Describe the nature and purpose of the business.
The proposed service is an eRecycling Management solution that would collect electronic waste from customers processed through an ecommerce platform and aggregates the electronic waste and sends it to electronic waste processing centers in United States. The types of electronic waste processed would be computers, mobiles, televisions and other electronic goods that have a silicon substrate that can be recycled and provide a minimal silicon yield, sufficient to balance the cost of logistics from individual customers and aggregation centers.
The block diagram below shows the business model of the proposed venture in brief process steps. The customer places a request for pickup of used electronic items along with the OEM make, Model Specifications etc. The specifications would be matched with an existing catalogue of products and an assessable value is generated manually. The firm would then arrange for pickup of the scrap based on a pre-scheduled collection schedule based on the area. The customer gets paid based on the assessable value in the catalogue on the eCommerce platform. The picked material is sent by collection vehicles to an aggregation centre for further sorting to match waste of similar yields. The classified waste is then sent to third party eWaste processing centers through a 3PL logistics player and the firm is paid on the assessable value of the total waste dispatched.
What competitive advantage would it have as an e-business? That is what advantage would it have for customers, or as a means of greater efficiency, etc?
Electronic waste disposal is a topic of significant interest in a developed and responsible economy such as the United States. With newer regulations on waste disposal and increased awareness of proper waste management techniques, the firm would leverage the amount of electronic waste in a high per-capita consumption economy such as the United States. Decreasing product life cycles, increasing discretionary spending and a wide spectrum of technology options have made increasing contribution to electronic waste in the united states while also posing a significant problem of the management of the waste. The proposed firm is very well suited to leverage the growing challenge of electronic waste management.
Consumers are also growing conscious of the need to dispose electronic waste in a timely and easy manner. The proposed service would be a hassle-free process where the customers would find it a one-stop solution for disposing their used electronic equipments through an electronic channel.
What or who would be the main competition, if any? Why?
With electronic equipment costs increasing due to high input costs and sophisticated technologies, the customer spend are higher. The major competitors are players who can be a market or a medium to reach a market for used electronic goods. There exists a large used electronics market in the United States. Also the second hand market is enabled through major eCommerce channels like eBay.
The other source of competition would be the OEM manufacturers who resort to sales promotional activities including exchange and buyback schemes. These channels not only find a better resale value for the used electronic equipment, they also serve an easier platform to transact over the internet or directly.
What is the potential target market for the product (goods or services) of this business, in terms of the types of customers and annual revenues?
The potential target market for the proposed service is users of high end electronic goods in the United States who are both environmental conscious and are eCommerce-savvy. United States has a mobile concentration of 85% and a television penetration of nearly over 95% households. And the demand for newer technologies increase with the passing days, the churn of televisions and other electronic equipments are on the rise. The potential market is made of these technology savvy and environmental conscious consumers, who would take the extra initiative to dispose off the eWaste safely.
What are the potential risks of this business? For example, why might customers not want the product or service?
The business model is based on the premise of economical collection of electronic waste and the yield from the used electronic substrates in these devices. Consequently, there lies a significant risk in the efficiency of the reverse logistics from the customers to the aggregation centers and further back to the processing plants. Since this is an introductory service, demand is likely to be volatile making it difficult to plan appropriate logistics. Poor logistics planning can result in significant cost escalations putting inflationary pressures on the fledgling business’ expenses. Also with increasing cost of fuel, the sustainability of the business need to be evaluated carefully.
The other risk is that of an appropriate method of evaluating possible recyclable yield from the eWaste collected from the customers. Hence a well defined guidance method needs to be in place to divert risk from the business while maintaining a healthy yield ratio necessary to sustain the business.
Another potential risk is the growing amount of frauds in the eCommerce businesses with sophisticated scams including siphoning of money and other hacking activities that may disrupt the operations of the proposed business in its stage of infancy.
It is to be borne in mind since the business model is based on an internet portal and hence barriers to entry are lesser and can attract competition with firms specializing in reverse logistics.