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Aeron B Used Chair Index

An interesting indicator of the technology sector’s health might be the sales figures of Aeron chairs. This article explores if this holds true.

Leading indicator of the tech sector's health?

The media is endlessly jibber-jabbering about where the economy is headed and where we are in the business cycle.

Much of this analysis relies of trailing indicators. These can confidently report several months after the fact what had happened. Which is interesting and informative about longer term trends, but less helpful when it comes to trying to figure out where things are at right now.

Recently I saw an announcement that Herman Miller had released an update of their iconic Aeron office chair range. That got me thinking.
Herman Miller Aeron "B" Chair.
Herman Miller Aeron "B" Chair
Just about every start-up site I’ve visited over the years used Aeron office chairs.

Usually they appear shortly after a start-up receives its first round of venture capital or angel investor funding. That is around the same time the founders suddenly start driving around in an expensive sports car.

Sports car

Many well-funded IT departments also have loads of Aeron chairs. Even the more infamously tight fisted sites will get them in for those cubicle dwellers who play the dodgy back OHS card to their HR department.

An interesting indicator of the technology sector’s health might be the sales figures of Aeron chairs.

Herman Miller’s financial reports contain the aggregate sales figures, though not explicitly broken out by product line. However those figures are also be trailing indicators, reporting what was sold several months ago.

Some better questions as to the health of the technology sector would be:

  • What happens to all those used Aeron chairs when their former owner’s go bankrupt? 
  • How many of Aeron chairs get listed for sale? 
  • What prices are achieved for used Aeron chairs?

Where does used office furniture go to die?

Unsurprisingly it turns out the used Aeron chairs mostly get listed for sale on ebay.

Wholesalers often purchase them in bulk at liquidation auctions, then recondition and resell them individually at a considerable markup over the auction price.

Some wholesalers have been in the business long enough to recognise the cyclical nature of Aeron chair resales, offering to repurchase any chairs they have previously sold for a guaranteed price.

This creates a finite price spectrum for used Aeron chairs.

The ceiling price is set by the recommended retail price of a brand new chair.

A proxy floor price is set by the wholesaler guaranteed re-purchase price.

Over time market forces will move the average sale price achieved between those two ends of the spectrum, as the volume of sale listings fluctuate with the number of used Aeron chairs hitting the market.
The theory: tracking the sales volume and average price of used Herman Miller Aeron “B” chairs will provide an interesting index potentially reflecting the current health of the technology sector.

So what?

Time will tell if that theory proves to be true. It will be interesting to watch.


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