The Circular Economy Digital Marketplace project was born out of the growing need for sustainable solutions. Closed-loop supply chains play a crucial role in achieving carbon neutrality and have been recognized as essential in the EU’s circular economy strategy.
In response to these challenges, the Circular Economy Digital Marketplace Project (CEDIM) pioneered a digital marketplace platform for IT devices based on the principles of the circular economy.
Introducing the Marketplace for Used IT Devices
The Circular Electronics marketplace platform underwent a successful pilot phase in collaboration with Fiare Solutions Oy from May to October 2022. This innovative platform was designed to streamline the transfer of functional and used IT devices between businesses, catering exclusively to companies and not private individuals or the general public. By focusing on business-to-business transactions, the platform aimed to establish trust and reliability within the industry.
The marketplace was meticulously designed to cater to different user types, ensuring a user-friendly experience. For companies selling IT devices, a simple notification of their redundant equipment was all it took to engage with the platform. The marketplace would then handle the transactions on their behalf by sharing device information with the maintenance companies operating on the platform.
The responsibilities of the maintenance companies extended beyond offers for used devices. They also included device pickup, secure data erasure, operating system reinstallation, and comprehensive servicing. This end-to-end approach provided convenience and peace of mind for companies looking to dispose of their used devices responsibly.
Once the transactions were completed and the necessary actions are taken, the maintenance companies had the opportunity to resell the serviced devices on the marketplace to purchasing companies, offering their own service concepts and warranties. The appeal of these recycled and serviced devices lies in their affordability, with prices set at just one-third of the original market value.
Navigating Challenges and Embracing Growth
Circular Electronics successfully transitioned from its pilot phase to become an integral part of Fiare Solutions Oy’s portfolio. However, it encountered certain challenges during implementation, primarily related to the matching problem. Despite significant interest, companies selling and buying IT devices faced difficulties finding their way to the platform. Conversely, multiple maintenance companies eagerly joined the platform, creating an imbalance between supply and demand.
For sellers and buyers, contractual issues posed a hurdle. Many companies had already committed to subcontracting agreements for new IT device procurement and recycling through third-party channels. Participating in a new pilot platform would have necessitated breaching or terminating these existing agreements, presenting a dilemma.
Additionally, the management of data associated with used devices posed challenges. The absence of a unified classification system for used devices hindered value determination. Different parties employed varying criteria to assess the device’s condition, further complicating the valuation process. Moreover, inadequate communication between companies’ information systems impeded seamless multi-channel sales.
The project shed light on the difficulties of marketing in a similar industry. Preliminary study interviews revealed that word-of-mouth and informal channels remained potent sales channels in the professional electronics sector. The introduction of the platform created a new competitive landscape for maintenance companies, which was met with mixed reactions.
Launching a novel platform in an established industry demands a significant marketing budget. However, due to the project’s short duration, justifying such an investment proved challenging. Nonetheless, the project generated invaluable insights into customer needs, platform benefits, and the primary challenges relating to legal considerations, contracts, communication, and marketing.
The circular electronics marketplace has set the stage for a more sustainable future in the used IT device industry. While it encountered obstacles during its early stages, the project has laid a solid foundation for further development, ensuring a better balance between supply and demand, streamlined processes, and enhanced communication within the industry.
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