For over a decade, GameStop has worked with B-Stock to sell bulk quantities of trade-in mobile devices, tablets, and wearables through its B2B marketplace GameStop Wholesale. Since its inception, the marketplace has facilitated the sale of tens of millions of devices to business buyers across the globe and allowed GameStop to maximize pricing and volume of sales.
Much of the success of the marketplace can be attributed to consistent grading standards and quality assurance which have historically been done manually. Recently, however, GameStop decided to invest in automated device grading to ensure even better standards for every trade-in device. After partnering with The Phoenix Group the process now combines advanced automated robotics-powered inspection with meticulous manual checks, guaranteeing that every device meets the highest standards before reaching buyers.
To learn more, we sat down with Jon Haes, GameStop’s Vice President and Head of Pre-owned Business, to ask a few questions about this new initiative.
To set the stage, it would be good to learn a bit about how a typical trade-in transaction with GameStop works. How does GameStop initially acquire the devices?
JH: “We acquire devices through our store trade-in program, which captures detailed device information at the point of trade-in. In the store, we conduct manual grading and functional testing to assess the device’s condition. The trade-in value is then provided by our system based on this assessment.”
How is the in-store testing done?
JH: “The in-store testing is comprehensive and consists of over 20 different tests. These include checking the Find My iPhone (FMIP) status, verifying all component connections, and assessing the battery health level. The test results are then stored in our system and linked to the unit’s serial number.”
And what options do customers have for receiving their payouts?
JH: “Customers have the flexibility to choose between receiving cash or store credit for their trade-ins. Store credit value is higher than cash, incentivizing customers to make future purchases with GameStop. This allows customers to select the option that best suits their immediate needs.”
How do the devices get to your central processing facility for the next steps?
JH: “Stores ship to our Refurb Operation Center, also known as the ROC, on a weekly basis. This ensures that devices are efficiently transported to our central processing facility and made available for sale to our customers on B-Stock as soon as possible after trade-in.”
What was GameStop’s grading process like leading up to this new initiative to invest in automation and partner with The Phoenix Group?
JH: “Prior to this new investment in automation, GameStop’s grading and processing relied on manual inspection performed by associates. While we maintained consistent standards, the decision to invest in automation was driven by the need for enhanced consistency and to mitigate the impact of human factors on the quality of the inspection process. Honest mistakes can be made when people are solely performing the grading, like missing a small scratch on a phone screen or missing a small chip on the corner of a tablet. The results from our automated system have shown significant improvements and a positive return on investment.”
How did GameStop first learn about and engage the Phoenix Group?
JH: “We first learned about the Phoenix Group through market research done as we evaluated multiple vendors. We chose Phoenix Group because its services and solutions best aligned with our own business needs and requirements.”
Was GameStop sold on this tech immediately? Was there a pilot program?
JH: “We had previously conducted a pilot program with another vendor, so when we engaged with Phoenix Group, we were already familiar with the technology. Phoenix Group was able to demonstrate its quality effectively during the demo and initial pilot test run, which solidified our decision to move forward with them.”
How are device grades given and recorded?
JH: “During the receiving stage, the system reads and prints the device’s serial number on a sticker, which serves as an indicator for scanning throughout the process. The software also records other device information, including model, IMEI, memory size, FMIP status, device carrier, and carrier blacklist status. This information is stored in the system and linked to the device’s serial number.
At the final station, the system combines the results of functional tests, received device information, and robotic grading. Using our grading table, the system calculates and determines the final grade result for each device.”
What exactly does the robotics system look at when grading devices?
JH: “The robotics system at our production facility is focused solely on cosmetic grading, as we already have a comprehensive testing solution in place at the store level. The robotic grading process identifies scratches, chips and cracks as well as dents and damage to the chassis.”
Does GameStop adhere to an industry-standardized grading system?
JH: “We refer to and compare industry-standard grading criteria, including benchmarks from the market like CTIA and other businesses, to determine our grading standards. While we base our criteria on these standards, we are open and willing to share our grading criteria with our customers.”
Aside from grading, what other tasks are these robots currently handling for GameStop?
JH: “Aside from grading, the robots are currently handling the task of physically cleaning the devices so that they are tidy and sanitized before packing for resale.”
How is GameStop measuring the success of this roll-out?
JH: “We measure the success of this roll-out based on customer feedback and data, which reflect customer retention rates. Additionally, we review our Return Merchandise Authorization (RMA) metrics to assess performance and identify areas for improvement.”
Can you give any figures around how this automation initiative is improving performance?
JH: “One of the key metrics indicating the success of our automation and robotics initiative is the consistency of grading results, which has been highlighted as the top feedback from our customers. This consistency has been crucial in improving overall performance and customer satisfaction.”
What tasks does GameStop hope to automate in the near future?
JH: “We are currently exploring opportunities to further automate our processes to enhance efficiency, including tasks related to packing, sorting, and transportation within the facility. However, any changes will be implemented only if there is a strong business case.”
Where do you see this automation initiative heading in the future, both for GameStop specifically and for the mobile secondary market as a whole?
JH: “For GameStop specifically, we anticipate that the continued development and expansion of our automation and robotics capabilities will lead to even greater efficiencies in our processing operations. This will further enhance the quality of our services and give us an opportunity to expand into additional products.
For the mobile secondary market at large, the adoption of automation and robotics is likely to set new standards for efficiency and accuracy in device grading and processing. This trend may encourage other players in the market to invest in similar technologies, leading to widespread improvements in the overall industry.”
How has the relationship between GameStop and B-Stock shifted more recently? Has this automation initiative affected this partnership at all?
JH: “The automation and robotics initiative has strengthened our partnership with B-Stock by enhancing our processing capabilities and overall efficiency. This alignment allows us to offer more consistent and reliable trade-in solutions, benefiting both our own operations and our partnership. It also opens opportunities for integration between our system and B-Stock’s system, which will enhance accuracy and efficiency throughout the end-to-end process.”
Any last words about GameStop’s operations, mission, goals, or future when it comes to the pre-owned mobile devices on the secondary market?
JH: “We are excited about the advancements we’ve made in this space. Automated robotic grading and device cleaning ensure consistency for our customers. In addition, our partnership with B-Stock allows us to leverage a top-tier platform to drive value back to GameStop when it comes time to resell the product. We see the mobile category as a key growth area for our company and our processing advancements and partnerships in the space provide us a solid foundation that we can continue to lean into to drive the business.”
***
For an inside look at the rigorous multi-point inspection that each device undergoes to ensure precise and reliable grading, watch the video:
To learn more about B-Stock’s B2B resale solutions for trade-in and preowned mobile devices, wearables, and tablets, visit our page for mobile sellers.
