The used smartphone market has been booming in recent years. Now worth an estimated $20bn dollars worldwide, trade in used mobile phones has grown on the back of consumers looking for better value from their smartphone purchases and declining interest in keeping up with the ‘latest model’ new release cycle.
Another reason for the rapid growth of the pre-owned phone market is the way that wholesale supply has matured. In the past, the business of collecting, refurbishing and distributing used handsets traded in when a customer bought new was a piecemeal affair left mainly to small-time online operators.
Now, larger-scale professional outfits like Phoenix Cellular have taken used phone wholesale to the next level. Capable of sourcing thousands of devices at a time covering all the top models, our thorough reconditioning and grading service and Europe-wide distribution network means retailers can get the models their customers want, when they want, and be 100% confident about the quality of the handsets they receive.
We regularly get enquiries from retailers looking to stock second-hand smartphones first time. Many are keen to start with the biggest-name brands, such as Apple’s iPhone, and often ask us for advice on what to look out for when buying devices wholesale. So here are some of our top tips for buying used iPhones wholesale.
Find a reputable dealer
Our first tip might sound self-serving – of course we want would-be used phone retailers to source stock from us. But we really can’t stress enough the importance of doing your due diligence on who your are buying used iPhones from. Unfortunately, as with many high value consumer gadgets, there is a large black market for second-hand goods run by illegal operators. Through the internet, many of these are able to dress themselves up as legitimate businesses. The risk you take is orders never arriving, receiving poor quality devices, or even being sent stolen goods. There’s no reason to take such risks – just do some background checks about the companies you propose to deal with, make sure they are properly registered with Companies House, dig around for testimonials and client reviews, and make your choice based on reputation and proven credentials.
Check to see if you can take advantage of Marginal VAT
The VAT Margin Scheme is a special tax incentive for retailers of second-hand goods which offers a lower tax rate and calculates VAT on the margin you make on any item sold – not the full sale price, as is standard. That means you can make some significant tax savings through selling used iPhones. However, the scheme has strict rules, and eligibility all depends on whether VAT was paid by the wholesaler or not (it only applies when no VAT has been paid on the items previously). To take advantage of the scheme, you therefore have to source stock from wholesalers who also work within the rules of the scheme.
Source stock on quality, not availability
One issue we hear frequently from used iPhone retailers is a lack of availability of good quality used stock. They complain that they are left having to take whatever their supplier has available, and are often left disappointed by the physical and operational condition of the devices. This means they either have to sell on for a knock-down price, gaining little margin, or else customers are reluctant to buy the handsets at all.
We would always advise retailers to prioritise quality. Never simply accept stock just because that is what a supplier has available – if it isn’t what you want, or you are not happy with the quality, look elsewhere.
Buying used iPhones wholesale
One of the benefits of working with a larger wholesaler like Phoenix Cellular – we always have high availability of the top brands and models, and we are extremely thorough with our grading system. We supply from Grade A Pristine to C and even D, on both the marginal and standard VAT scheme. Find out more about our grading here. In addition, if you are a new customer of Phoenix Cellular, you benefit from our 100% Satisfaction Guarantee, meaning that if you aren’t completely satisfied with your order you can simply return for a full refund. Ongoing customers still benefit from our industry leading RMA process which ensures that all RMA’s are processed and monies refunded within 5 working days.