Formulating Second-Hand Market Value as a Function of Product Specifications, Age, and Conditions

Abstract

Second-hand market value is important for manufacturers in that it affects the profitability of both new product sales and end-of-life recovery. To gain a better understanding of second-hand market value, this paper presents an empirical study of buy-back price using laptop computers and mobile phones as examples. A thousand items that were on the market in recent years were examined, and their current buy-back prices were estimated using the pricing engine of a real buy-back company. The statistical analysis provided a model that could assess the value of used products. The model links a product’s specifications to its second-hand market value. It also incorporates the impacts of product age and cosmetic and hardware conditions. Based on the results of the analysis, the design implications for improving the value of used products were discussed.