Refurbished Goods: The New Way to Shop

Published by MBA Skool Team, Published on November 16, 2015

Business dynamics is changing rapidly today, whether it be specialty products, shopping goods or convenience consumer goods, the way these are sold and purchased is undergoing a rapid transformation. Seeing technology growing at a fast pace, from smart phones and iPods to Google glass and smart watches, even the relatively new products are becoming outdated fast.

Refurbished goods are the products that are being returned to a manufacturer or vendor for several reasons, these are normally tested for functionality and defects before they are sold again. Around $12-15 billion worth of goods are returned every year in India, of which returns from OEMs(Original Equipment Manufacturer) / retailer across all industries is 4-5%. Despite being a new sector, it has a lot of scope in the e-commerce space as well because the return policy is more customer friendly (Return Rate is around 10-15%), and also Cash-on-delivery (COD) is being introduced wherein there is spur of the moment buying followed by buyer remorse when the product lands up at the door.

Image: pixabay

Besides second hand goods, some reasons why products get labeled as refurbished are:

1.Opened box: Technically, there should be no issue, the item is ‘new,’ but only the box or package was simply opened.

2.Demo units: Demonstration units used at trade shows and retail stores may be repackaged as refurbished items.

3.Shipping or exterior damage: Minor dents or scratches to the product during shipping would force a retailer to return it to the manufacturer.

4.Production defects: If minor defects are found, the manufacturers might repair the returned defective units and send them to retailers as refurbished units.

Refurbished goods help the established players/brands selling in the market, also it is available to the lower/middle class segment who are not able to afford the new technology earlier like Apple, etc. Refurbished electronic goods are available in the market at half or three-fourth of the price of a new sealed product. They are claimed to be as good as new, and come with the seller's warranty, instead of a manufacturer's warranty.

Online/Offline Mode

These goods are offered via two means- Online and Offline. The offline refurbishment market in India is a huge and is unorganized, it is unregulated and also breeds uncertainty in the minds of a customer. A refurbished seller, who is based on a national level and has the expertise as well as the capital to actually not just repair but also certify that the product that it is as good as a new one helps to add credibility which is being provided via Online mode. These Online mediums are also entering the Offline space to make it more organized.

There are various key players in the online refurbishing space in India, GreenDust Private Ltd,, Reboot, ReGlobe to name a few.

Reverse Logistics

One of the major factors that will contribute to the success of Refurbish market is an efficient Reverse Supply chain. Reverse logistics refers to the process of moving goods from the final destination to the Vendor/Manufacturer either to capture value or dispose them properly that is to remanufacture or refurbish. It provides a strategic advantage to the ecommerce business as it forms a very important part of order fulfilment.

The Whole process of returns is based on the principal of 5Rs –






Most reverse supply chains are carry out five key processes:

• Product acquisition: Obtaining the used product from the user by the seller or manufacturer.

• Reverse logistics: Transporting products to a facility for inspection and disposition.

• Inspection and disposition: Assessing the condition of the return and making the most profitable decision for its reuse.

• Remanufacturing or refurbishing: Returning the product to its original specifications.

• Marketing: Creating secondary markets for the recovered products.

Quality checks and inspection is also a key note in this industry, Stores like Reboot buys discarded electronic items for reasonable rates and then refurbishes them in their factory. The old products go through a 16-point check, which is a set of processes to ensure quality, before they are packaged and sold to customers through their retail outlets.

Average spending of Asians is pretty low as compared to the world, and does not have capacity to afford new expensive technology devices. Refurbished goods with its substantial price reduction, offers opportunity to individuals with lower spending limits.

The various factors that will contribute to the growth of this sector are:

1. Trust among Customers

2. Perceived risk (Financial, Psychological, Physical, functional and social)

3. Ease in buying process

4. Medium (Online/Offline)

5. Quality assurance ( Warranty , Certification, Internal quality checks)

6. Turnaround time

7. Life span

8. Brand of refurbished goods

9. Price

10. Ease of Returns

There is a huge opportunity for growth in this sector, the increasing competition both Online and Offline will play a key role here.

This article has been authored by Sumit Kumar from Great Lakes Institute of Management


1. Aparna Ghosh, 14.07.2015 “This is how a Gurgaon-based startup is introducing India to refurbished goods”

2. Innocent Chidi Nnorom and Oladele Osibanj, Overview of Prospects in Adopting Remanufacturing of End-of-Life Electronic Products in the developing Countries

3. S. Pokharel, and A. Mutha. “Perspectives in reverse logistics: A review”. Resour Conserv Recycl 2009, 53, pp. 175-182

4. V Daniel R Guide Jr;Muyldermans, Luc;Van Wassenhove, Hewlett-Packard Company Unlocks the Value Potential from Time-Sensitive Returns.

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