With a booming mobile phone market that changes almost minute to minute, mobile phone resales are a hot commodity.
In developed countries, there’s a rush on upgrades that creates both a problem and a solution.
The problem is that millions of consumers are ready to dump almost-new phones for the next big thing.
This has a potentially negative environmental impact.
Enter the solution to this issue: the refurbished phone market.
By making some minor clean-ups and adjustments to new phones (with slight defects) and gently used phones, there is an opportunity to both avoid waste and make a profit.
This is a multimillion-dollar market in Hong Kong, the key player in the mobile resale market.
But just how does it all work?
Here are 5 things to know about being a mobile phone reseller in Hong Kong.
Mobile Resale is a Valuable Market
There is a huge demand for refurbished mobile phones.
In many developing (and developed) countries, consumers are looking for a deal on smartphones and tablets.
In Hong Kong alone, around 10,000 factories are involved in the phone recycling business.
Purchasing batches of refurbished phones from large middlemen is done by auction.
The highest price gets the batch, but paying even at HK$1800 per unit is profitable.
These units sell for about HK$3,000, netting a profit of over $1,000 per.
And the market is strong, with a lot of buyers if you know where to look.
Refurbished Phone Sales Promote Sustainability
Besides profitability, another great benefit of the resale mobile phone trade is that it promotes sustainability.
In many developed countries (China and the US especially), tech-savvy consumers hold onto their phones for only about 2 years.
Many are eager for the next model and will dump their phones when the new one comes out.
Another issue for mobile phone waste is factory defects.
Some minor defect might make a phone unsellable in a corporate store, but otherwise, be a perfectly serviceable unit.
In both cases, there is a scramble to promote sustainable practices by reselling these phones.
Even large companies like AT&T and T-Mobile have implemented enormous buy-back programs.
Selling these phones in a resale market allows for profit on otherwise unsaleable items.
But it also solves ecological tangles involved with trashing enormous amounts of hazardous (to the environment) materials.
Everyone wins, including the earth.
Reselling is a Great Option for Great Marketers
The resale market doesn’t require a great deal of innovation or manufacturing know-how. It’s simply identifying a market and filling it.
One of the best ways to succeed in the resale market is to be someone with a good knowledge of marketing practices.
It’s all about finding customers and making your own business attractive.
If you are someone with a decent knowledge of mobile phones and a way to pull eyes to your website, you’re already a step ahead.
There are a lot of consumers in the refurbished phone market, but there are also a lot of sellers.
If you’re able to find a way to make yourself stand out among the crowd, this is a great business option for you.
Hong Kong is the Ideal Marketplace
When looking into the resale phone market, it’s imperative to understand that Hong Kong is a key player in this business.
There are several reasons why this is the case.
- An international business hub. Hong Kong is a landing place for a variety of businesses across the board. Their favorable custom clearance is a large reason for this, as shipping can be a hassle in many countries. Hong Kong is ideal for import/export. In addition, their logistics setup is second-to-none.
- Tax-free. Hong Kong remains competitive by not levying taxes on profits that arise from abroad. They also don’t require sales tax, or tax on dividends
- A large network. Hong Kong has an enormous network of contacts in many business arenas. Resale phones are no exception. In fact, around 80% of the resale phone industry runs through Hong Kong. In addition, they have a stable and safe banking system in place that can deal with both US dollars and RMB
When creating a resale phone business, you must start by getting a permit.
There are general steps to follow here, but the nuances will vary due to where your operations are located.
Research Laws and Regs
Be sure to examine what tax laws are for both buying and selling, and what you are and are not allowed to do within the scope of your business.
This will save hassle later on.
In Hong Kong, you will need to set up a tax ID through the IRD (Internal Revenue Department).
Gather Necessary Paperwork
Once you’ve researched what paperwork is necessary for the application process, gather everything you need and have it ready to go.
Make sure every 'i' is dotted and every 't' crossed BEFORE you start the application process.
You will need a Certificate of Incorporation, and the CI number is an important piece of required documentation.
You will also need your tax ID, and BRC (Business Registration Certificate).
All of these can be acquired online through the Hong Kong IRD.
Apply for Resale Permit
File your paperwork where you intend to buy and sell goods. Follow each step carefully in the process.
You may be required to pay an application fee, as well.
This may seem like a lot of information and requirements, but on the whole, Hong Kong is a fairly simple place to set up and maintain a business.
And to reiterate, it is the number one hub for phone resale and recycling.
To stay on top of the game, gain contacts, and win auctions for products, it’s the place to be.
Be professional and present a legitimate picture to potential contacts.
With a bit of marketing know-how, the right documentation, and a bit of perseverance, you can break into the profitable world of mobile phone resales.