Edible Apple

With the new iPad set for launch on March 16, Apple isn’t putting the old iPad 2 to rest just yet. On the contrary, Apple is keeping the 16GB wi-fi version of the iPad 2 available for purchase for only $399.

That’s great news for consumers, but not good news for current iPad 2 owners who want to sell their device and upgrade to the newest iPad model.

iPad 2 owners might have otherwise been able to sell their device for $399, but with Apple offering brand new iPad 2s at the same price point, that option goes out the window and works to compress the resale value of old iPad 2s.

So what’s an iPad 2 owner to do?

Well, there are certainly no shortage of resale options. eBay’s Instant Sale will reportedly net iPad 2 owners about $200 and Gazelle, whose commercials you might have seen, is open to paying $185 for the iPad 2.

If those figures aren’t appealing to you, fear not. Amazon will reportedly take that old iPad 2 off your hands for as much as $320, with higher prices for 3G equipped iPads.

The rub is that the purchase isn’t so much a purchase as it is an exchange for Amazon store credit. So Amazon is essentially using the program to generate more business for its online site.

To see why Amazon’s trade-in service is so clever, let’s try to think through the economics of an iPad trade. Say Amazon gives you $320 for your iPad 2. A company spokeswoman says that when people send in their gadgets, the company farms out the devices to a variety of third-party merchants, who then inspect, erase, and package  device for reselling… Where do these merchants resell your iPad? On Amazon, of course!

Amazon then gets to keep a portion of that resale amount, and while the details of that split isn’t known, we imagine it’s not too shabby considering Amazon has done most of the work.

It procured your iPad, it paid for shipping, and it’s handling all the resales on its own site. Let’s assume that Amazon gets to keep 85 percent of the resale price—so let’s say it gets $306 on an iPad it sells for $360. This means that after giving you $320 for your iPad 2 and then reselling it, the company is out $14.

Remember, though, that Amazon didn’t pay you cash. It only loses $14 if you spend all the store-credit in your account.

85% seems very high, here. But the moral of the story is that if you have an iPad 2 and want to get the most bang for your buck, or buck for your iPad shall we say, hit up Amazon’s trade-in site over here.

via PandoDaily