A few weeks back I wrote an article called, "The Upside of a Down Market: 10 Reasons a Recession is Good for Selling".    My friend Dean read the article, called to congratulate me and gloat about how he is literally making a "killing" in this recession.  

Case Study: Parts is Parts

Dean's company, high tech privately owned, sees their revenues growing this year by 20%+ and they project to hit upwards of $300M.  How is that possible in a down market? 

Here's the answer in 4 easy steps:

1) When companies buy high-tech equipment,  they usually buy 'spare parts' in the order of 10-20% of the actual order.

2) Although they're not buying anymore, over the years these spare parts have been accumulating at the customer premise and have become sizable inventory taking up valuable rackspace.

 Enter my friend...

3) He approaches Company A and offers to take their inventory for let's say 30 cents on the dollar,

4) If my friend finds another Company (B) that doesn't have any spare parts, he then offers to sell them some of his inventory (which he got at 30 cents on the dollar) for about 60 cents on the dollar.

It's a win-win-win. 

- Company A sells their dead inventory and gets them off the books and shelves. 

- Company B buys much needed spare parts at a 40% off. 

- Dean's company walks away with a 30% middleman commission.

And that, my friends, is another example of the "Upside of a Down Market".