Creating a MarketPlace within an Operator

8 August 2018

Dear Network Operators,

In my last post, I wrote about the 5 benefits of MarketPlace. In that post, I promised a follow up about obtaining real-life valuations on surplus equipment.

Well, here goes. What’s more “real life” than obtaining maximum redeployment value for the equipment within your own group? MarketPlace has already saved global operators millions each year by redeploying already owned assets vs. buying new from the OEM. In recent months we have signed up a global operator into the Shields MarketPlace software and the results are stunning. Grab a chair, sit down and read on.

In summary, the operator is making use of parts from their swapped mature networks and redeploying those parts around their global footprint using Shields MarketPlace.

How does it work?

  • Equipment is visible and identified on the Shields MarketPlace tool. The software facilitates the visibility and the transaction.
  • Equipment is added to the basket and goes through the account manager to quote lead times and any service charges.
  • The equipment is then picked, tested and dispatched by the Shields dedicated fulfillment
  • Equipment is provided with a minimum 1-year warranty and shipped under strict quality control.
  • Shields handle all import/export clearance and necessary licenses. We do the paperwork.  


Pictures of a recent Shields MarketPlace movement from the UK to Africa.

Commercial Reality

In the real-world cases we have been involved with to date, the following holds true:

  • 72% of equipment required for Spares and/or Expansion can be found within the same group operator’s spare inventory (why buy it, if you already own it?)
  • 65% savings achieved compared to the OEM catalog price when equipment set at FMV (Fair Market Value)
  • Of the FMV set, a high % goes back to the supplying group operating company! Win, Win, Win.

Example

  • Operator X and Operator Y are part of the same Group.
  • Operator Y needs to buy parts to support their network.
  • Within Shields Marketplace, Operator Y sees the parts available from Operator X (same Group).
  • Operator Y enquires and is told that they can be transferred at a Fair Market Value (FMV) of $250k.
  • Shields hold the assets of Operator X under consignment and share the revenues.
  • The transaction moves ahead, with the following end results:
    • Operator Y saves 75% of the OEM price ($1m-$250k) = $750/$1m
    • Operator X receives value for the assets $150k ($250k x 60%)
    • OEM net transaction cost for the Group of $1m is avoided.
    • Instead, the Group has a net transaction cost of $100k (250k x 40%).
    • Effective OEM saving for the Group of 90%.

Normally things that sound too good to be true, are too good to be true. But not in this case. We have achieved the above in the real world.

If you work as part of a global operator and would like to discuss how we can achieve savings of up to 90% OEM prices, please click HERE.

Sincerely, 

Daniel Jones

CEO

Shields Environmental