Trade your old iPod for cash

Gazelle.com pays customers for used electronics -- everything from BlackBerrys to digital cameras to cell phones. And they'll recycle your clunkers for free.

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By Julianne Pepitone, CNNMoney.com staff reporter

gazelle_cellphones.03.jpg
Stacks of cell phones and BlackBerrys at the office of Gazelle.com, where customers can trade in old electronics for cash.
Recent deals
Here's a sample of what Gazelle.com is paying for used electronics.
MacBook Pro $713
StreetPilot GPS $36
PowerShot G6 digital camera $91
iPhone 3G 16GB $215
PlayStation Portable $38
iPod Nano 4th Gen. 16GB $91
LCD Monitor $36
iPod Touch 1st Gen. 16GB $109
iPod Shuffle 3rd Gen. 4GB $34
Kindle 1 $133
Dell laptop $204
Source:Gazelle
gazelle_israel.03.jpg
Israel Ganot
gazelle_rousseau.03.jpg
Rousseau Aurelien
How has Wall Street responded to last year's collapse of Lehman Brothers?
  • Made significant changes
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NEW YORK (CNNMoney.com) -- Consumers with a drawer full of old electronics could net a windfall at Gazelle.com.

The start-up, which launched in 2006, pays cash for used electronics -- ranging from LCD TVs to video game consoles and cell phones -- and then either resells or recycles the items.

Users log on to the site and answer a few quick questions, like whether the device powers on successfully, and if the battery works. Then Gazelle calculates how much it will pay for the item through an algorithm that uses price data culled from primary and secondary retailers like eBay (EBAY, Fortune 500) and Amazon (AMZN, Fortune 500). Four-year-old laptops can fetch as much as $200, and fourth-generation iPods can score nearly $100.

The company isn't profitable yet, but hopes to see a return simply by reselling the electronics for more than what it pays consumers for them. "Customers pay a premium for the convenience of having us sell the item for them," said spokeswoman Kristina Kennedy.

Gazelle accepts about 30,000 electronic devices -- although printers are excluded because of the cost to ship them.

The company pays for shipping and will send customers a box for most orders. When the item arrives at Gazelle's Boston office, employees sort the inventory in what Kennedy calls the "electronic orphanage."

How it works

One of Gazelle's 75 employees hand-inspects each device to insure the customer rating is accurate, and erases any user files -- from documents to photos to MP3s. If the item is deemed to be in good enough condition to resell to secondary retailers, wholesalers or refurbishers, the owner gets a check. If not, Gazelle recycles it at no cost to the owner.

Inventory usually leaves the the company's headquarters within four days of its arrival. And about 90% of the 75,000 items that Gazelle has received have been resold, with customers netting an average of $100 per device, Kennedy said.

"We actually lose a nickel here and a dime there on recycling, but it helps us make morally conscious decisions and serve our customers," Kennedy said.

That green spirit was a main driver in the creation of Gazelle.com. Co-founder Israel Ganot was inspired to start the site after a local retailer said it would charge him $10 to recycle his old BlackBerry. He had a feeling most consumers would never pay to recycle items, which spurred a big idea: create an online marketplace for used electronics.

Ganot and Rousseau Aurelien launched the site in 2006, just as the release of Al Gore's "An Inconvenient Truth" had amped up talk about global warming concerns and environmentally-focused ventures.

Their goal is to change the way consumers look at consumption. Most people won't simply junk their car -- they'd trade it in. Why can't that same school of thought apply to electronics?

The concept is catching on; Kennedy said that Gazelle is growing by 100% each quarter. The company took in more than 10,000 products in August alone. That's a lot of electronics, and the scalability of this business could soon pose a problem.

"Like any business, we're going to have certain challenges to scale up," Kennedy says. "But we've invested in back-end preparations, and we'll be ready when [growth] comes."

Whether Gazelle can turn a profit is another matter.

"We see this as a growth phase, and that's where we're challenging ourselves," said Kennedy. "We see this as a potentially $1 billion opportunity."

In the meantime, Gazelle's goal remains the same as when it began.

"We want to close the gap between stopping usage of a product, and its actual end of life," Kennedy said. "The dresser drawer is our biggest competition." To top of page

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