Matt Anthes-Washburn, a software developer in Beaverton, Oregon, keeps an eye out for new technology and sells off older models to help cover the replacement costs.
"I tend to have turnover of my devices, and so a good way to keep on the train is whenever I replace a device I sell it, instead of having it in a drawer somewhere," Anthes-Washburn said in a telephone interview.
At one point, he'd used eBay, the global online auction marketplace: "You get a good price, but it's a hassle," he explained. "First you have to create a listing, which is a lot of work, and then you really have to provide (tech) support to the buyer, (such as) 'How do I connect this to a carrier?' "
Anthes-Washburn is not alone looking for the most efficient way to unload electronic devices every time the next big thing hits the market. The demand has created a market for third-party brokers who have been doing brisk business helping consumers churn through cell phones, tablets, video game consoles and other devices.
Last week's release of Apple Inc.'s new iPhone 6 and 6 Plus — resulting in 10 million units sold the first weekend — was the latest opportunity for this growing market of used electronics. Next month, Apple is rumored to have new iPad tablets ready for launch, potentially sparking another trade-up frenzy.
To be sure, business at eBay has been healthy as consumers auction off their new and recent iPhone models, said spokeswoman Kari Ramirez.
The site sold nearly 652 iPhones an hour during the launch weekend, she said.
"We expect to see more people continue to sell as they upgrade to the iPhone 6," she added, "and eBay remains the best option to sell your previous generation device or 'flip' your recently acquired 6 or 6 Plus."
Third-party options
Still, users such as Anthes-Washburn prefer other options. And the third-party firms distinguish themselves in finding creative ways to simplify the process of valuing, buying and brokering the sale of used devices in exchange for a cut of the proceeds.
For Anthes-Washburn, he perfers Glyde, an online broker based in Menlo Park, California, through which he has sold six phones and tablets in the past two years.
He said Glyde hits a "sweet spot" between selling on eBay and dealing the lowball offers from some we-buy-your-tech companies. "Glyde is less hassle and you get a fair price for your device. I've posted devices for sale from the couch with three or for taps of my thumb," he said.
Matthew Reardon, a Glyde marketing manager, said the company differs from some competitors because it is a "peer-to-peer marketplace." Glyde, which started in 2009 selling used videogames, books and DVDs, entered the consumer electronics arena in 2011. Reardon said last weekend was the firm's third iPhone launch sales event.
"We processed triple the amount of 'Sell iPhone' offers this September versus last September," he said. "There's been a huge interest in the iPhone 6, and a lot of upgrade interest from Android (phone users)."
Reardon explained that, based on information submitted by a seller, Glyde's software algorithms will suggest a price for a given device, advertise it and send the seller the packaging to ship the device, prepaid, to the buyer. The buyer has 48 hours to accept the purchase or return the device. If the sale goes through, Glyde processes a pre-authorized sale on the buyer's credit card and releases payment to the seller.
Anthes-Washburn said he was offered $300 for an iPhone 5s — last year's model — by a Verizon store, but sold it for $380 on Glyde. The broker's cut was $34.40 — a 12 percent commission on the first $100 of a sale price and 8 percent of the balance.
'Immediate gratification'
Other sellers prefer immediate payment, and for them, Massachusetts-based NextWorth offers two kinds of service: a mail-in direct sale and branded kiosks at stores such as Target and Wireless Zone, where you can walk in with a phone and walk out with cash or credit for a new device.
"In-store, you get what you're quoted. (It's) immediate gratification," said chief marketing officer Jeff Trachsel. For online sellers, he said, the firm tries "to be as objective as possible in the questions we ask, and we try not to ask too many questions" to determine a device's worth.
Still, he said, in about 10 percent of the cases of phones sent to NextWorth, the device isn't as described — such as the person who believed they had an iPhone 4, but it was the later 4s model. But NextWorth reconciles such discrepancies by contacting a seller to explain why a lower price might be offered for a damaged phone or by paying the higher price for the later model, Trachsel said.
He said the firm's in-store business is a lot bigger than online and superior because it takes the guesswork out of selling. "By and large, the prices are comparable," between the two methods, but not always equivalent, he added.
Gazelle, a leading online buyer of devices, has been in the field since 2009, said Alyssa Voorhis, the firm's senior tech analyst.
In that time, she said, "we’ve accepted more than 2 million devices from (over) 1 million customers and have paid out nearly $200 million for old and unwanted devices." Once a device's information is submitted via an online form, sellers receive an offer, which Voorhis said is good for 30 days. Once the device is received, a seller can be paid via check, the PayPal.com service or with store credit at Amazon.com, which adds 5 percent of the sale price to the credit amount, she said.
Security protections
Security is also a concern for sellers and the intermediaries.
Anthes-Washburn says he removes personal information and programs from devices before selling them, a practice known as "wiping" a phone clean. Android users, Cnet.com reports, can follow a three-step process to eliminate personal data from their phones; iPhone users have several ways of doing the same thing, an Apple technical note states.
Gazelle's Voorhis said the company will remove the seller's data for free "to ensure personal data is kept secure, and through a partnership with (device registry) CheckMEND, we prevent thieves from profiting from stolen devices."
The 2015 advent of kill switches for cell phones from Apple, Google, Microsoft and Samsung is also designed to deter thieves.
The "kill switch," which actually is a software control from a centralized server and not a physical switch on the phone itself, could be invoked by a user when they discover their phone is lost or missing. The server would disable the device and remove personal data, rendering the phone unusable and, therefore, worthless to resell.
