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Lessons from Arrow’s Closure of IT Asset Disposition Business

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Last week Arrow Electronics Inc. announced that it would be shutting the doors on its IT asset disposition service business leaving the industry dumbfounded and thousands of customers concerned with how to proceed with their day to day disposal requirements.   

Although Arrow has claimed the USA operations will remain active until end of the year, we have received several reports from Arrow’s customers that they will no longer receive disposed of assets shortly after this month.

If you are a current customer of Arrow or otherwise depend on a single service provider for your global asset disposition services there are some lessons to take away from this as you look to source your next provider.

The Largest vendors don’t necessarily offer more stability or security.

Many businesses signed on with Arrow because they liked the security of working with a fellow Fortune 500 company.  Arrow actively sold these businesses a narrative that they were a more stable option than the smaller boutique providers since they had the capital and infrastructure necessary of supporting the largest customers.  Ironically in the end Arrow’s decision to end the ITAD service line is at least partly because they are such a large public company and had the need to cut out expenses from a small business unit to avoid having to repeatedly publish poor earnings reports.

I do not agree with Arrow’s claim that they are leaving the ITAD space because it is not a sustainable business model.  There are plenty of healthy and capable ITAD providers that offer this service has their exclusive business model.  For instance, my firm IT Asset Management Group has been operating in the space for almost 20 years and we forecast continued year over year growth.

It is important to at least consider setting up a multi-vendor option for disposition and data destruction services.

As an IT asset disposition provider I’m happy to hear our customers want us as a single provider for their disposal and data destruction needs.  However, I suggest to all of the largest customers, especially those with a significant global foot print, to consider having multiple vendors to properly cover their needs.

Arrow is dropping out with very little notice and many customers are concerned about establishing new vendors under deadlines that large organizations worry they will struggle to meet.  By vetting and properly contracting multiple vendors to cover your disposition and disposal needs you will protect your company from your vendor leaving the market or otherwise under performing to a degree that would require a switch in providers.

Over the years we have worked with many customers that have a huge footprint in the USA and want us to cover their much smaller footprint globally.  The most successful of these customers have leveraged our company to receive lower cost services and more competitive asset recovery value returns on their larger sites in the USA and relied on a network of regional partners to cover their smaller global offices.  For many of our clients we do also manage the international disposal network via our own substantial team of capable partners.

The customers that have been able to remain more flexible with their approach, not only financially perform better, but are also better setup with redundancies and have avoided the stress that so many others are feeling from Arrow’s sudden announcement to quit ITAD.