Comments on: Secondary Markets- A New Growth Opportunity For Best Buy

By: Joe

Joe — Fri, 15 May 2009 15:49:29 +0000

There are dangers in trying to be all things to all people. But its worth a try. Maybe it should be unaffiliated with the Best Buy brand, though. Call it something else with a separate website. That way if product quality issues arise or BB makes the decision to back out, the BB brand name will not be affected.

Love the idea of recycling old products though.

By: Brad Glisson

Brad Glisson — Tue, 05 May 2009 19:32:32 +0000

I know that last summer Best Buy’s Futureshop locations in Canada began testing the used gaming business, and I imagine it went well seeing as they exploded from just 6 test locations into covering most of the country. And I read the Kotaku article a few weeks back quoting an inside source with Best Buy as saying that used gaming was going to be beginning around the end of March beginning of April. But I’m curious as to what makes Best Buy think this will be more successful now as opposed to several years back when they tested this out in California? And is the Kotaku article correct, is Best Buy testing already in the states?

By: Brian Hayashi

Brian Hayashi — Fri, 24 Apr 2009 22:34:46 +0000

When I started my last company, which specialized in online services for mall-based retail, there appeared to be tremendous cost savings and channel management opportunities in this area. For example, you could take RMAs and extend that process into the retail store, thereby helping to triage process flows and thereby reduce logistics costs.

These days I am interested in leveling the playing field when it comes to the dynamic between the consumer and the employee. We’ve developed a Link Management System that enables any employee to demonstrate how their store’s merchandise stacks up against the “Best Of” articles or “lowest price” circulars.

By: Mr Morgan

Mr Morgan — Fri, 17 Apr 2009 03:04:10 +0000

Great post!
I am glad to see Best Buy is doing some things to address the environmental impact of cycling through new models of electronics. We often give away, sell on eBay or junk our old stuff when the new model comes out. a buy-back program makes the whole process easier, and makes me fell better about buy the item from best buy in the first place.

By: N. Pfeifer

N. Pfeifer — Wed, 11 Mar 2009 16:14:00 +0000

Charlie, good to see you again! Strange, I never heard Sev mention used games . . .

By: Charlie Flinn

Charlie Flinn — Tue, 10 Mar 2009 21:22:42 +0000

Sev Maynard and I wrote a Used/Secondary Markets whitepaper a couple of years ago when we looked at used games. Let me know if you are interested in looking at it.

By: N. Pfeifer

N. Pfeifer — Fri, 06 Mar 2009 06:50:26 +0000

I think secondary markets are a great opportunity across the company . . .

. . . except in gaming. While I agree with Steve in the mediation position between a buyer and a seller (creating a sort of Amazon/eBay/cheapassgamer affair), I simply can’t see the investment ever becoming worth it in the gaming space.

Used games work for Gamestop because it’s critical to their operating model. We work on, buy it large, stack it high, let it fly. In the post-mortem that I have seen in used gaming tests, I’ve seen that we can’t implement used gaming because we simply don’t have the culture for it. Stacks of used games piled high while money walked out the door.

Gamestop is almost predatory in its used game sales because even THEY know how difficult it is to sell a used game, even at decent prices and decent discounts for Edge card members. As you know, they even have facilities on standby with industrial grinders to resurface games that keep getting returned because they simply don’t work.

The reason I say it wouldn’t be worth it for us (although with enough of a push, it COULD happen) is that the secondary market for gaming is going to evaporate in the next 5-10 years. Each new generation of consoles will bring in less and less software and the secondary market will simply get smaller and smaller. Gamestop is expanding as fast as they can now to take advantage of this business model while they can, but the inevitable shuddering of many of their locations as physical games disappear is just that: inevitable. By the time we perfected used game sales, the point of diminishing returns will have long-since past.

When I wrote my Plan for gaming two and a half years ago, I felt that this was a strong area we needed to pursue, but the industry’s changing fast now. If this were a decade or two ago, selling used games would’ve been the top of my list of my priorities. Now? Well, we’ve got plenty of opportunities in gaming that aren’t quite as risky and will put us ahead of the curve in game sales for decades to come.

By: Errick

Errick — Fri, 06 Mar 2009 05:56:05 +0000

The program would make sense as long there is strict control in place. Video Games make sense, but at the same time some hardware does not. Best Buy would have to choose carefully on what product categories to resell.
Now with our recycling program in place, it should be possible to determine if Best Buy could give a customer a gift card worth the value of the resellable product or recycle the product. Basically, a gift card can be issued, and Best Buy collects their information (e-mail address or phone) to notify them if they will recieve a buy back credit or if the buy back was deemed unsellable, then recycled. During that process, Best Buy inspects and attempts to refurbish the product. Since the gift card number would be stored into Best Buy’s system, Best Buy should be able to credit the gift card once the buy back product is deemed resellable.
The other issue that would come into place is how would the customer see/shop the “used” products. The stores sometimes have problems moving Open Box products out the door, especially computers. It usually meant unusual mark downs. DTDeals’s partnership with Best Buy is a start, but posting electronics online tends to be tough to determine the condition of the product, and if the customer can enjoy the product in its condition. I have seen stores that sell used instruments with little space left for stuff, and their storage area packed. But at the same time, the used instruments are the most profitable and keeps their buisness afloat. So Best Buy would have to do a lot of research on how would this affect the overall customer experience in the store, if Best Buy does decide to resell within the store.
Best Buy has to carefully look into the market to determine the logistics and the viability of the service. Video Games, Movies and Music (Physical Media) is just the start, which is pretty easy to track. But once we expand into electronics, the logistics become difficult. One solution is to create a physical outlet store (just as Disney does with their old stuff), that would seperate the Secondary Market experience from the Best Buy experience, but this would not help Best Buy’s overall impact with the Secondary Market. Tracking the merchandise would also balloon the inventory system aka RSS. So a seperate tracking system may need to be implemented.
Personally, I say keep Best Buy’s Secondary Market initiative towards Physical Media. As far as used electronics go, there needs to be a strict standard on what Best Buy accepts and denies. Best Buy’s customers tend to shop at Best Buy for the latest, greatest electronics, not used, beaten up devices. Best Buy can create a website with used electronics (not DTdeals), but how would Best Buy gaurantee the electronics the customer purchases.

By: Curran

Curran — Fri, 06 Mar 2009 01:32:58 +0000

Remember Tech Trade In ? We did used games trade in and sales in Chicago. Could be some small nuggets of learning both good, bad and ugly there. Let me know if you want a download

By: barryjudge

barryjudge — Sat, 28 Feb 2009 16:53:59 +0000

My 13 year old goes to Gamestop. He recently was there and texted me saying “Dad you are missing the boat. I told you to do take back used games 2 years ago!” He was 11 at the time. I think he is right. I am missing the boat and some sales and some traffic. I hope this project gets after this opportunity.