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The Entrepreneur's Guide to Computer Recycling: Basics for starting up a computer recycling business in emerging markets
PC Recycling Guide
Supply Management

When seeking sources of used computer equipment, the enterprise must first look for the most accessible ones and must implement assessment methods to control the quality of supply. A manager must cultivate relationships with suppliers and also acquire a good knowledge of the market, to properly evaluate the value of supply.

Origins of inflows

When creating the enterprise, the entrepreneur should, as a priority, look for local sources of computer equipment and establish partnerships with local institutions (municipalities, local enterprises, etc.). Later, the enterprise may find sources on wider national or international markets. Collection requires prior arrangements with local authorities and the retail sector and needs to be incorporated into the overall waste management of the region.

Local supply

To get local supply, the entrepreneur may encourage the neighborhood inhabitants to leave their used equipment at the recycling centre. If the company has a sales area, it may offer to return used equipment from customers when they are buying newly refurbished equipment. Household waste is generally managed by local authorities. The entrepreneur should get in touch with them to see if he could get equipment through them, or if they can spread information about the recycling centre.

Local retailers

It may be interesting for the entrepreneur to form partnerships with computer equipment retailers to collect used equipment. Indeed, these stores can suggest that their clients should return their former equipment which could then be dispatched to the recycling centre to be processed. The entrepreneur will have to operate a profit-sharing scheme with these partners. It is also possible to offer a discount or a credit note to the clients returning used equipment. The partner store will have to have enough space to temporarily store the equipment received.

Recycling industry

Within the waste recycling industry, outsourcing is common practice. Major recycling companies outsource collecting and waste processing activities to small firms. Thus, a large volume processed by small recycling companies can come from larger recycling companies. Therefore the entrepreneur may try to get in touch with other recycling companies to find equipment fit for refurbishment.

Corporate clients: enterprises and administrations

When they replace their computers, some enterprises and administrations rely on small businesses to rid them of used equipment and take care of the recycling. The choice of this service provider is often made through competitive bidding. The entrepreneur will therefore have to prospect and make his company known if he wants to be chosen directly by these enterprises. The dispatching of equipment towards the recycling centre is often paid for by the recycling company, but in some cases transportation may be provided or paid for by the owner of the equipment.

Non Profit Organizations

Several international non-profit agencies (local authorities, international non-governmental organizations, etc.) from Europe and the United States focus on providing used computers and other ICT equipment to computer recycling centres. In some cases, the computers gathered are loaded and shipped overseas without being refurbished. These exports are illegal if they do not respect national and international regulations. The majority of computers donated to these agencies come from corporations who renewed their ICT infrastructure and got rid of old computers. The entrepreneur may try to form a partnership with these organizations to get access to new sources. However, he would have to pay particular attention to the quality of these supplies, which may turn out not to be profitable enough or hard to put back on the market if they are not chosen carefully.

Assessment of inflows

Before collecting equipment, the entrepreneur must estimate the operation’s profitability, the potential of equipment fit to be reclaimed and, above all, the cost of processing, which may vary greatly from one inflow to the other. Therefore, the entrepreneur must have several criteria and methods to distinguish between good and bad supplies and to know how much the refurbishment operation is going to cost.

Homogeneity of inflows

One of the most important criteria to consider before choosing a source of supply is the homogeneity of the equipment provided by that source. Indeed, in the long term, it is more profitable to process homogeneous batches of equipment than to maintain and repair computers of different configurations and brands.

A supply of homogeneous equipment offers several advantages. First, large volumes of identical computers reduce the time needed by a refurbishment technician to reconfigure each machine, i.e. download drivers and BIOS updates. Then, the possibility to exchange parts between computers extends the global potential of the supply, since technicians can extract working parts from unusable machines, and build one working computer out of two or three unusable ones. Moreover, clients may prefer a uniform set of equipment which can be used as a thin client in a network architecture. However, batches of identical equipment are likely to be overvalued.

Brand, chip speed and age

The entrepreneur can get an idea of the value of his supplies by assessing their potential longevity. With the brand name, the processor speed and the age of the equipment, he can make a good estimation of its condition and its potential to be reused. Indeed, each brand uses different components with different life spans, and some of these components are more appropriate for prolonged use than others. Therefore, it is not recommended to purchase unbranded computers, which have been assembled by computers retailers, because they are generally less reliable in the long term.

Another strong indicator of longevity is a computer chip’s clock speed: the greater the speed, the younger the chip, and, as a consequence, the greater the lifespan: the computer in which it is installed will last longer. This indicator, which often coincides with the age of the equipment, enables its potential for refurbishment and the probability to find spare parts to be estimated. In practice, before purchasing computers over five years old, the entrepreneur must think about their possible use (thin client, etc.), about the feasibility of their refurbishment and about the market on which they could be resold.

Administrative guaranties

Customs controls may be implemented (in EU countries, for example) to detect illegal waste exports. Therefore, flows of equipment coming from those countries are theoretically more reliable. The EU uses the following elements to distinguish computer equipment from waste: the invoice and contract relating to the sale or transfer of ownership of the computer, which states that the equipment is for direct reuse and fully functional; the evidence of testing in the form of a copy of the records (certificate of testing – proof of functional capability) on every item within the consignment and a protocol containing all record information; a declaration made by the holder who arranges the transport of the shipments that none of the material within the consignment is waste; and a sufficient packaging to protect it from damage during transportation, loading and unloading operations.