Have an old mobile phone or MP3 player you don't use anymore? How about an aging camera or GPS device? If you do, Amazon wants them.

Yesterday, the online retail giant announced a major expansion of its trade-in program that will make it easier for consumers to unload their used and unwanted electronics.

Using Amazon's trade-in website, a consumer can find out what her electronics equipment is worth based on its condition. Once she's decided to sell, Amazon provides a pre-paid shipping label so that she can send her items in.

Within 48 hours after shipment is received, Amazon issues an Amazon Gift Card.

Trade-ins and buy-backs aren't new, of course. Mobile carriers like T-Mobile, retailers like Best Buy and standalone businesses like Gazelle all use these models in some fashion, and will compete with Amazon in the electronics space. But Amazon has some obvious competitive advantages.

For one, as the world's most prominent online retailer, it may be able to move more of its used inventory, potentially allowing the company to offer higher trade-in values.

It can also look to tap into its customer base to solicit trade-ins. For instance, an Amazon customer who bought an iPod several years ago could be encouraged to trade that in to buy a newer model. Conceivably, this type of solicitation could even be combined with promotions to lure more consumers into a two-sided transaction where gift card payments due are spent immediately.

Despite the potential, Amazon's expansion of its trade-in program really isn't all that interesting in and of itself. But it does highlight the fact that there is still huge opportunity to create new markets in online retail.

Smaller online retailers should take note and consider that there are plenty of untapped opportunities available to them as well. Buy-backs and trade-ins present an obvious arbitrage opportunity for retailers who sell products made by multiple suppliers. For retailers who sell products they manufacture, buy-backs and trade-ins can be used to seize greater control over supply and demand.

Patricio Robles

Published 19 May, 2011 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (2)


John Kim

I totally want to do this for games.

about 7 years ago


Nick Greening

It is interesting to see Amazon spreading their wings and trying to move into different territory. There doesn't seem to be a major organisation in this market, possibly because it isn't the most lucrative but Amazon will do well because it is trusted name.

over 5 years ago

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