Long Island-based PayMore hits 150 stores as used-electronics business booms

U.S. consumers have gotten a lot more comfortable buying used goods amid rising prices and tighter budgets over the past few years.

This trend is playing out at PayMore, a fast-growing, Long Island-based electronics resale retailer that has more than doubled its number of North American stores in the last two years — its 150th store was scheduled to open in Baton Rouge,  Louisiana, on Monday— while sales have boomed, the chain’s co-founders said.

Quickly rising prices for new electronics are helping to drive sales at PayMore’s stores, which buy and sell used cell phones, gaming systems, laptops, cameras and other electronics, they said.  PayMore's customers who sell their used electronics in the stores receive cash from kiosks on site.

Sales at PayMore stores that have been open at least one year grew 47% in the third quarter of this year compared to the same period last year, the company said.

“In terms of what’s going on in the country and even internationally, you know, the chip prices are higher, the RAM [technology] prices are higher, the demand is there. So, we’re seeing more people turn into trading … to capitalize on the things they have for cash, spending it wherever they want,” said Erik Helgesen, co-founder and president of PayMore.

Founded in 2011 by Helgesen and Stephen Preuss, both Long Island natives, PayMore is a chain of almost all franchise locations.

Those franchises benefit from being connected to a shared, real-time database  that assists with setting prices for merchandise, Helgesen said.

“All the buying and selling transactions come into one algorithm. We manipulate that a little bit to make sure we’re on top of the trend. So, say something is really hot right now and people are really trading it in. That price is going to rise up because the demand is there,” he said.

Hempstead resident Levi Pierre became a first-time PayMore customer last week. 

After he received his new Apple iPhone Duo by mail, he decided to replace his Samsung smartwatch with an Apple smartwatch that he could sync with his new phone.

On Thursday, he took his Samsung Galaxy Ultra Watch to a PayMore franchise store in West Hempstead. He gave the watch to a salesperson at the counter, received a QR code on his phone and then scanned the code at a kiosk, which dispensed $80 in exchange for the watch.

The whole process took about 15 minutes.

“And actually, what I got for it is a down payment on my new watch, so it worked out,” said Pierre, 39.

Of PayMore's 150 stores, 136 are in 26 states and 14 are in Canada. The company expects to end this year with about 165 stores and plans to open an additional 150 stores by the end of 2027, when the chain will have locations in 40 states, PayMore said.

The chain has two stores on Long Island — in Massapequa and West Hempstead — and plans to open 11 more in the region, at a pace of two to three a year, starting with Huntington in 2027.

PayMore aims to have 2,000 stores in North America over the next decade or so, the company said.

Consumers seek cheaper alternatives

Nationwide, rising prices for new electronics, coupled with fewer major improvements in newer devices , are prompting more consumers to buy used devices, said Nabila Popal, senior director of data and analytics at IDC Corp., a market intelligence company in Boston.

The average U.S. retail price of a new smartphone this year is $991, up 20% from a year ago, while manufacturers’ shipments of new phones to retailers are expected to decline by 2.6%, according to IDC.

The average price of a used smartphone in the U.S. this year is $506, up 3% from last year, IDC said.  The number of used phones purchased is expected to increase by 3.3%.

Another factor in the growth of the used-electronics market is the increase in places to buy the devices, Popal said.

 Consumers wary of buying potentially faulty used devices from individuals on platforms such as eBay, Craigslist and Facebook now have more established retail options, including Walmart and Best Buy, Popal said.

“Consumer trust has gone up, and that, simultaneously, with new smartphones becoming more and more expensive, consumers are like, ‘OK. Why don’t I just buy a 2-year or 3-year-old smartphone that’s, you know, a premium high-end phone that’s just used, for the same price that I would be able to get a mid-tier phone today in the new market,” Popal said.

A different direction

Preuss and Helgesen first partnered in 2004 when they opened a secondhand store called QuikDrop in Massapequa Park that sold a wide range of goods, including electronics, clothing, jewelry and collectibles.

But the business faced several challenges, including the stigma associated with being a secondhand retailer, Preuss said.

After noting that QuikDrop’s biggest sellers were electronics, Preuss and Helgesen rebranded the store as PayMore and changed its focus in 2011.

PayMore’s biggest challenge at this point is its lack of name recognition, as larger players in the used-electronics market, such as GameStop, eBay and Amazon, garner more attention, said Preuss, who is CEO of PayMore. 

But it helps to have physical stores, Helgesen said.

“We have a big advantage because we have boots on the ground. We’ve built a last-mile network, again, 150 stores. So, obtaining the inventory, we’re able to get that and resell it back into the community without all the logistical challenges,” he said.

Preuss emphasizes that PayMore is not a pawn shop, which makes loans using merchandise as collateral . PayMore specializes in electronics, and it does not grant loans.

“Anything you can put a battery in or plug into a wall, we buy it here. But we’re special, highly specialized in the electronics field, so we’re able to give a fair price, a safe and secure transaction,” Preuss said.

PayMore also sells products online, recycles electronics and deals in trading cards.

The company has some customers that are businesses, but those sales account for less than 1% of all revenue, Helgesen said.  

In September, John Daugherty, GameStop’s former vice president of refurbishment operations, processes and services, was hired as PayMore's head of accounts and strategic development to expand its business-to-business sales, Preuss said.