Ingram Micro in refurbished products

CMP Channel

Ingram Micro (NYSE:IM) is expanding its business in discontinued and refurbished products to the United States.
The Santa Ana, Calif.-based distributor has sold similar products in Canada for about three and a half years and sees a big opportunity in the United States, through its Ingram Micro Outlet unit, said Tim Billing, vice president of North America retail and Internet sales.

"The whole concept of the program's success in Canada has been driven by both the supply in the marketplace of discontinued products and significant demand for that type of technology," Billing said. He would not divulge how big the discontinued/refurbished business is in Canada.

Ingram Micro Outlet will be available to about 1,000 vendor partners in the United States. The distributor expects top sellers to include notebooks, peripherals and potentially desktops, he said. There's also opportunity around consumer electronics, particularly for LCD and plasma displays, he added.

Most of the products will come directly from manufacturers, but some could come from other channels, Billing said. All the products, however, will be certified by the vendors and include original manufacturer warranties, he said.

"We have a very strict approval process on all deals. Our vendor management organization reviews all purchases. We will engage all our vendor partners and work collaboratively with them to ensure there are no issues with purchaes," Billing said. "If any vendor has any issues with the source or legitimacy of the product, we will not participate in those deals. These are 100 percent vendor-approved purchases."

Ingram Micro would not detail pricing discounts on the suggested retail price. Billing said discounts would depend on the product and its life cycle.

"It's a tough question to answer. Savings and discounts are significant enough that there's demand in the marketplace. Look at a notebook. You probably don't need to discount a large percentage to make it attractive in the marketplace," he said.

Billing also wouldn't characterize a typical solution provider or customer that might be attracted to the program.

"From a business perspective, there are a lot of solution providers out there that have a need for this technology. A lot of products today have a short life, but they still meet the needs of many businesses today," he said. "Plasma TVs might be recently discontinued but still available at a competitive price. There's a significant market opportunity."

Some functions that were in Ingram Micro Outlet, such as asset disposition, will be transitioned to the recently announced services organization led by Justin Crotty.