GameStop scores with used-gear sales
GRAPEVINE, Texas — Inside the ROC, the heartbeat of the consumer electronics industry can be felt.
At one end of the 182,000-square-foot facility, boxes roll in day and night, bringing thousands of video games, gaming consoles, smartphones and tablets sold or traded at GameStop stores across the United States.
At the other end, refurbished Playstation and Xbox gaming consoles are repackaged into boxes and sent on their way, first to a distribution center and then to one of the retailer’s 4,200 U.S. stores for resale.
This is GameStop’s Refurbishment Operations Center (known within the company as the ROC), located in Grapevine, Texas. It’s the core of the company’s highly profitable business of buying and selling used video-game gear, smartphones and other electronic devices.
The volume here is eyepopping. More than a quarter of a million items pass through the center each week, mostly video games that need to run through big buffing machines that resurface the software to remove scratches. Volume increases during peak periods around the holidays, when as many as 350,000 units can come in and the refurbishment center is operating on weekends.
There are banks of gaming consoles being torn down and reassembled before being shipped for a new life. And there’s a growing supply of smartphones, tablets and other electronics items — about 5,000 a week.
Buying and selling used equipment is a huge and growing business for GameStop, generating more than a quarter of its $9 billion in revenue last year and about half its $2.66 billion in gross profit. Customers can either get cash or trade credits in exchange for their equipment.
With the company’s recent addition of two other consumer electronics chains — Spring Mobile and Simply Mac — the volume of mobile products being “recommerced” is expected to grow about 10 to 12 percent a year, said Ram Krishnamurthy, senior director of mobile/consumer electronics. The company is considering expanding into other devices such as wearables and smart thermostats.
The refurbishment center is basically a huge re-manufacturing facility.
“Most of this stuff is made in Asia, but we bring it back to life in the United States,” said Bruce Kulp, GameStop’s senior vice president of supply chain and product refurbishment.
Much of the equipment sold or traded at GameStop stores needs some cleanup or repair before it can be resold. So it is sent to the refurbishment center, where 1,200 employees work each week over two shifts to process, repair and repackage the old electronics equipment for new users.
Each smartphone, tablet or other mobile device is processed and goes through a multistep process to ensure that all personal data has been removed. Once through that process, devices that need repairs — such as a cracked iPhone screen or bad sound quality on a media player — are sent to a bank of trained technicians, who will either make the repair or scrap the device and harvest its parts for recycling.
The average pay for workers here is about $12.50 per hour, with the plant’s 300 technicians, who are trained in repair and refurbishment, making more.
GameStop also operates refurbishment centers in Canada, Europe and Australia to serve its overseas operations.