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Cell Phone Need Replacing or Upgrading? Try EBayAug 16, 2006 LOS ANGELES (MarketWatch) -- You're in the middle of a two-year cell-phone plan. You lost your cell phone or it fell into the neighbor's swimming pool. Or maybe it's just time for a change. You like the look and feel of a Motorola V3 Razr. You go to your friendly cell-phone dealer. Instant sticker shock. Four hundred dollars for an integrated circuit and a battery with a cool plastic case and a few buttons on it. Yuck. Are there alternatives? You bet. Lost your phone? You crawl back to the dealer for a replacement. It's hundreds of dollars just to replace that little cheapie you got for "free" when you signed up for your plan. Even more if you had a fancy one, one of those with the high-resolution camera, Bluetooth, MP3, video, international capability -- you name it. It's an awful feeling. What do you do? Enter eBay. Now, it isn't news that eBay is great for getting all kinds of used goodies cheap. EBay brings buyers and sellers together for all kinds of merchandise, from priceless collectibles to ordinary household items to pieces and parts of almost anything. But more and more -- and you active eBay users have all seen it -- eBay is becoming a low-overhead electronic "mall" for a new breed of retailer. These retailers focus on individual merchandise categories -- such as cell phones -- and make markets for products in these categories. Most of these retailers are small "mom-and-pop" operations as you would expect. But some aren't so small. Manufacturers themselves -- sometimes in disguise -- have learned to use eBay to sell their refurbished units. Low overhead, refurbished merchandise, and in many cases, competitive bidding. Bottom line: You can get a great deal. You can get an upgraded replacement for just under half the retail price. Here's the rest of the story. A land of plentyWhen my friend lost his phone, he decided he wanted a new Motorola V3 Razr for a replacement. So I searched on "Motorola V3" and turned up some 38,000 entries. Holy cow! Quickly I realized that most of these entries were for accessories, not the phones themselves. OK, that's good to know. I'll never spend $30 to buy a replacement charger again. I refined my search to "Motorola V3 phone" ("Motorola V3 handset" also works but brings back fewer results). Several hundred to choose from. Prices from $40 or $50 with bidding to $120 to maybe $200 for a "Buy It Now" price. Better than $400 from a dealer and almost $300 from my warehouse club. But now the sledding gets tougher. The terminology quickly overwhelmed me. Locked, unlocked, CDMA, TDMA, GSM, SIM card -- how do you choose? Will the phone work with the carrier? How do I find out? More on that in a minute.... Expensive technology at low prices? How?Savvy buyer advice comes in the form of many clichés. "Caveat emptor" and "you get what you pay for" and "if it seems too good to be true, it probably is" rang loudly. Natural well-founded fear surrounds buying anything expensive or complicated, sight-unseen, seller-unseen, relying on a few pictures and some technical gobbledygook. When buying something like this, I've found it's worth stepping back to understand where the merchandise comes from. So many sellers selling V3's at good prices -- they must get them somewhere! I asked around. Scott Bobo of San Jose, Calf., a consumer electronics engineer and expert, explained a few things. "For consumer electronics, the technology curve is so steep that 6 months after a manufacturer releases something, a new version is out. Often they overbuild because high volume drives down production costs. They have to do something with this inventory." I remembered something else. When I signed up for my cell plan, I was given 30 days to return my handset for an upgrade, no questions asked. I didn't, but later asked my dealer, out of curiosity, what happens to these phones. "We can't sell them as new, so we use them as service replacements, and sometimes they get resold as used." Bobo confirmed the amounts of product that manufacturers take back. "Between what they overbuild and what they take back, there are a lot of units out there. Motorola just introduced the V3i, a new version with MP3 and improved wireless connectivity features. I'll bet that a lot of corporate users are upgrading their phones as we speak, pushing a lot of V3's back into the pipeline." "These eBay dealers acquire this inventory for good prices and resell it. It's mostly good-to-go and is often checked out by the manufacturer. By the way, you can buy a lot of other things besides cell phones this way -- PCs, video cards, PDAs, even unopened packaged software -- especially if you don't need the latest and greatest technology." Do your homeworkThat's great, but I still needed to sort out what to look for -- and what to avoid -- in buying the V3. During my "search" for the lowest retail price for the replacement, I took a look at my warehouse club. Their price, as mentioned, was still too high. But they explained some of the terminology and pitfalls of buying on eBay. Their sales people are not on commission, so they had no need to steer me one way or another. Further, they sell product and plans for all major carriers -- Cingular, T-Mobile, Verizon, Sprint, Nextel -- so they know all the "ropes" of their plans and technologies. I learned a lot about cell phones: which carriers used GSM, TDMA and CDMA technology standards; what it means to be "locked" (programmatically set up to only work with one carrier); and what a SIM card is (GSM only) and why it's important. The bottom line: stick to eBay units branded for your carrier. These units are technically compatible and programmed, ready to go. If you have trouble, you can call the provider directly. Generally, they will help out for free. If you've lost your cell, you'll need a SIM card too (if you were simply upgrading, you could use the old one) -- so make sure the unit you buy is "complete." Long story short, you can shop and buy, picking up a phone for $130 plus a $15.95 shipping/handling fee, as my friend did. The phone arrived 5 days later, and he can now enjoy his new pink V3 Razr. Cool. Pushing the "buy" buttonI may have oversimplified the buying experience just a bit, so let me share some important lessons when buying cell phones, or many other technology products, on eBay. Avoid dealers. Dealers and dealer representatives don't work for carriers (Sprint, Cingular, T-Mobile, etc.) and generally work on commission. They want you to spend $400 on a phone. They don't want you to buy through a "secondary" channel like eBay, and will tell you things to discourage that. Find a noncommissioned sales person (like a warehouse-club rep) or go back to the provider. By the way, I generally recommend warehouse clubs to sign up for new plans -- they're cheaper and are in a better position to help you compare carriers. Buy a phone already set up for your carrier. Otherwise, you'll have to find one "unlocked" or get it unlocked by someone, a sticky process. You may have to pay to get it fully set up for your carrier. If you're a T-Mobile customer, its best to choose a V3 already set up for T-Mobile. There are enough of them out there. Buy from a reputable eBay dealer. This goes for anything bought on eBay: Check seller feedback and look into how much they sell on eBay. Also look for phone numbers, an easy contact path and dealers with a return policy. Make sure all accessories are included. You may need some of them, like the SIM card for GSM phones if you lost yours. A complete accessory set usually suggests minimal use -- and helps avoid stolen units. Watch total cost. For phones, and especially for accessories, some dealers apparently make their profit from shipping charges. I saw accessory chargers for one dollar with a $9.95 shipping fee. Also, find a seller not in your state -- you can usually save sales tax. Consider buying a warranty. SquareTrade Warranty Services, for instance, offers a three-year warranty for $15.99. I don't typically buy warranties, but it might be a good idea if you're not so comfortable with this kind of purchase. If you shop carefully, you can use eBay and similar sites to save hundreds of dollars. It takes some research, but after a while, you'll get good at it like so many others have. It's still no fun to lose a cell phone, but maybe you don't need to grip it as tightly as you once did. |
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