The secondary IT markets in Asia and Europe have for years been the primary focus of North American reverse logistics companies seeking to expand their service footprint.
Established and stable, those markets have offered fertile grounds for growth, leaving companies with little incentive to look across the southern U.S. border into Latin America.
But that dynamic is rapidly changing. As the use of consumer electronics has exploded, so has the need for multinational companies to part with large volumes of obsolete equipment in an environmentally responsible manner in all regions of the world. Need is, in other words, driving the expansion of global remarketing in the all-important geography of Latin America.
So, what does it take to be successful in this relatively overlooked region? It all comes down to deep market knowledge and an unwavering focus on process and procedure.
Overcoming a web of barriers
There is no question remarketing assets in Latin America brings a host of complexities. A lack of understanding of the language and culture can alone present significant obstacles.
The web of regulatory frameworks also adds layers of complexity that can be difficult to decipher for newcomers. Take the transportation, storage and recycling of batteries, for example; each country features its own set of rules. The same goes for labor laws, background checks, asset handling requirements and more.
In addition, different forces fuel market demand in different countries, down to the local level, underscoring the need to create multiple location-specific remarketing strategies. Add a wide range of political structures – from liberal to conservative, from organized to chaotic – and it is not surprising organizations with little or no experience in navigating such market conditions have been apprehensive to dive in.
Still, as a growing number of North American organizations can attest, buoyant secondary markets in Latin America offer unprecedented opportunity to manage growing volumes of end-of-life assets in a swift, environmentally compliant and financially sensible manner – when you leverage the right expertise. The economic opportunities for all Latin Americans, regardless of income, continue to expand, permitting the consumer electronic market to grow.
I’ve seen this growth firsthand during my travels throughout the region over the past 30 years. As technological advancements including cloud computing and the internet of things (IoT) have penetrated into the far corners of countries such as Peru and Colombia, demand for asset management has grown. The market expansion is driven by the inevitable need to replace malfunctioning devices and the desire among businesses and consumers to upgrade to newer and better technologies.
A sound strategy is step number one
I often caution that an off-the-cuff approach to remarketing and responsible recycling in Latin America is doomed to fail.
For those that seek to establish themselves without the help of a knowledgeable third-party provider in the region, I highly recommend a gradual approach.
Gain a full understanding of the legal and environmental requirements in a single country and use that as the baseline for your expansion. Make yourself the resident expert before you proceed. Verify and validate key differences between countries. Can you use the same solution for recycling, or are you facing a brand-new set of regulations?
In essence, your entire business model must be built around the limitations and benefits of each market.
More than anything, strict adherence to international regulatory standards is of utmost importance. ISO- and R2-certified processing centers offer proof of an organization that, at every turn, complies with the highest standards for data destruction, environmentally responsible recycling, and worker health and safety. Such certifications cannot be attained by paying lip service to process and procedure. You have to live it, every day.
In a complex political and regulatory environment, the certifications take on even more significance, lending an internationally recognized level of process and procedure to your operations.
Latin America’s secondary markets are worth exploring. Find out if it’s a good fit for your organization, and then proceed in a systematic and measured manner. Those who do their research and work in alignment with recognized standards can expect to see revenues rise as they expand to the south.
Luis Yepez is the chief operating officer at Mainstream Global, an ITAD service provider based in Lawrence, Mass. with additional owned and operated ISO/R2-certified processing centers in Argentina, Brazil, Chile, Colombia and Peru. Another location is coming soon to Mexico. He can be contacted at [email protected]
This article originally appeared in the Fall 2019 issue of E-Scrap News. Subscribe today for access to all print content.