Tuesday, July 25, 2006

Thanks for the Free Money

It's a rare individual who can actually flush a twenty dollar bill down a toilet. Go ahead, try it. I bet you couldn't do it. The reason is that most people don't take the real cash and waste it, they have to convert it into something else that they have an easier time wasting. So, go buy some plastic forks and knives - see how easy they are to throw away? Go buy a magazine, read it a few times, then trash it. There you go, that's 5 or 6 bucks right there. You're doing fine.

How about this one. Go become an IT manager who is responsible for 10,000 desktops. Mandate a two or three year cycle for equipment, then when the cycle comes around just start throwing perfectly good computers in the trash. The working monitors too. Just throw it all away and buy brand new stuff, and when you do it put the latest Wintel operating system on them too, which surprisingly didn't run on your two year old equipment. Sounds Nuts? It's absolutely standard business practice.

Enter Newmarket, a firm that takes all of this gear and then resells it. They just received $50 million in venture capital funding to expand their business. The refurb market is hot, and huge - it's a $1.5 billion dollar business that is growing at 45 percent annually. Just to give you a sense of it, Newmarket processed and resold 1.3 million units last year; Dell alone shipped 37 million.

There's some story about a fool and their money which I'm recalling right now. I'm can't remember how it ends, I think I'll Google it and see.

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