Launched in April this year, ReGadget is an online service providing cash in return for old electronics, including mobile phones, digital cameras and MP3 players.
The service offers instant cash quotes, generating from a detailed pricing algorithm. Users receive a pre-paid shipping bag, in which they post the gadget to the company’s warehouse.
Within a few days after the gadget is received, the money is deposited into the customer’s bank account.
Owen McCrink, founder of the Victorian-based business, says the service encourages customers to recycle their old electronics rather than throwing them out, as is the norm.
McCrink talks to StartupSmart about technicalities, cashflow and the benefits of being green in his new venture.
What gave you the idea for ReGagdet?
I’ve always been passionate about what’s been happening online. I’m always on the lookout [for opportunities] to start up a business and was tossing a few ideas around.
One that’s really stuck with me is that in the US, I’ve seen a big market in essentially trading in your old electronics – old phones, old laptops, old game consoles – and there was really nothing in Australia that was similar.
You’ve got Cash Converters and a couple of online mobile buyers but nothing that offers a full electronic trade-in service, so I thought I’d give it a crack and see what comes out of it.
What was the next step?
I’m a mechanical engineer so I have quite a technical background. I did quite a bit of the groundwork myself in terms of getting the concept together; how it was going to work technically.
I sourced a programmer from overseas to work on the project fulltime, who’s still working for me now while we’re working on the next version of the website.
The guy that is working for me now – he was working for an outsourcing company from the US and during the financial crisis they eventually laid off all their overseas developers.
So during that time, I thought it was an ideal opportunity to get someone really experienced to work on the technical development of the business.
We launched in April of this year and we’d probably been developing it for about a year before.
How did you fund the business?
It’s all self funded at the moment from my savings. We’re paying a lot of money out for our gadgets so cash flow is a massive issue at the moment.
But there’s been no external investment; it’s all been funded by myself. So far, [I’ve spent] probably around $20,000 and that will probably be increasing soon.
As we’re paying out more money, we need to put more money into the business to pay people on time, so we’re looking at another $10,000 in the next couple of weeks.
How many staff do you have?
I’ve just got myself and the fulltime developer.
As soon as the cash flow really allows it [I will consider taking on additional staff]. Right now, I’m not in a position to be able to afford someone else in Australia to help with the operations of the business.
But obviously as we grow, we’re going to need to get some staff in Australia to help out.
How have customers responded to the service?
We haven’t done that much marketing – a lot of it has been through word of mouth.