” of the phones on the same day Apple CEO Steve Jobs unveiled the newest model.

“A year ago when Apple introduced the 3GS we saw about 141 trades on the day of the announcement,” said Ganot. “Yesterday, we got over 1,000.”

Gazelle expects the number of iPhone sellers to surpass 10,000 as people focus on upgrading their phones. The company chose the same day as Apple’s announcement to launch a website that lets consumers “trade” their iPhone right from their phone.

Gazelle uses a “dynamic calculator” to determine the price for an iPhone based on its condition and the current market price in the re-sale market. Ganot said consumers can expect to be paid an amount equivalent to what it would cost to upgrade their phone. Consumers on average are getting $201, with some receiving as much as $304.

“It removes the guilt of paying for an upgrade because it’s free.”

So far about 100,000 people have used Gazelle with approximately 200,000 items being sold to the company. Gazelle re-sells the electronics through their Ebay store or to international sellers. Ganot didn’t say how much of Gazelle’s business comes from iPhones, but said the company can’t keep up with the demand.

“There’s insatiable demand for the used products,” said Ganot. “The biggest challenge is generating awareness for trading and changing consumer behavior so when you upgrade to the latest, you think about trading in the old one.”

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Seems like something that combines environmental sensibility and profitability. Considering that bigger schemes to make the planet greener like The Copenhagen Meet have failed miserably such start-ups could be the solution.

Posted by ak1980 | Report as abusive