AO. Same camera, three payments.
Peter Jones rescued Jessops for £5 million. Last week he sold what was left to a company that sells washing machines, because the best thing you can sell somebody is something they already own.
THE GIST ON AO AND JESSOPS: "Jessops and AO"
What happened to Jessops?
Peter Jones from Dragon's Den rescued Jessops in 2013 for £5 million and reopened 28 shops. It went into administration twice more under him, and last week he sold what was left of it: seven shops and a million pound loss, to a company that sells washing machines.
Why would a washing machine company want it?
AO started in Bolton in the year 2000, selling white goods online: sexy stuff like fridges and tumble dryers. It's now doing £1.2 billion a year. Two years ago it bought Music Magpie for £10 million, the company that buys your old phone off you.
Jessops has a second hand arm called Camera Jungle, and that is what AO was buying.
What is the infinite money hack?
They sell you a camera, and years later they buy it back off you. Then they sell it again to someone else, at a better margin than they had when they sold it to you. Same object, three payments, infinite money hack. And the cost of finding a new customer is zero, because they already know who you are.
Why are cameras perfect for this?
Phones lose their value in about 18 months, and laptops are the same. But a decent camera body and a lens from 10 years ago still has real value. The stuff coming back through the door is really worth having, which is quite rare in the gadget world.
So there's now a race for the contents of your drawers: old phones, cameras, games consoles, the lot. You're sitting on it for free, storing someone else's inventory in your spare room, until one day you sell it to them for £30. And they'll probably sell it back to you for £80.
Would you sell your old gadgets back to a shop?
Your take. One tap, then see how everyone else voted.
Quick answers
What happened to Jessops under Peter Jones?
He rescued it in 2013 for £5 million and reopened 28 shops. It went into administration twice more, and last week he sold the remaining seven shops at a million pound loss.
What was AO actually buying?
Jessops' second hand arm, Camera Jungle, following its £10 million purchase of Music Magpie two years ago.
Why are used cameras valuable?
Phones lose value in about 18 months, and laptops are the same, but a decent camera body and a lens from 10 years ago still has real value.
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