Community Resources

The Threat of Buying Gray

Last week I attended the AGMA Global meeting in London. AGMA (The Alliance for Gray Market and Counterfeit Abatement) represents members from a wide spectrum of industries who see the growth of the gray market as a significant threat to profitability and growth.

Most information technology companies are successful thanks to distribution channels that move products from manufacturer to the consumer through a series of legitimate distributors and partners globally.

There is, however, a growing and quite detrimental market that can cause unwitting customers to encounter serious problems through purchasing technology products with invalid warranties, some designed for use in other countries—or worse, products containing counterfeit parts. These experiences erode customer satisfaction and damage brand integrity, causing significant profit erosion for manufacturers.

Welcome to the global “gray market,” where branded products have been diverted from the authorized distribution channel within a country or are imported into a country for sale without the consent or knowledge of the manufacturer. Gray market products are generally sold at lower prices than those offered by authorized distributors. Gray market products pose a serious challenge to information technology manufacturers and their authorized distributors. A recent study reveals that IT manufacturers alone are collectively losing up to US$5 billion in profits annually—a figure that is growing.

Historically in the IT market, many manufacturers did not have secondary market Certified Pre-Owned programs which encouraged gray market activities, as customers had no other choice where to source products that the manufacturer had moved to ‘end of sale’. Legacy Infrastructure is sometimes very difficult to transition, especially in sensitive markets such as Service Providers where customers are not prepared to easily move away from a service platform that works and is trusted.

Within the gray market there are no guarantees, whatever the seller may say. There is no guarantee you are even buying genuine product. There is a huge boom in counterfeit electronics driven out of cheap manufacturing in the Far East. They may look genuine but could present serious risks as they will not have to adhere to the same safety and QA processes OEM’s do. Then there are the security concerns around what firmware is loaded. Could this second hard card load a virus into my network? ‘Refurbished’ does not mean using OEM parts and processes and hardware replacement guarantees from someone who may not be around tomorrow and are not worth the paper they are written on.

All of the above can present significant compliance issues for companies. Non-compliance with regulations and Intellectual Property laws can be very expensive and damaging from a brand perspective for both the customer and the OEM. High profile outages caused through non-standard sourcing result in loss of customer loyalty and damage the OEM even if the equipment at fault was counterfeit.

Certified Pre-Owned programs allow both customers and OEM’s to safeguard their brand integrity and deliver compliant solutions.

One final thought: In the past when customers have bought gray they have been able to get the equipment re-instated with manufacturers to access support and up to date software. Be aware the costs of re-instatement can far outweigh the initial price benefits of buying gray. In some cases, re-instatement and re-registration fees can double the cost of the original gray purchase.

There will always be a price incentivized gray market, but Certified Pre-Owned programs can provide cost effective, compliant and manufacturer supported alternatives without the threats presented by an unregulated gray market.

 

http://www.agmaglobal.org/
http://junipercpo.net/

 

Julian Smith

Sales Director EMEA

PureWRX

PureWRX Hires Europe Sales Management to Continue International Expansion

Industry veterans will add offices in both Dubai and the United Kingdom

AUSTIN, Texas–(BUSINESS WIRE)–PureWRX is pleased to announce that Spencer Mitchell has joined the company as Vice President, Europe – Middle East – Africa (EMEA), where he will play a central role in continuing the rapid growth trajectory of the PureWRX Certified Pre-Owned (CPO) programs in EMEA. Mr. Mitchell will be based in Dubai. Joining Mr. Mitchell is Julian Smith, who has been hired as Sales Director for the same region and will be located in the United Kingdom.

PureWRX President Jon Belcher said that “As the Service Providers in Europe wrestle with market challenges, stable existing infrastructure becomes ever more important. By combining the technical and commercial skills of Spencer and Julian, PureWRX can help those customers address their needs with certified pre-owned products, backed by their leading OEM vendors.”

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Martin Garvin Joins PureWRX Board of Advisors

Supply chain and procurement veteran brings industry expertise from Dell and Juniper Networks to assist PureWRX with global operations.

AUSTIN, Texas–(BUSINESS WIRE)– PureWRX is pleased to announce that Martin Garvin has joined the company’s Board of Advisors, bringing supply chain and global operations expertise gained from senior executive roles at Dell and Juniper Networks.

