Synnex Deal With Circular Computing Makes Partners, Planet Greener

Synnex said it is selling remanufactured PCs from Circular Computing that are often hard to distinguish from new devices, giving margin opportunity to partners and some carbon-footprint margins to Mother Nature, the company said.

“Stock comes out of lease returns and if anybody wipes it over, cleans it a bit, toothbrushes it, or grades it, that typically could be described as refurbished,” said Rod Neale, founder and CEO of Circular Computing. “What we do is we tear the product apart into its component level and we will completely remanufacture the stock to where you could typically put it in somebody’s hands and their first reaction is, ‘Yeah, this is brand-new isn’t it?’ That’s my company’s goal.”

Steve Heslop, vice president of the PC wholesale division at Synnex, said Synnex was excited to land Circular Computing since he says that while a number of companies sell refurbished, it is the only company creating a truly remanufactured product.

“I think it was really the impact on the environment that we fell in love with,” Heslop said. “The CO2 emissions we save, the minerals and metals, and the fact that we’re planting trees, it was the whole story. Instead of just selling the refurbished product we’re selling today, we’d prefer to sell a high-quality remanufactured product that also does great things for the environment.”

Circular Computing said it plants five trees for every device sold and features a map on its website showing where the trees are planted and the local nurseries where the trees are purchased. The laptops sold through Synnex will result in trees being planted in California as part of a joint reforestation effort there. The company said it does this in addition to adhering to more environmentally friendly manufacturing processes to make each of its laptops as carbon-neutral as possible.

Heslop said in addition to being good for the environment, the PCs are also good for business. Price, depending on the model, is less than new but more than traditionally refurbished. Each device comes with a three-year warranty.

“I believe the margin opportunity on this is 10 [percent] to 12 percent,” he said. “Resellers are out there competing for very thin margins on hardware—this gives them an alternative where they can really make some margin.”

Heslop said Synnex is recruiting 50 partners to sell Circular Computing laptops, which gives them a great product, backed up by warranty, better margins, and they can help the environment.

“There’s great excitement with the sales force because they know they’re delivering a product to a customer that is not going to be questioned after delivery,” Heslop said. “A three-year warranty is very unusual in this channel. It’s typically a 90-day to one-year at most. When Circular backs this with a three-year warranty, it makes us extremely comfortable with the quality.”

Neale said the company employs 250 workers who spend between five and six hours to strip the laptops down and rebuilds them in its purpose built remanufacturing facility based in the UAE.

“Our goal is to allow the end-user customer not to make any compromise at all,” Neale said. “That would be how we would class a remanufactured product.”

Neale said the products that will move through Synnex are fourth generation, which typically is a three- to four-year-old product that was used in an enterprise environment.

A series of benchmark tests at Cranfield University showed 10 Circular PCs performed nearly as well as 10 new PCs while running the same applications, Neale said.

“We asked Cranfield, ‘OK, in real-world terms, can you make a judgement between those new ones and our product?’ “ Neale said. “We had a thesis come out, and the net result, the marketing version of that is that in real live terms our product performs 97 percent as well as a brand-new product. Because if me and you are on the train and you have a new product and I’m sitting next to you, essentially what we’re doing today is we’re doing Word. We’re checking our email. We’re not doing quantum physics.”