– Starting out as a small business owner who sold furniture, pivoting to specializing in refurbishing electronic products
– Recycling one laptop saves 149kg of CO2, and obtains ISO 14001 environmental certification
– B2C sales of 6.5 billion with trust and quality, expected to reach 10 billion this year including B2B
As the second-hand market rapidly grows, trust issues also arise. The price is low, but the number of consumers who hesitate because they cannot be sure of the quality is increasing. There is a startup that is growing by overcoming the fundamental limitations of this second-hand market head-on. It is the electronics refurbishment specialist 'Dogumoum'.
The toolkit sells used laptops, tablets, and desktops under the brand name 'Reaper Lab' and achieved 6.5 billion won in B2C sales last year. This year, it is aiming for 10 billion won in sales including B2B. The secret to its success is that it solved the trust issue in the used market by making it a structure where 'the company directly purchases and guarantees quality' rather than a simple used transaction.
Toolbar CEO Park Kyung-geun (right) and Team Leader Lee Seong-hee (left)
The story of a start-up that started from the closed shop in Hwanghak-dong
The background of the toolkit is unique. It originally started as a platform to connect small business owners who are going out of business with those who are starting a business.
“I saw a news article about 800,000 small business owners going out of business every year and selling their furniture at a low price. On the other hand, the 1.1 million people who start a business are buying used items at high prices,” explained CEO Park Kyung-geun.
On one side of Hwanghak-dong Manmulgeori, there is a street that specializes in small business owners' closed items. Here, businesses buy them at a low price, store them in a warehouse, and then sell them to entrepreneurs at a fair price. They tried to solve this problem with a platform, but after starting in 2019, they were going through trial and error when COVID-19 broke out.
“As the rate of business closures skyrocketed due to COVID-19, the market was not formed. At that time, one of my business partners who was selling laptops suggested, ‘Try buying them and selling them yourself.’”
The laptop business, which started with one or two, grew rapidly as telecommuting became widespread. Above all, laptops were a suitable product to handle in the limited space of a shared office. It was a complete pivot from the original planned platform to a specialized electronics refurbishment business.
7-Step Process to Create a Product You Can Sell to Your Family
The key to differentiating the toolkit in the used market is quality control. The quality control team has a clear goal: 'To make a product that can be sold to our own family.'
“From receipt to shipment, there is a total of 7 steps in the process. There are 18 system items checked and 6 appearance inspections,” explained Team Leader Lee Sang-hee.
The warranty system is also solid. The software is warranted for 3 years, the hardware for 3 months, and the paid AS is supported for life. The time rollback service allows you to restore the product to its initial state at any time, and a 14-day free trial period is also provided.
All products are graded and transparently disclosed for their specific characteristics. They are classified into various appearance grades from S to B to satisfy the diverse needs of customers.
B2B expansion expected to improve profitability
The current profitability of the toolkit is not high. This is because we are continuously investing in price competitiveness and improving service quality. However, the B2B business that we are launching in earnest this year is expected to be a game changer.
“Our B2B sales, which were 50 million won at the beginning of the month, have now increased to the mid-100 million won range.”
The B2B opportunity came from an unexpected place. A mid-sized company was looking for a laptop purchaser and came across Toolkit. Toolkit bought laptops that were previously sold for 50,000 won for 150,000 won. It is a structure that allows companies to buy at a lower price than the existing purchase method while still offering a price three times higher.
“There aren’t many places like ours where we can handle large purchases and payments all at once. We see an opportunity here.”
Building a more sophisticated inspection system with AI technology
Toolkit is also actively introducing AI technology through government support projects. It was selected for the AI Data Voucher and AI Innovation Voucher projects and developed an AI that automatically measures the appearance of a laptop, completing MVP.
“It’s a system that automatically takes pictures of all sides and grades them when you put your laptop on it. We plan to introduce it once hardware development is complete.”
We also built an automatic hardware inspection system. When a USB is plugged in, the system automatically detects software abnormalities and uploads the results to ERP. We also developed our own ERP system specialized in second-hand transactions, which improved efficiency from the product development status to real-time inventory management.
The value pursued by Toolkit goes beyond simple second-hand trading. Their business model itself is an example of environmental protection.
Refurbishment reduces carbon emissions by 89%
According to a study by the French Agency for the Environment and Energy (ADEME), recycling one laptop can reduce carbon emissions by 89% compared to a new product. This means saving 149 kg of CO2 and 665 kg of global resources per laptop.
“Based on the 42,000 units we’ve recycled so far, we’ve saved 8,038 tons of CO2, 32,146 tons of Earth resources, and 286,299 liters of water. That’s enough to fill an entire three-bedroom house with CO2.”
In particular, the environmental pollution caused by the laptop manufacturing process is considerable. When manufacturing a new laptop, 167 kg of CO2 is emitted, which is enough to fill a three-bedroom house with just three new laptops. However, if the product is recycled through refurbishment, this carbon emission can be reduced by up to 89%.
Obtained ISO 14001 environmental management system certification
In recognition of these environmental protection achievements, Toolkit has obtained ISO 14001 Environmental Management System certification. This is a certificate obtained upon recommendation from the Carbon Promotion Agency, the organizer of the Startup Leap Package.
“ESG is a hot topic these days, but in our case, we have a system in place to determine whether the entire system is in line with environmental management and maintain it.”
Toolkit is creating a consumer culture that takes care of both the environment and rationality by changing the perception of used products. It provides better service than new products at a price that is 50-60% cheaper than the regular price, while also realizing the value of protecting the environment.
Goal of an eco-friendly recommerce brand that everyone can recognize
The ultimate goal pursued by Toolkit is to change the perception of used products in society as a whole. In 3 to 5 years, we want to become a brand that immediately comes to mind when people think of used products.
“I want to change the perception of used products. I hope that used refurbished products will become a choice that is both environmentally friendly and rational.”
Category expansion is also approached from an environmental protection perspective. We plan to expand from laptops to tablets, desktops, and even home appliances to expand the effect of recycling electronic products to more areas. We are also considering overseas expansion, and dream of becoming a refurbished unicorn that realizes environmental protection like the French back market.
“We want to expand beyond just being a brand that makes great laptops, to a sustainable brand that customers can expect. We want to be remembered as a company that cares about the environment.”
A collection of tools that solves trust issues in the second-hand trading market with quality and service, while also protecting the environment and realizing a circular economy. It remains to be seen whether their dream of an 'eco-friendly repurchasing brand known to all citizens' will become a reality.
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