There is a trend toward the use of second-hand goods by both retailers and consumers. This trend is especially noticeable in the growing popularity of the recommerce industry, which allows consumers to get affordable and sustainable products and allows retailers to attract new customers and create additional sources of income.
This article will provide an overview of recommerce, including its various forms and the advantages it offers to sellers, consumers, and the wider community.
What is Recommerce?
Recommerce involves the purchase and resale of previously owned or refurbished items. The term “recommerce” is a combination of the words “reverse” and “commerce.”
It refers to the buying and selling of pre-owned or used products through physical or online distribution channels. Such an approach aligns with the principles of a circular economy, which aims to reduce waste and extend the life of resources.
An Overview of Recommerce History and Growth
The concept of recommerce has been around for centuries, as people have always bought and sold second-hand goods. One of the earliest examples of recommerce is the resale of used clothing, which has been a common practice for centuries. In the 19th and early 20th centuries, used clothing was often sold through second-hand stores or at flea markets.
The modern practice of recommerce as a formal business model has gained more widespread attention in recent years. Its rise to popularity mainly includes the growth of eCommerce and increased focus on environmental sustainability and waste reduction.
In particular, the recommerce of electronics, such as smartphones and laptops, has become more popular in recent years. Companies such as Gazelle and Decluttr offer buyback programs, in which consumers can sell their old electronics for cash or store credit.
Recommerce Growth and Online Development
As more people are looking to sell their used items, such as clothing, electronics, and home goods, the supply of pre-owned products has increased. This has made it easier for consumers to find a wide variety of products at discounted prices.
Such a growing interest in second-hand goods propelled recommerce to reach the digital landscape, driven mainly by the rise of eCommerce platforms.
The rise of eCommerce platforms has played a significant role in the growth of recommerce online. Online platforms such as eBay, Poshmark, Depop, and even Amazon have made it easier for individuals to buy and sell pre-owned products and helped create a market for recommerce.
Currently, recommerce is seeing significant growth. The second-hand market is expected to grow 127% by 2026, reaching $200 billion in sales globally. This trend has been accelerated in part by the COVID-19 pandemic.
Another factor contributing to the growth of recommerce online is the growing popularity of circular economy models. The concept of a circular economy is centered around the idea of keeping resources in use for as long as possible rather than discarding them after a single use.
This model has gained increasing attention in recent years as a way to reduce waste and the environmental impact of consumerism. Recommerce fits within this model, as it allows products to be kept in use for more extended periods.
In summary, the history and growth of recommerce is closely tied to the rise of eCommerce and the increasing awareness of environmental issues. The practice of recommerce is likely to continue to grow and evolve as more people become concerned about waste and the impact of consumerism on the environment.
Different Types of Recommerce
Various business models within recommerce aim to extend product lifespan, reduce waste, and provide consumers with affordable and environmentally-friendly alternatives to buying new items. These recommerce models include:
Resale Platforms
These online platforms allow individuals to buy and sell pre-owned products like clothing, electronics, and home goods. Examples of resale platforms include eBay, Poshmark, and Depop.
Refurbishment Centers
These are businesses that specialize in refurbishing pre-owned products and reselling them. They may focus on a particular product type, such as electronics or appliances, or offer a broader range of products.
Buyback Programs
Businesses offer these programs that allow consumers to sell their old products for cash or store credit. The products are then refurbished and resold. Buyback programs are often offered for electronics, such as smartphones and laptops.
Consignment Stores
These physical stores sell pre-owned products on behalf of the original owners. The store takes a percentage of the sale price as a commission.
Thrift Stores
These are physical stores that sell used products, often at discounted prices. Thrift stores may be run by non-profit organizations and focus on a particular product type, such as clothing or furniture.
Benefits of Recommerce
Recommerce offers a variety of benefits. Some of the specific advantages the industry offers to consumers and society include the following:
Cost Savings
Recommerce allows consumers to purchase high-quality products at discounted prices, compared to buying new ones. This can be a particularly attractive option for consumers on a budget or for those looking for a more affordable way to access high-end products.
Environmental Benefits
Recommerce helps extend the life of products and reduce waste, which can positively impact the environment. By keeping products in use for longer periods, recommerce helps lessen the demand for new products and the resources needed to produce them.
Economic Benefits
Recommerce can be a profitable venture for businesses, as it allows them to sell pre-owned products at a profit. In addition, recommerce can create jobs and stimulate economic activity in the local community.
Increased Access
Recommerce can make it easier for consumers to access high-quality products that may otherwise be out of their price range. It can also help democratize access to luxury goods, making them more widely available to a larger group.
How Online Sellers Benefit From Recommerce
The second-hand marketplace does not exclusively benefit the buyers. Selling pre-owned or second-hand items provides benefits to sellers as well, including the following:
Increased Sales
Recommerce can provide online sellers with an additional stream of revenue, as they can sell pre-owned products alongside new ones. It can help sellers increase their sales and boost profits.
Access to New Customers
Recommerce can help online sellers reach new customers who are interested in purchasing pre-owned products. This can be particularly beneficial for sellers specializing in niche products or with a smaller customer base.
Reduced Competition
By offering pre-owned products, online sellers can differentiate themselves from competitors who only sell new products. Thus, reducing competition and increasing the chances of making a sale.
Increased Brand Loyalty
Online sellers can show their commitment to sustainability and the circular economy by offering a range of products, including pre-owned ones. It can help sellers build brand loyalty and increase customer retention.
How Amazon Participates in Recommerce Industry
Amazon is a large eCommerce platform offering a range of products, including new and pre-owned items. Amazon has a number of programs in place that support recommerce, including its Amazon Renewed program and its Trade-In program.
Amazon Renewed is a program that sells refurbished and pre-owned electronics, such as smartphones, laptops, and tablets. These products are inspected, tested, and certified by Amazon to ensure they meet the same standards as new products. Products sold under the Amazon Renewed program are discounted compared to new products but may come with a limited warranty.
On the other hand, Amazon’s Trade-In program allows customers to trade in their used electronics, such as smartphones, tablets, and e-readers, in exchange for an Amazon gift card. The traded-in products are then refurbished and resold through the Amazon Renewed program.
These programs allow Amazon to sell refurbished and pre-owned electronics and provide consumers with an affordable and environmentally friendly alternative to buying new products.
A Thriving Industry with Endless Benefits
Recommerce has emerged as a significant force in the online marketplace. A combination of increased availability of pre-owned products, the growing popularity of circular economy models, and the rise of eCommerce platforms has driven the growth of this industry.
The recommerce industry is attracting a growing number of entrepreneurs due to its numerous advantages. These include cost savings for consumers, environmental benefits, economic benefits, and increased access to high-quality products.
As awareness of the benefits of recommerce increases, it is expected that the industry will continue to grow and evolve. Thus, making it possible for you to enter the recommerce market and succeed through proper research, planning, and implementation.