Trust us. Phone refurbishment is going to be huge

Aaron Chatterley, who founded Feelunique 16 years ago, has never felt as excited about starting up another business. Until now. The Jersey-based entrepreneur and colleague Jean-Paul Bouic talk to Ian Heath about refurbished-smartphone sales site Swycha

These days smartphones are part of everyday life for the vast majority of us. But are they affordable? Are too many outdated models easily discarded? Could we be more eco-friendly in how we use devices.

Aaron Chatterley and Jean-Paul Bouic think they have the answers to those questions in the shape of Swycha – a new website where you can buy refurbished and restored second-hand phones.

Well known for his work establishing online beauty product store Feelunique, Mr Chatterley explained it took what he viewed as a ‘massive opportunity’ to launch a similarly ambitious ecommerce venture, which he thinks is entering a game-changing market.

‘I’m still quite involved with Feelunique but I’m no longer on the management team. An amount of times over the last four or five years, since I stepped down, I’ve been asked what are you going to do next? Are you going to start another business?

‘The answer’s always been no because of two reasons. The first is that when we started Feelunique we were really hungry and that’s a brilliant motivator. The second one was that the catalyst for starting Feelunique was there was this massive degree of excitement about the opportunity. Nothing else has ever really come along that’s made me think yeah, that’s something that we can really get our teeth into and the potential is so massive. Until this,’ he said.

Swycha came into being about 18 months ago with the website launching last month. It offers refurbished phones, at a discount price, which have buffed screens, have been rigorously checked and have a 12-month warranty.

Plans are in place for app-based trade-in system to be launched in the coming months to enable customers to part-exchange their existing phones for a Swycha refurb.

‘When we were first approached with the idea, I wasn’t really that aware of just how big the refurbished phone market is. Something like 114 million refurbished smartphones were sold in Europe alone last year. It’s actually massive business and a massive growth area.

‘I’ve got small kids, who are 12 years old, and are at that age where they are getting their first smartphones. Are you going to spend £1,000 buying them a brand-new iPhone or £200 or £300 buying them a refurbished phone? An iPhone 8 does exactly the same job as an iPhone 12, it’s just the camera is not as good.

‘Even for businesses that employ large numbers of businesses and you’re responsible for buying smartphones there’s just so much potential. There’s so many people don’t have the budget to spend £1,000 on a smartphone.’

The idea is being backed by Faction, a consortium of Jersey-based ecommerce and tech businessmen, including Mr Chatterley, Dave Edwards, Richard Goulding, Karl Moss and Richard Schiessl.

‘We’d all been involved in different projects over the last four or five years where we’ve invested in independently in different businesses, sometimes co-invested as a group or with others. And we decided to formalize it last year and create an investment vehicle called Faction.

‘Swycha actually started life about 18 months ago. A good friend of mine has a business that buys refurbished phones internationally. They buy them at auctions and they go on an extensive refurbishment process. He moved to Jersey from the UK a few years ago and wanted to get involved with something locally.

‘He came to me and said that they have a presence in the refurbished phone market but don’t sell directly to the consumer. He asked if we might be interested in a joint venture. Our partner has access to all the inventory stock and then we provide the retail piece.

‘We’re creating a team. We’ve recruited JP [Bouic], who started at the beginning of June. We’ve got a new chief executive who starts in September, and then we slowly recruit to build that team around that.’

Mr Bouic, who has taken over as general manager of the fledgling business, explained that he formed a working relationship with Mr Chatterley when he worked for Feelunique for four years.

He said he was initially sceptical about the idea before quickly seeing the opportunities.

‘Aaron just came up to me at the beginning of the year and told me about it. When he mentioned refurbished phones, I was like: no chance it’s such a big market. I thought as a newcomer, it would be impossible, but then the supply chain company was already there. We know the volume of sales going out, so it’s just ensuring that, with all our learnings on ecommerce over the last 15 to 20 years, we set everything up as it should be.

‘We’re building up traffic organically on the website at the moment and trying to get the word out. Trust is a big thing with the refurbished market and the research that we’ve been looking at says that many people aren’t even aware of the fact that you can go and buy a refurbished phone, so there is a big opportunity there. The majority of people still just think my handset’s gone, so I’ll go and see my telco provider and just get another phone.’

Mr Chatterley said that another attraction of Swycha for him was the environmentally-friendly aspect of recycling phone cases. He added that this was becoming big business in an increasingly eco-conscious world.

‘If you think about the amount of wastage with mobile phones and then there’s the mining for the batteries. We keep them for a year and they end up in landfill or somewhere worse.

‘The fact is that the market for the people seeking refurbished phones is growing exponentially. But there are only a handful of places where right now you could go to get one.

‘When we launched Feelunique, the idea of buying beauty products online was in its infancy. What we figured was there’s a huge opportunity to create something pretty substantial. I think where we’re at with refurbished phones, smart phones, and ultimately a much wider variety of refurbished connected devices, is up for grabs right now.

‘We’ve launched with refurbished iPhones and will be rolling out to Samsung over the coming months and hopefully other device manufacturers as well. Longer term we’ll look at tablets, possibly consoles and anything that’s built with the ability to have a second life.’

He added a key challenge for the business would be building up trust with its customer base.

‘There’s a couple of European websites that do similar to us, which don’t really have a massive presence in the UK. Then there are marketplaces like eBay and Amazon, but they tend to be small, independent resellers and they could be literally anybody that’s selling you the phone. There’s a degree of risk with that compared to the idea of building a trusted destination where you know that the phone’s been through a whole bunch of checks and meets certain criteria.

‘It does take a long time to build up that trust and reassurance. We know that from Feelunique. It’s not something that happens overnight and probably our biggest challenge is creating awareness and that degree of trust. As great as the website might be and as good as the prices are, it does take time to build that up.’

When it came to a choice of jurisdiction for the enterprise, Mr Chatterley said he wanted to do it in his home – Jersey.

‘We could have easily got a team of people in London but we want to build something Jersey-centric, with the team over here, running it. The fulfilment centre is in Bournemouth because that just makes logistical sense. Ultimately, we have to offer next-day delivery, possibly same day, and that’s just not feasible from Jersey. But for everything else there’s no reason why the bulk of our operation can’t be over here.’

Both he and Mr Bouic said that the Island’s digital talent pool is now flourishing, and credited efforts in recent years to bolster the skills base here.

‘Having the Digital Jersey Skills Academy actually makes a big difference because they are bringing out maybe 25 kids every year with degree level qualifications in a broad spectrum of digital services, whether it’s social media, digital marketing or coding.

‘16 years ago, us, Play.com, maybe one or two others, were the only people that needed real digital skills and we provided an alternative for people who didn’t want to go into finance. Now every business needs those skills. If we didn’t upskill, then the Island would be facing a massive skills crisis, and we still could. The fact that we’re bringing homegrown talent through now is great and without that it would make starting this sort of thing very difficult,’ said Mr Chatterley.

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