When we speak of reverse logistics, we don't often think of it as a way of making money, at least not for the person or company returning something. Sure, the provider of the reverse logistics charges for the service, but for most us returns are about getting rid of something we don't want, didn't order or can't use as is.
Full Circle Wireless, a provider specializing in the return of all types of wireless devices, has built its business on changing that perception. It wants its clients to think in terms of being paid for cast-off devices - mostly cell phones, but also aircards, netbooks, tablets or any other type of wireless devices - those things that might otherwise be stuffed in office desk drawers or cabinets for years.
Full Circle takes the devices, in any quantity, assesses their value and sends a check to the party returning them. Meanwhile, the items returned are either repaired and sold to wholesalers, stripped of useable parts or recycled. More than 200,000 wireless devices were processed by Full Circle Wireless last year alone, says Shelton Basham, company CEO and general manager. More than 80 percent of those were re-purposed in some fashion and sold.
Companies in any business or vertical and of any size are potential customers of Full Circle, Basham says, because the average life of most cell phones is about 18 months before users decide to get rid of them. The Alaska Railroad Corporation is just one of many entities that have opted to work with Full Circle.
The ARRC, as the company' shorthand has it, is a self-sustaining, full-service railroad connecting ports and communities from the Gulf of Alaska to the state's interior. Owned by the state, the ARRC is reported to be unlike any other State of Alaska agency because it is incorporated and run like a private business. The ARRC receives no operating funds from the state, nor are its employees state employees. Rather, the corporation and its workers generate revenue through freight, passenger and real estate services to cover personnel, operations and maintenance expenses. It offers passenger and freight service from Seward to Fairbanks-North Pole.
The ARRC, of course, has communication needs just like any other company, says the railroad's Nancy N. Davis. And the need to spin off old stuff. "When we first discovered Full Circle Wireless, I sent out about six boxes with all of our old phones," she says.
Many companies first learn of Full Circle through representatives for wireless carriers, such as Verizon and AT&T, Basham says. "In fact, that's how we have grown the business - the wireless reps close the deal with their customers because of us."
Illustrating, he says, "A rep talks to your company, says you need his brand-new phones for the 100 people you employ, your IT manager says they look great but we don't have that in the budget. That's not a problem. The rep tells you to call Full Circle Wireless and we say we'll buy your old stuff that's not broken and give you money to buy new stuff. And that's how we've grown the business."
Indeed, from a small shop almost eight years ago focusing on individual consumers Full Circle has turned to specializing solely on businesses, employing 10 times the staff of five it started with. In the beginning, Basham says, he and his colleagues relied on a list of about 16 representatives to bring in business. Today, Full Circle has relationships with more than 3000 reps across the country.
So, how does it work? "We have that equipment shipped to us, and within 15 business days we test it, and if it's useable we make the payout to the customer," Basham says. "In the world of reverse logistics, there is the opportunity to make money off what people otherwise couldn't. And IT departments love talking to us because they're used to spending money as opposed to making it. Incidentally, we can write checks to them or to their favorite charity."
Then what? "Of course, we resell it. We've been calling ourselves green since before Al Gore had the slide show."
In fact, of every 100 phones received, Basham estimates that 20 to 30 have been sitting in a desk drawer long enough that they can't be reactivated with a new service. They have to be either recycled or cannibalized for parts.
But the overwhelming majority of it can be re-used. "You send them and we sell them on e-commerce sites or to other wholesalers. Ninety-five percent or more stay in the U.S."
Full Circle's inventory management system keeps tabs on returned units by manufacturer's name, but it doesn't wait to gather large amounts of any one device before it turns them over on the resale market. "We're not moving large skids filled with used phones." he says. "It's very rare that any company can supply you with thousands of any one unit at one time."
Full Circle can do basic repair work: a BlackBerry needs a new trackball, cleaning a charging port, or putting a new housing on a unit. And it's looking into doing more extensive repair work. But most such work is jobbed out. "We're doing cosmetic repair."
Typically, units are sent to Full Circle by FedEx, which is precisely what Davis says her employer, the Alaska Railroad, does. "I keep a log of what equipment I'm sending," she says, "and package them in a box with a prepaid FedEx label."
Any company with an account with Full Circle Wireless can just print its own FedEx labels, of course, and send the package in. "We'll take care of everything else," Basham says.
Davis says she's never waited longer than a month for payment, and Full Circle has been good at keeping her in the loop about the status of things. "They've sent me email notifications on every step in the process," she says.
As Basham sees it, there are essentially three reasons why a customer wants to do business with a reverse logistics provider like Full Circle Wireless: they know there's intrinsic value in their discarded items, but they don't know how to get it out; they are worried about security of information - "We have a process that erases all information on phones, which are small computers, after all" - and they are concerned for the environment.
Full Circle can take care of all of those concerns, he says, yet what his company is doing is but a drop in the bucket. Figures are difficult to come by, but some estimates say 148 million cell phones become obsolete every year in the U.S. alone. And who knows how many have been lying around in boxes somewhere for years?
There's a lot of business to go around, Basham says, and "We're poised for growth."
Full Circle Wireless
Alaska Railroad Corporation
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