This story was originally published on Aug. 24, 2011, and is brought to you today as part of our Best of ECT News series.
In the fast-moving world of consumer electronics, last year’s gaming system and smartphone are old news. Luckily, however, they’re not entirely worthless.
Electronics recommerce company Gazelle buys this equipment, offering consumers cash, as well as free packaging and shipping — and then resells it for a profit.
In Part 2 of his exclusive interview with the E-Commerce Times, Gazelle cofounder and CEO Israel Ganot talks about the company’s electronic recycling philosophy, business model and future.
E-Commerce Times: What exactly does “recommerce” mean?
Recommerce is a new consumer model that rewards consumers for smart consumption.
ECT: Where did the name “Gazelle” come from?
We wanted something short and memorable. It’s the second fastest animal, and it has a connection to the environment. We also like the slogan, “Don’t just sell it, Gazelle it.” The tagline we’re using now is “Keep it moving.” Don’t let things get stale, give those devices a new life. It’s all about keeping things moving.
ECT: How does Gazelle work?
Most consumers engage with Gazelle when they upgrade to a new device. You’ll go to Gazelle, search for your specific model, answer questions about its physical condition, and we’ll make you an offer. If you accept the offer, we’ll send you packaging, we’ll pay for the shipping, and once we get the item in our facility, within a week the item will be received inspected, data wiped, and you’ll get paid with a check or through PayPal or an Amazon gift card — or you can donate the proceeds to a charity.
Another way you can engage is to go to a site like Walmart.com and go to their electronics trade-in and recycling, powered by Gazelle, and do it that way. If you go to Gazelle through the Walmart website, you’ll get a Walmart gift card.
ECT: What is Gazelle’s business model? How does it make money?
Once we collect these devices, we pay consumers, and that’s our inventory. The only difference between us is that a typical retailer buys from wholesalers, but we put together our inventory from consumers, and then we resell the product in the secondary market.
We sell in a lot of different places. Our biggest channels are eBay, Amazon, wholesale channels and international buyers. Demand for the product is insatiable. People that live on the coasts want the latest and the greatest products. We buy on the coasts, and then we sell to the middle of the country and to developing markets.
Our biggest challenge as a business is buying more inventory, and to buy more inventory it’s all about educating consumers about recommerce.
ECT: What’s the benefit of using Gazelle as opposed to other similar services?
We are seeing a lot of competition in terms of other companies providing trade-in services, mostly coming from retailers and e-commerce retailers. It’s extremely positive, since the biggest challenge in our business is awareness.
Ultimately, it will help change consumer behavior. What’s different about Gazelle is our customer experience, which is the best in the industry. It’s all about delivering the customer experience every single day to every customer: how we handle the communication, free shipping, free packaging, and the way we communicate with our users. We see our users coming back to us over and over again.
ECT: What role has social media played in promoting and growing Gazelle?
The primary way we use social media is for customer care, mostly using Twitter and Facebook. We also give our users the tools they need to evangelize, and we’ve seen a lot of tweets about Gazelle. We’ve also seen the growth of YouTube videos. Gadget Lab, etc., providing videos for fixing devices, etc.
ECT: Are there any safety or privacy concerns with selling electronics on Gazelle?
That’s one of the most important services we provide — wiping electronics that customers trade. When consumers send their items to Gazelle, they know their data is safe. Consumers rely on that. It’s part of our brand and our trust. It’s about doing it every single day. We know that every data breach would affect our brand.
ECT: How is Gazelle evolving? What’s in the future for the company?
There are two areas in which we’re going to invest. In terms of sheer growth, we’re starting to invest in mass media channels, with radio and TV ads, and really getting the message out is a major area of opportunity.
Number two is working with our retail partners in bringing the service into the retail environment, and we’ll be rolling out more retail partners over the next year. We’re also building the infrastructure of the company — something that needs to scale with the growth of the business. We’re also thinking about international expansion and other categories we can move into.