If you’ve picked up any sticker-tagged item at a garage sale or swap meet, you’ve participated in recommerce—reselling used or “pre-loved goods.” Thanks to payment technology and online recommerce marketplaces, the trend is taking off, especially in fashion, where it’s growing faster than traditional retail commerce.
A recent U.S. survey found 74% of consumers have shopped or are open to shopping for secondhand apparel. Over $200 billion in secondhand fashion sales are expected globally by 2026.
Let’s dig into the definition of recommerce, why customers care, and the benefits and considerations for your business.
What Is Recommerce?
Derived from “reverse commerce,” the recommerce trend is changing how companies interact with customers. Reselling is a tactic for achieving a circular economy and increasing the sustainability of production, short-circuiting the production and waste cycle of manufacturing and retail systems.
The circular economy allows sustainable brands to go beyond the mantra of “reduce, reuse, recycle” by providing a pathway to eliminating waste.
Brands are launching buyback or trade-in programs for payment, loyalty points, or discounts—maintaining customer relations throughout the cycle of use of their products. For example, Patagonia and Arc'teryx offer store credit in exchange for used goods that are then turned into expert-repaired online resales.
As “the next big thing in fashion,” luxury and everyday brands are getting on board. The RealReal, a publicly-traded company, relies on meticulous and AI-generated authentication processes to resell consignment luxury goods.
When done at scale, refurbishing, mending, repairing, and reselling create enormous value and sales potential. Poshmark, the thrifting platform empowering individuals to resell their used clothes and goods, was purchased for $1.2 billion in 2022.
How Recommerce Started
Recycling and reselling online marketplaces are available for a range of products—everything from electronics to books and jewelry. In the B2B market, reselling dead stock—unsaleable goods that would normally end up in landfills—can provide resource materials.
In the mid-90s, eBay, Craigslist, and Amazon built the resale space online, powering sales between small retailers, consumers, or individual sellers. As an early pioneer, eBay is now creating more personalized and community-oriented shopping experiences to keep pace with recommerce trends.
Online technology also facilitated reselling of excess electronic goods, as brand-new product models were rapidly released to replace the old. Apple began selling refurbished products in its online store in 2016.
Platforms have emerged to scale the reselling of goods for companies. Launched in 2012 as a peer-to-peer platform, Trove Recommerce offers B2C resale solutions to companies like REI, Patagonia, Levi’s, and Lululemon. Over 700 brick-and-mortar stores now use Trove to manage their recommerce sales.
“With recommerce—by leveraging others’ resources—you can find what you need, when you need it, and locate resources outside of supply chain disruptions,” says Stephanie Benedetto, one of Inc.’s Top Female Founders of 2020, and the CEO and co-founder of Queen of Raw. The award-winning company started as a marketplace to monetize textile waste and is now available to small and enterprise-level companies.
In one case, a multinational corporation using Queen of Raw’s recommerce inventory management software saved over $14 million in inventory and holding costs by diverting materials from landfills. Benedetto says that the economic case for recommerce is even stronger in an inflationary, post-pandemic economy facing labor and supply shortages.
Why Do Customers Care About Recommerce?
In a 2022 survey co-produced by the Wharton School of the University of Pennsylvania, two-thirds of consumers said they would be willing to pay more for sustainably produced products. According to eBay’s 2022 Recommerce Report, 34% of international consumers say sustainability is the reason for participating in recommerce, matched by 27% of sellers.
According to eBay, customers are most likely to buy used goods to save money (73%). Meanwhile, 37% want something not available off the manufacturer’s shelf.
During the COVID-19 pandemic, more consumers became interested in reducing their environmental impact. In a 2020 McKinsey survey in the UK and Germany, 63% of respondents said they consider a brand’s promotion of sustainability as an essential consideration.
Younger consumers (think Gen Z and Generation Alpha) are at the forefront of this revolution in retail, driving demand for secondhand goods. Their strong interest in environmental causes makes them more likely to spend more on sustainable products.
