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A quickie about valuing USED computer stuff.

The other day I had the need to pull out my old "rule-of-thumb" for deciding what to pay for OTHER-THAN-FACTORY-SEALED computer hardware/software.

Bear in mind I've been in and around computers now for 36 years and in that time prices and margins have skewed around. Violently in some cases. But still, the formula holds good in my estimation

Basically the principle I've always used is that as soon as something has left the box and been plugged in, its value is, at most, HALF of the brand-new TRADE price.

 

The logic for this, is that if it had to go back into the supply chain, even if it was fit to do so, there would be a re-packaging & testing overhead of about that proportion.

Where the stuff has been used for a year or more its value is much less than that level too.

 

So - this week I helped someone out with this formula when he was buying £10K's worth (at shop price) of top end Apple Kit, Graphics Pad and Software:

 

1) Take the VAT element OUT of the £10K. Now we've got approx £8.34K.

 

2) Then take OFF the estimated TOTAL TRADE margin, say 20% (for ease of demonstration). Now we've got approx £6.67K

 

3) The bid - if the boxes are opened and seals are broken - should be a maximum of half of that amount, so, say £3.33K. 

 

4) If the kit is soiled and has had heavier use, then go for HALF of that.

 

So .... somewhere between £1.66K and £3.33K is where I'd be thinking about pricing that ensemble.

 

The man in question was thinking of paying £5K for "brand new" stuff. No such thing as "brand new" in this context.

 

He ended up paying £3.5K with deferred payments over 4 months or so. So the "rule-of-thumb" did its work quite well.

One other thing to bear in mind is that in some cases, software licensing may prohibit its resale! So don't go paying anything for software UNTIL you know it can be legally sold to you.

Hope that this is helpful.

 

MJB

 

 

 

 

 

Views: 48

Tags: computers, software, used, value

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