PureWRX is ramping up Certified Pre-Owned programs with major customers in the US and Europe, and Mr. Garvin will advise on the most efficient ways to expand supply and refurbishment operations. PureWRX CEO David Schofman said that “As our company expands internationally, the complexity of how we serve our customers will only increase. Martin’s experience with large-scale operations will be an invaluable asset for our team as we address those challenges.”

From 2001 to 2008, Mr. Garvin was at Dell Computer, where he was first the Vice President of Worldwide Procurement and then later Senior Vice President and Chief Procurement Officer. In these roles he oversaw the strategic leadership and management of Dell global supply chain, manufacturing, and procurement operations. He led a worldwide team with direct reports in commodity management, supplier engineering, materials, logistics, general procurement, and international trading. Prior to Dell, Mr. Garvin held significant Operations positions at Sun Microsystems and Hewlett Packard.

Mr. Garvin was most recently at Juniper Networks, where he was the Senior Vice President of Global Operations. While there, he directed global projects and operations to achieve the overall growth, productivity, and profitability objectives of an organization delivering high-performance network solutions to service providers, enterprise organizations, and the public sector. He has served on three companies’ boards of directors, and he has an MBA degree from San Jose State University.

“PureWRX has demonstrated that Certified Pre-Owned (CPO) programs are a very important way for IT hardware manufacturers to build closer ties with their best customers. And the closer you are to customers, the more complicated the procurement and operational requirements can be, especially for global service providers,” Mr. Garvin said. “PureWRX is on a strong growth trajectory in the US and internationally, and I look forward to helping the company meet those customer needs while at the same time making their operations as efficient and effective as possible.”

PureWRX is the leader in developing and managing CPO programs for IT hardware manufacturers and global enterprises. The company’s senior team has developed CPO programs for over 40 brands in various industries generating over $1 billion in sales. For more information, visit www.purewrx.com.

Circular Economy Toolbox

Circular Economy Toolbox

The U.S. Chamber of Commerce Foundation Corporate Citizenship Center (CCC), The Sustainability Consortium (TSC), and The Retail Industry Leaders Association (RILA) have developed this web-based toolbox to help the private sector incorporate circularity into their core principles and business practices. The toolbox assists companies at any stage of the circular economy to develop programs and practices that are critical to capitalizing on the business value of the circular economy. By bringing the circular economy out of the theoretical and into the practical, it will provide actionable tools and steps for companies to adjust their practices to take advantage of the long-term benefits of becoming more circular.

You can navigate the toolbox in two ways. First, you can look at how different circular business practices can be conceived, built, and conducted by topic matter. Links to these specific project topics are found above on this page and on the sidebar of any of the project topics pages.

The industry leader in developing Certified Pre-Owned Programs for IT Hardware manufacturers: PureWRX

‘Creating and capturing revenue opportunities from the $300B IT hardware secondary market.’

PureWRX, based in Austin, Texas, has been building Certified Pre-Owned (CPO) programs for brands for nearly 20 years. In that period, PureWRX has sold over $800M worth of CPO products for over 40 manufacturers. The PureWRX goal is to help companies utilize assets for their highest and best use in a market that exists outside the main focus of most OEMs.

The company works directly with key stakeholders across your organization to implement best practices for pricing, sales, operational, financial and legal aspects of launching and growing a CPO program. Founded in 2012, the company also has offices in Dallas, St. Louis, Atlanta, Greenville, Chicago, Sunnyvale and Amsterdam.

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PureWRX Achieves TL 9000 and ISO 9001:2015 Quality Management Certifications

Less than 100 companies globally share unique designation.

AUSTIN, Texas – July 26, 2017- PureWRX, the leading Certified Pre-Owned (CPO) platform in the IT hardware industry, announced today that it has successfully completed a full audit of its supply chain management system to complete the rare designation of ISO 9001:2016 and TL 9001 certified.

The TL 9000 Quality Management System is the telecom industry’s unique extension to ISO 9001:2016 and was developed to meet the supply-chain quality requirements of the worldwide telecommunications industry.

PureWRX worked with National Quality Assurance, U.S.A., (NQA) to meet the required standards for TL 9000:2015 and TL 9000:2016-V (R6)/5.0 – a designation shared by less than 100 companies worldwide.

“As we continue with our national global expansion, it was necessary to demonstrate to our customers that we are 100% focused on maintaining the highest standards of operational excellence,” said PureWRX Vice President of Operations Matt Hungate. “We are thrilled with the designation and focused on executing our rapid future growth plans.”

