Why Asset Recovery?
There are many benefits of implementing asset recovery:
Direct cash flow will be generated through the sale of assets, usually between 1% and 40% of the original purchase price.
- Based on our experience with other companies, we generate on average over $50/ft2 of obsolete or excess equipment.
- Resale value on equipment depreciates at a rate of approximately 5% per month. This varies based on the age and type of technology. In any case, when you hang onto equipment you no longer need, there is a significant opportunity cost.
- Changes in regulation can affect resale value.
Indirect financial gains will be reaped through space savings, labor cost savings, depreciation expense, etc.
- For example, for equipment that is stored in a warehouse, warehousing (including overhead and labour) on average have an associated cost of $5/ft2/month.
Ex. 1 skid sitting in a warehouse = $80/month or $960/year!
- For equipment that is stored in a hub site, the average cost is over $500/ft2/month.
Ex. 1 skid sitting in a hub site = $8000/month or $96,000/year!
Space will be freed up where the equipment was stored, while money will be saved through needing less space overall in the headends and warehouses to store equipment.
Corporate social responsibility
A socially and environmentally ethical practice, asset recovery means a company manages its equipment more efficiently. By finding an appropriate home for the equipment, less ends up in the garbage. In some cases, educational institutions can benefit through donation of unusable gear.