What’s the Best Solution for Your Refurb Business? A Spreadsheet vs Software Built In-House vs Purpose-Built SaaS

What’s the Best Solution for Your Refurb Business? A Spreadsheet vs Software Built In-House vs Purpose-Built SaaS

It’s important to know how you’re spending and earning money when working with limited capital every sales cycle. Current tools for refurbishment businesses don’t help with this.

Bas De Vries
Bas De Vries - COO and Director of IT-Operations at Amac

How do refurbishers view software? Our market research and experience shows that the average refurbishment toolkit supports day-to-day operations well, but does not support business growth or profitability.

Here’s why.

  1. Most refurbishers do not have a unified solution that tracks inventory from sourcing to sale. Sourcing is managed on anything from excel spreadsheets to basic database tools built in-house.
  2. Sales is managed similarly, with the needs of the marketplace more important than the ability to store data in a way that enables better business decisions.
  3. Sales data is often spread out and putting together a complete dashboard — which devices or which vendors were most profitable with all factors and costs taken into account — is either not possible or takes too much time.
  4. Refurbishers have a diagnostics tool that identifies issues. Based on the test results a device is moved on to the next step in the process. But most businesses have this system working in isolation, without an integration to their workflow software or their inventory management system.
  5. Refurbishers sell on multiple platforms, from their own webshop to marketplaces like BackMarket and Refurbed. Listings on these sales channels are managed manually and separately because API integrations cost too much and take too long to build and maintain.

In short, it’s important to know exactly how you’re spending and earning money when you’re working with limited capital every sales cycle.

Spreadsheets Cause More Problems Than They Solve

We’ve come across two types of businesses.

One, a company that relies on a mix of siloed tools. This usually means having a diagnostics system, a spreadsheet that acts as a workflow management tool, and a webshop or marketplace accounts.

The second type has customized an in-house solution on top of a database tool or an inventory or workflow management software. There could be an integration to a sales channel, but it’s often easier to upload and download data to marketplaces.

Neither is a scalable solution. It’s okay to rely on such setups when starting out, but business growth is dependent on greater visibility, efficient automation, and effective integration

Using spreadsheets has obvious disadvantages.

It’s incredibly easy to make mistakes, is not user friendly, and there is no real user management. Excel just wasn’t built to be a solution to run a refurbishment business on.

A case can be made for custom-built in-house solutions. In fact, it was a viable solution even for small businesses in the early 2000s when you had to buy licenses to business software that would age poorly in a year or two.

The growth of SaaS (software as a service) solutions has changed things dramatically.

Why Businesses Struggle with In-House Development

The disadvantages of building in-house now outweigh the benefits. SaaS businesses have been able to provide more value for spending in recent years. Here are some factors to consider if you’re planning to develop your own solution.

Designing Software is an Upfront Cost with an Unknown Timeline

Even the best project managers cannot estimate how long it will take to create a solution that you can use everyday to manage your refurb business. Plan to invest in it until that point.

Developers are Not Easy to Hire

Good software developers cost a premium, and you’d find it difficult to find enough people even if you’re willing to pay well. Even more so if you’re planning to hire full time. 

Aftersales Domain Expertise

Developers need to be both technically competent and have some experience understanding the aftersales business. If not, plan for an onboarding period so that they can get acquainted with your business needs.

Maintenance: Bugs, Integrations, Legal Requirements

Developing a product is just step one in the process. Even the most well-designed solution gathers technical debt over time. Having someone on call to fix bugs is a must. There is no perfect software, bugs are a way of life.

Plus, integrations aren’t stagnant connections. API endpoints change and are improved. And sometimes laws change. For instance, privacy laws about what information you store, how, and how long. Change has to be built into the plan and monitoring changing requirements is a full-time job in itself.

Project Management

Prepare to take on a ‘second job’ if you don’t have the manpower to allocate a project manager. There needs to be constant communication between your business and the developers so that the final product meets your expectations.

Slower Innovation

This is why software-as-a-service (SaaS) has become so popular. A full-time team  combining domain expertise and technical skills continuously improves the product and accelerates development. In-house teams don’t have that luxury.

In short, SaaS subscriptions turn out to be cheaper and more efficient over the long term. You get faster development without having to overhaul or pause your workflows every time there is an update.

Why Integrated Software is the Superior Solution

Data and reporting. Breaking down the silos enables you to connect the dots faster in an integrated system. Plus, you minimize human error because information is not being manually copied from one system to another.

But why should you care about reports and tracking your process from sourcing to sale?

  • You need complete control of your pipeline: This means being able to track real-time progress of every device and batch through your recommerce process. This starts from sourcing, actually getting your hands on the device, inspection and diagnostics, repair or refurbishment, and sale.
  • More profitable purchases, accurately forecast sales: The control you gain results in the ability to identify which devices are most profitable and to evaluate vendors over the long term. The benefit? You gain the ability to spend money in the right way and accurately forecast sales.
  • Manage and optimize stock levels: It’s relatively easy to ensure you have the right products in stock and optimize your inventory if the data you have accurately reflects the nuances of your recommerce process.
  • Streamline technician performance: If you track your process, you also end up tracking workflows. This provides you with information on where technicians are struggling to keep pace or making mistakes.

Sourcing is the single most difficult thing for refurbishers right now. It’s a seller’s market and, therefore, it is important that you make the best purchasing decisions.

You make better purchasing decisions when you have the ability to see beyond just an overview of sales margins, into understanding factors like rotation times, return rates, and pipeline metrics by group, type and device

Fixably Refurb is being developed to be an integrated solution for refurbishers, enabling you to track devices from sourcing till sale. It’s solving problems that refurbishers have told us is a roadblock to profitability and scale. Book a demo to learn more.

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