The announcement comes on the heels of the company’s recent news that it had appointed Jon Belcher, a former Juniper executive, as President, joining Hungate as the second industry veteran jump to the fast growing start-up in leadership positions.

PureWRX is the leader in developing and managing Certified Pre-Owned programs for IT hardware manufacturers and Fortune 100 global corporations. The company’s senior team has developed CPO programs for over 40 brands in various industries generating over $800M in sales. For more information, visit www.purewrx.com.

Additional resources at:
TL9000 Overview
ISO 9001 Quality Management

PureWRX Hires Computer Industry Veteran Jon Belcher as President

Recent hires enhance depth of management and industry expertise to expand the fast-growing Certified Pre-Owned platform.

AUSTIN, Texas–(BUSINESS WIRE)–PureWRX is pleased to announce that Jon Belcher has joined the company as President, where he will play a central role in continuing the rapid growth trajectory of the PureWRX certified pre-owned programs. PureWRX CEO David Schofman said that “Jon’s extensive experience in the industry adds further credibility to our approach of helping companies improve their market position and recapture the value from their product investments.”

Jon has spent the past seven years at Juniper Networks in several key executive roles. Most recently, he served as Vice President, Commercial and Partner Sales and prior to that he was Vice President of Partners for Asia Pacific. Juniper Networks has partnered with PureWRX to create the Juniper Certified Pre-Owned program. He has also held senior sales management positions at Augmentix, Neterion, Quantum Corporation, and Fujitsu. Belcher has a degree from the University of Arizona in Business and Marketing and is a former Marine.

“Certified Pre-Owned (CPO) initiatives are a strategic profit opportunity for manufacturers. In conjunction with compliance efforts, CPO programs can also address issues of unauthorized sales and distribution of product through the secondary or gray market. With CPO, companies can more effectively manage the end of their product lifecycles,” Belcher said. “Having seen the benefits from Juniper’s program firsthand, I’m excited to be part of PureWRX and expand on the opportunity in our industry.”

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KPMG – Gray markets: An Evolving Concern

Unauthorized sales continue to raise costs and damage brand reputation

The “gray market” refers to an alternative channel through which branded products are diverted from authorized sales channels into the hands of dealers, brokers or the open market. Gray market vendors may be unauthorized to sell those items, or may not have permission to offer products in a specific country or region.

This unauthorized activity has long been a problem for OEMs, which can lose significant revenue and margin from price erosion, as well as improper sales and marketing discounts and potential brand reputation risk. Further costs include handling end-customer issues caused by inadequate customer service, product handling and installation, and a lack of warranty coverage (which manufacturers often provide, at no cost, to maintain customer relationships).

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PureWRX: Reinventing The Secondary Market for Networking

A Certified Pre-Owned program comprehensively reduces the sales of unauthorized (gray market) products—providing end users a trusted option for maintaining a legacy network. Meanwhile, OEMs enjoy a new and highly profitable revenue channel that has very strategic benefits

For the last 20 years, team at PureWRX have been building CPO (Certified Pre-Owned) programs for OEMs across multiple verticals from golf clubs to power tools. Their model is unique in that they partner directly with the OEM providing them a full turnkey solution. To date they have executed the model with over 40 companies including networking giants like Juniper Networks. In October of 2015, they announced the partnership and the launch of Juniper Certified Pre-Owned (JCPO) at www.junipercpo.net.

JCPO provides end users an entire new line of remanufactured, Juniper certified hardware. One of the many benefits of the JCPO program is that it comprehensively reduces the sales of unauthorized (gray market) products—providing end users a trusted option for maintaining a legacy network.

Service Abuse White Paper (Pricewaterhouse, AGMA, 2009)

Effectively managing the multi-billion dollar threat from product warranty and support abuse

Facing badly bruised credit and financial markets, a sluggish economy, and the obligation to grow or even stabilize revenue and rein in costs, businesses must be keenly aware of threats to business performance and reputation.

With much of the world still reeling from the economic downturn, PricewaterhouseCoopers (PwC) and the Alliance for Gray Market and Counterfeit Abatement (AGMA®) have highlighted a significant financial drain
about which many companies remain unaware: abuse of warranty and product support entitlements (“warranty service abuse” or “entitlement abuse”).

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