VentureBeat

In expecting that it can overcome the power of human laziness, the Boston, Mass. startup Second Rotation, which is rebranding today as Gazelle, is certainly setting the bar high for itself.

Every gadget’s life includes three phases: First, it is a shiny new toy, the object of constant attention. Next, it becomes a workaday standby, used but rarely thought about. Finally, it is tossed into a drawer in favor of a next-generation device, there to be forgotten. Gazelle hopes that it can reach into those drawers, pulling out the value.

The idea to make it easy to resell old devices. Auctioneer eBay was founded in part on the expectation that people would instead sell their unused items, but statistics show that few bother. Auctions seem easy, but are an annoyance to set up, at least for average people. So Gazelle is predicating its business on what its COO, Israel Ganot, described to me as the Netflix model.

Selling an item through Gazelle will take only a few steps. Visitors to the company’s website will find a streamlined search process by which they can locate their device model, whether it’s a cell phone, MP3 player, laptop or other gadget. After inputting the condition it’s in, the site will either give a price for the item or offer to recycle it, if it looks worthless.

Once you’ve agreed, Gazelle sends an empty green box with its own name prominently displayed, and shipping label included. Put in your device and send it back, and the company will examine the offering to see if you told the truth about the condition. If you didn’t, they’ll send it back, again with free shipping.

If the item was, indeed, in whatever condition you said, Gazelle will put it up for sale on — where else — eBay, where the company still operates as Second Rotation.

According to Ganot, the user only loses about a third of the total price of the item, which is not that bad a trade-off for something they probably wouldn’t have ever sold anyway. (I’m the perfect example, with an assortment of used laptops, phones, speakers and other paraphernalia scattered about my home.) And by offering free recycling for all the item categories it buys from, the company also helps the environment.

The question is, even once Gazelle has made it easier for people to get rid of their items, will they bother doing so? The plan isn’t without precedent. Flipswap, for example, has made a business of taking in aging cell phones. There’s also TechForward, which asks people to pay for a buyback plan that guarantees a predictable depreciation for their items.

Second Rotation has so far bought items from thousands of users, Ganot says. But Gazelle is hoping to build a multi-billion dollar company on the expectation that millions of people will come to associate its name (”Don’t sell it, Gazelle it!”) with getting rid of old stuff. Ganot’s hoping to be bringing in at least 100,000 devices per year, within a year from now.

Unfortunately, there’s no way they can ever make sending in items any easier than simply forgetting about them. And the lower the price, the more likely that result is — see the picture above for an example. More than anything, Gazelle will be aided by a good advertising campaign, one with a healthy dose of guilt included (after all, you’re eventually going to send all those old devices to the landfill).

Gazelle took its first funding, $4.4 million from Venrock and angel investors, back in January. The company will likely be on the prowl for more in 12-18 months.

TechForward, one of several companies that sees opportunity in the market for reused consumer electronics, believes its guaranteed buyback plans are just the thing for people always lusting after the latest in high tech consumer electronics.

Like fellow startups Flipswap, Turtle Wings and Second Rotation, TechForward is touting the concept of “Ownership 2.0″ — the idea that you should be able to donate, sell or trade-in a gadget you no longer want. Unlike its rivals, however, the Los Angeles, Calif.-based firm will lock in a future trade-in value for your device at the point of purchase. The firm uses in house research and comparison tools, in addition to information from primary and secondary markets, to determine the value of the gadgets.

A common complaint heard about companies like this is that the customer often gets a lot less for his device than he could’ve had he sold it through a secondary market like eBay or craigslist. Not true, say Jade Van Doren and Marc Lebovitz, TechForward’s co-founders, who argue that comparing their service to eBay is unfair since only about 1 percent of users actually sell goods. Moreover, only Power Sellers, the highest rated sellers, are able to sell their used products at competitive prices, they say. The comparison also discounts the time and fees associated with using secondary markets.

Under a typical scenario, a customer will pay a one-time service fee to purchase a buyback plan, which gives him the option to return the device anytime during the next two years. Returning it earlier or in mint condition will earn a higher amount, paid out either as a check or gift card depending on where the plan was purchased, though the customer can also choose to keep the device. TechForward will then resell or recycle your device, following the highest environmental standards.

Despite what many consider a similar business model, Van Doren and Lebovitz believe their company, unlike other startups that provide extended warranties or trade-in agreements, has carved out a unique market niche with its buyback plan platform. They see themselves as more of a lifestyle company — one that, like subscription service firms Netflix and BabyPlays, embraces the “ownership cycle” model.

It remains to be seen to what extent this concept catches on. Many are unwilling to accept a sometimes steep cut in the value of their device, even if that means they’ll be guaranteed the money. On top of having to pay a one-time, unrefundable service fee, even the most ardent tech fans may think twice before committing to such a program. Given the recent proliferation of other reused electronics startups, however, it’s clear this concept is gaining currency alongside traditional warranty options.

Now that it has gotten its name out there, TechForward’s next objective is to break into national retail chains, particularly consumer electronics retailers like Best Buy or Circuit City. It just announced a new partnership with W3 Solutions, a major extended service plan provider, with which it will offer buyback plans bundled with extended warranties — allowing it to pursue a two-part distribution strategy.

When I asked Van Doren and Lebovitz whether they planned on eventually accepting a greater variety of consumer goods, they told me they would stay focused on consumer electronics for now though they remain opened to new opportunities. TechForward’s goal over the coming year is to ensure its buyback program is offered everywhere consumer electronics are sold and to expand its operations throughout North America and Europe.

The company’s investors include First Round Capital and New Enterprise Associates, with whose help it has raised a first round of funding. It plans on raising a second round beginning in the fall or winter of this year.