This post will focus on the used server market, its portrayal in the marketplace and what to look for in a used IT hardware reseller.
In the world of IT sales, the word “gray market” is thrown around with nonchalance by sales reps at large manufacturers and large reseller partners alike. The term is misapplied, and purposely used to spread fear, uncertainty and doubt. Some sales reps will even go as far as to refer to used IT hardware as stolen/counterfeit equipment.
Why would they do that?
The manufacturers don’t like used hardware resellers, and they never have.
In most cases, we can offer their current-generation product at steep discounts, and their previous-generation product at staggering discounts.
While the price delta will be huge, the performance delta may not be that much at all. Of course, the servers may be lightly used and refurbished, but they will have plenty of usable life left in them.
The fact of the matter is this: if you’re dealing with a reputable broker or reseller, the product is likely as “white market” as girl scout cookies.
Whether you are looking at used servers, used storage, or used networking gear, it is important all the same to take obvious precautions, such as: if it sounds too good to be true, it is.
Make sure you’re working with a reputable reseller to ensure your equipment will measure up to the specification you are expecting.
There is no shortage of fly-by-night or “garage” resellers.
Guidelines for qualifying a hardware reseller/vendor are listed at the bottom of this article.
Before we get to that, consider the following…
The manufacturers and huge IT distributors (who shall remain nameless) will likely try to convince you of any of the following scenarios regarding open market used versions of their products:
- The used system was stolen or improperly acquired
- The used system is a counterfeit from overseas
- The used system was a reject/factory second
The truth is likely any of the following scenarios:
- The equipment was traded-in from another user just like you, who decided to upgrade or change their systems.
- The equipment has come off of a lease and has been sent to the open market
- The equipment was thoroughly tested and updated to the manufacturer’s specifications before shipment.
Due diligence – What should you look for in a reseller?
- Check the number of years in business
- Check online reviews
- Check the Better Business Bureau for possible complaints.
- Qualify the equipment – after you reach an agreement (in most cases) the reseller should be able to provide you serial numbers of the system, and test reports.
Ask if the reseller can put the following in writing on your quote and eventually on the signed purchase order:
- All hardware is (manufacturer) ORIGINAL equipment.
- All hardware is guaranteed eligible for maintenance.
- Check how long their working-guarantee is before signing the deal.
- Ask about any special licensing on the equipment. Some manufacturers require recertification or new licenses in order to acquire maintenance and/or software.
- Get credit terms if you can.
Organizations of decent size should be able to negotiate payment terms with a proper Dun and Bradstreet history. This yields the opportunity to try before you buy. If the equipment doesn’t meet your standards, you can return it without trying to recover your payment.
While there are some sharks and rip-off artists out there, it is most likely that what you are hearing is manufacturer’s hype and FUD to attempt to deter you into purchasing new hardware at a much higher price tag. Hopefully these tips will help you navigate through the the used IT marketplace.
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