Gen X are increasingly involved: 90% of consumers said they would be willing to pay an extra 10% or more for sustainable products.
Not all retailers have responded to these consumer wants, leaving a gap in the market. This is a big opportunity for ecommerce leaders.
What Are the Benefits of Recommerce for Your Business?
Reasons to enter the recommerce stream include bottom-line and big-picture benefits:
- The sustainable production or reselling of goods expands on a company’s branding as a purpose-driven business with environmentally sound values.
- Reselling creates a stronger connection with consumers and increases loyalty.
- If you want to grow, sustainability values can attract talent that seeks work with more purpose.
- With refurbished or used products, recommerce can help acquire new customers based on values or price points.
- After an initial investment in tools and processes, reselling goods or reusing raw materials can save money in the long term and avoid supply chain issues.
What Are the Considerations for Your Business?
To effectively build a recommerce loop:
- There will be upfront costs in setting up new processes, which could involve logistics management, customer relations, and other systems.
- The logistics of repairing items for new products will require some thinking around design and staffing.
- Individual sellers of used goods to companies may overestimate their items' quality or resale value.
- To close the waste loop, you will need a plan for items that cannot be resold and how these can be recycled or otherwise reused.
- Authentication can be a critical factor in success. For example, eBay has started authenticating luxury items like handbags, watches, and collectibles.
How Do You Implement a Recommerce Strategy?
You can start your journey into the recommerce market by reducing what ends up in landfills, where we now send one garbage truck full of clothing daily.
At the end of day, (recommerce) is just commerce: Responding to supply and demand. When you understand what you have available in unused material, there are so many opportunities.Stephanie Benedetto, CEO and co-founder of Queen of Raw
- Start by reorienting your thinking around production and that waste is just a part of doing business. One fundamental principle of the circular economy is that it allows for the “decoupling economic activity from material extraction.”
- Take time to understand what you are producing, how, and what waste is being created in your processes. It could be one issue you resolve to make your products more sustainable.
Once you know what you have across your supply chain, the best thing to do with it is to reuse it yourself—which offers the most value. Think of all the use cases and the hierarchy of needs. If you can't reuse it, resell it. If you can't resell it, recycle it or donate it.Stephanie Benedetto, CEO and co-founder of Queen of Raw
- Think about what tools you would like to use. Ecommerce retailers can jump into recommerce using free (Facebook Marketplace) or paid (Trove, Queen of Raw) platforms. “There are lots of different platforms to use, but don't forget there are a lot of opportunities to own that recommerce channel to get better returns and better value,” Benedetto says.
- Find new opportunities to reconnect with customers through recommerce. Down the road, you can build in post-sales support and strategies to remind consumers about high-quality goods they may want to sell. Could it be time to turn in that kayak for a new model or to unbury the sleeping bag that hasn’t been used in a while?
- Define how to measure your impact and report back to customers accurately. Having the data presents an enormous opportunity to participate in more conversations around sustainability, Benedetto says.
Take A Big Step Toward Sustainability With Recommerce
Consumers are shifting towards more sustainable choices. When you can leverage ways to do more with less, it’s good news for the planet and your ecommerce business.
Is recommerce for you? Ultimately, every company selling a product creates some kind of waste, says Benedetto. It’s a big issue, and there are several considerations involved. However, getting started with recommerce could entail adjusting just one part of your production cycle.
Get the latest trends in the ecommerce space by subscribing to The Ecomm Manager newsletter. Don’t get left out of the loop!
More great ECM content:
- The Sustainable Ecommerce Handbook (Free Download)
- The Sustainable Ecommerce Guide To Dead Stock
- From Green To Mainstream: 6 Steps To Making Your Brand More Sustainable
- 7 Examples Of Sustainable Ecommerce Packaging & Eco-Friendly Materials
- What Is ESG Reporting: Trends, Statistics & Why It Matters
- 10 Best Sustainable Packaging Manufacturers In 2023