The IT department of any business is generally composed of staid, stoic personas—intellectuals who bury themselves in data repositories, staring down lines of code, acting as stewards for patches and software updates, and constantly rolling their eyes when job tickets float their way from office employees who seem to constantly trip over the same technology issues.
But if there’s one thing that can cause an IT director or manager to break from character and become excited, it’s the subject of buying new equipment or software that can simplify processes or add digital firepower. That usually requires incumbent assets to be retired/decommissioned. Those assets are often placed on a pallet in a back office, wrapped tightly in cellophane. There, they will await a final destination that is often open-ended; sometimes, until that patch of real estate is needed for another priority.
“We’re trying to change that narrative and strategy to be more proactive in how they look at it,” said Brett Apold, vice president of sales for ARCOA Group, based in Waukegan, Illinois, with offices in Wisconsin and Ohio. “There’s still a lot of value in that equipment at the time they take it out of production.”
While that notion may not cause IT types to fan themselves in breathless anticipation, the concept certainly plays well in the C suite. Leveraging value that complements driving sustainability and ensures data security is a talking point that can garner any top executive’s attention. Certainly, the security of client and internal data is of utmost concern to an IT department; still, the dangers of intruders infiltrating legacy equipment or systems transitioning to newer platforms is always a concern, as evidenced by Morgan Stanley’s data compromise discovered earlier this year.
ARCOA Group and its Electronics Recycling-as-a-Service (ERaaS) platform offers a solution to derive value from retired assets while also enabling dealers to offer their clients a responsible outlet for recycling assets while ensuring critical data does not become compromised. Plus, with the continued movement toward as-a-service value propositions, it equips dealers with yet another tool that rounds out the complete cycle of equipment asset curation.
Launched in 2020, the ERaaS offering was initially focused on managed service providers (MSPs) and value-added resellers (VARs), but ARCOA Group saw an ideal application for office technology dealers looking for additional revenue streams to proliferate within their customer base.
Entry Point
“The nice thing about the ERaaS program is dealers already have the reps on the street with established relationships,” noted Ed Spriegel, president of ARCOA Group. “This program is just an additional sell for the dealers. Schools, hospitals and law firms, along with many other high-compliance businesses, have thousands of devices with significant resale value that can add tens of thousands of dollars in revenue to the dealer. There’s no capital investment on their end; we handle everything behind the scenes. We have a crew that’s fully trained to provide the offering. It’s a win-win for the dealer, customer and ARCOA.”
ARCOA Group
ARCOA (Asset Recycling Company of America), along with Midwest Copier Exchange, are two divisions under the Asset Remarketing Company of America Group holding company. Midwest Copier Exchange was garage- launched in 1989 as an outlet for selling used copiers obtained from lease returns and dealer purchases. In 2008, the company created Midwest Electronics Recycling (later christened ARCOA), followed by ARCOA Logistics a year later, which led to the creation of ARCOA Group in 2013.
Miller Electronics Recycling, a Milwaukee-area business, was added in 2013 as ARCOA Group Wisconsin, and ARCOA Group Ohio, which operates in Akron, came online at the beginning of this year. Corporate and sales functions are based at the Waukegan headquarters with a separate facility in the same city for recycling operations.
Adding electronics recycling was a natural progression for ARCOA Group, according to Apold, and he feels the ERaaS initiative will leverage the ARCOA and Midwest Copiers Exchange brands to create synergies that will catapult the business to the next level. Asset recycling has long been a transactional opportunity, and ERaaS is poised to be a catalyst in getting dealer end-user clients to look at IT asset disposition in a more productive and profitable manner.
“By seeking out the value of the equipment, there’s a revenue share aspect in addition to properly recycling retired assets,” Apold said. “The as-a-service model falls into the dealer’s wheelhouse, and we see this as a great opportunity for them moving forward.”
Service and Remarketing
ARCOA Group provides white-glove packaging of the end-user’s equipment and transportation through its logistics services. The company also offers equipment auditing for makes, models and serial numbers for assets, providing detailed information on condition and value for retired assets. In addition to remarketing copiers, Midwest Copier Exchange provides storage services for dealers who convert clients prior to lease expiration and need temporary accommodations for the incumbent equipment. Its logistics division can also transport off-lease equipment for dealer customers that are moving, offering installation and set-up services.
The pandemic had a significant impact on the secondary market, according to Spriegel. While Midwest Copiers Exchange saw incoming equipment slow to a trickle during the initial months, demand in the export markets remained strong. For ARCOA the demand for laptops and Chromebooks exploded as workers transitioned to home offices. That created a shortfall in supplies, juicing prices and forcing many buyers to turn to the secondary market, enabling the company to enjoy a strong 2020.
As employees gradually return to the office, Apold believes that should trigger a strong volume of incoming IT equipment due to refreshes over the next three years. That enthusiasm is tempered on the copier side with the continued warnings from manufacturers and reseller partners that the semiconductor chip shortage will soon impact deliveries of new units.
“New machines won’t be able to be delivered because of the shortage, so returns will drop as a result,” Spriegel said. “We’re expecting that to be a six-month window, maybe longer. So there might be a long-term downside.”
In addition to leveraging value from retired assets, Apold underscores the value in working with a company certified for electronics recycling. “Too often, we hear of companies who use a service that is not certified to pick up their equipment,” he said. “While they might not get charged for the service, they’re also not getting any funds back. Also, you don’t know where that equipment is going to end up, which is not a comforting thought. As a company that is R2 certified by SERI (Sustainable Recycling International), ARCOA is third-party audited each year. It ensures none of those assets end up in a landfill, or anywhere else that it should not be. Many medium to large businesses require a certified recycler as they understand the value and protection they provide.”
Spreading the Gospel
During the course of its 30-year journey, ARCOA Group has forged strong relationships with leasing companies, banks, manufacturers and dealers. Building off that foundation will be the key to continued growth, and Apold will be looking to bolster the company’s marketing efforts in part on the strength of a corporate website refresh. The initiative, scheduled for completion in 2022, will be content driven, and ARCOA Group is building up a repository that will feed the new site.
“That’s a key component of the educational aspect we’re driving, making sure people understand the value of sustainability and data protection in addition to emphasizing the resale potential on assets,” he said.
ARCOA Group has also joined the Consortium, the imaging channel think tank that was launched by industry consultant Mike Stramaglio. This group of industry leaders was created to help spur growth and prosperity within the channel and drive digital transformation. Apold also notes ARCOA Group has experienced great traction at the recent Business Technology Association (BTA) event. Having a booth at the BTA National this past summer provided a great platform for ARCOA to engage dealers on the value of ERaaS and the ease/value of doing business with them.
“We want to be more visible in the marketplace,” Spriegel said. “In the past, we’ve done the ITEX show and BTA National; going forward, we’re going to try to attend every show available that caters to the dealer channel. It’s not just educating them on the revenue and service side, but also the value in crafting three-year lease terms instead of five. The value that would be realized on equipment at three years is substantial enough to warrant that type of thinking.”
Looking at 2022 and beyond, ARCOA Group is seeking to expand out west and into the southeast, which will also create greater efficiencies for its logistics division. Spriegel wouldn’t rule out acquiring existing firms to further expand the company’s footprint.
“That’s definitely an area we’re exploring, on both sides of the business,” he said. “We feel there’s going to be some opportunities and synergies there. We’re looking at everything at this point.”
