Implementing ReCommerce Strategies: How Brands Can Boost Financial Performance

Do you have unused items that still look good and work fine? As an entrepreneur, what better way to capitalize on these items than to sell them for money? Not only do they let you generate profits, but they also help you promote sustainability in business.

Enter the world of recommerce. Does this word ring a bell in the retail and e-commerce industries? Of course, it does!

But for those who don’t know, recommerce is simply selling and buying used products. It’s one of the business trends, apart from e-commerce, headless commerce, and even mobile commerce. 

But what is it, and how exactly does it work?

This page tackles what you need to know about recommerce, including its pros and cons. Read on to learn some practical strategies for boosting your brand’s finances.

What Is Recommerce?

Recommerce stands for ‘resale commerce’—the purchase and sale of used, refurbished, and overstocked products, typically done online. 

It’s similar to a secondhand marketplace, where people sell products they no longer need, and others buy them for their perceived value. However, these goods or items are usually sold at a lower price than newly manufactured or produced products.

A perfect and simple example is selling your pre-owned Rolex. If you have a collection of pre-loved watches, you can sell them in exchange for money. But if you’re venturing into the recommerce market, you can partner with several watch collectors and sell these items for lucrative profit.

The idea of recommerce aligns with the concept of sustainability—the practice of conducting business operations while helping preserve the environment and save the planet. In retail, it works by reusing products while also providing consumers with affordable options. 

As long as they still have value, repurposing these items is better than throwing them away as waste products. Below are evergreen treasures that make a niche for sustainability:

• Clothing items: Pre-owned clothing, shoes, and accessories are the common products best for resale.

• Electronic devices: Pre-owned devices like computers, laptops, tablets, and mobile phones are available for purchase.

• Reading materials: Think of selling used books, magazines, and other evergreen printed materials.

• Home appliances: Consider putting out secondhand household goods such as televisions, refrigerators, and even microwaves.

• Furniture pieces: Pre-owned pieces of furniture like sofas, tables, chairs, and sofas are available for purchase.

• Sporting gear: Used sports equipment such as bicycles, tennis rackets, and gym gear are best for sporting pursuits.

• Video games: Gaming aficionados usually buy pre-owned titles, consoles, and other accessories.

• Musical instruments: Think of secondhand musical instruments such as guitars, violins, organs, and pianos being sold to would-be owners.

• Automotive parts: Used car parts and accessories are often available online for vehicle maintenance, repair, and upgrades.

• Toys and collectibles: Pre-owned toys and valuable objects are up for sale, appealing to both collectors and youngsters. 

The rise of recommerce began on digital platforms as a way to declutter and make money. However, it has since grown into a major player in retail and e-commerce but focusing on sustainability.

MarkNtel Advisors predicts the global reCommerce market will reach a compound annual growth rate (CAGR) of 19.22% from 2023 to 2028.

Discover the potential benefits and drawbacks of recommerce on brands and customers below.

Pros and Cons of Recommerce for Businesses and Consumers

Recommerce proves beneficial to both brands and customers. 

Consumers are usually drawn to recommerce’s cost-saving benefits and environmental protection contribution. Key factors such as bargain hunting, avoiding excessive pricing, and adopting sustainable lifestyles fuel customer interest. 

According to Codup’s Consumer Perspective on the Recommerce report, consumers have economic considerations and consider environmental protection as critical factors for patronizing recommerce. The numbers paint a clear picture of these factors: 

Since many consumers patronize sustainable brands and purchase resold products for their potential benefits, businesses can take advantage of this opportunity. 

Recommerce is indeed a feasible alternative for brands looking to capitalize on these consumer preferences. However, it also comes with inevitable challenges and possible risks you should be wary of. 

Learn the advantages and disadvantages of recommerce in the next section.

Potential Benefits of Recommerce

Discover the possible benefits brands and consumers can reap from recommerce:

• Business sustainability: Recommerce helps reduce waste products by reusing and extending product lifecycles. It aligns with eco-friendly practices and consumer demands for sustainable products, contributing to environmental preservation. 

• Circular economy: Recommerce supports the reuse and repurposing of environmental resources. It provides a more sustainable economic model in which products are continuously reused and recycled rather than disposed of.

• Rare item accessibility: Recommerce gives consumers access to unique products, rare collectibles, and precious items that are difficult to get elsewhere. This caters to specialized hobbies and interests, providing customers with different shopping experiences.

• Cost-effectiveness: Recommerce allows brands to purchase reused stocks at a lower cost than creating new products. It improves their financial profitability in a competitive marketplace. Meanwhile, it reduces product costs, allowing customers to save money on their purchases.

• Business profitability: Recommerce results in increased income and decreased expenses. It delivers higher brand profits by tapping into new revenue streams and optimizing operational efficiency.

Possible Drawbacks of Recommerce

Be wary of the potential challenges and risks involved in recommerce:

• Quality issues: It’s inevitable for pre-owned items to have wear and tear over time. That results in lower product quality, affecting consumer trust and satisfaction in the marketplace.

• No warranties: Unlike new products, pre-owned items usually lack warranties or guarantees. They leave consumers with little options if they have problems with their purchases. That might discourage customers from buying used products in the future.

• Limited availability: Recommerce might not always be able to provide customers with what they exactly need. It causes purchasers to get frustrated and dissatisfied with your brand if they can’t find what they’re searching for.

• Logistics concerns: Managing recommerce logistics, such as shipping, returns, and exchanges, can be more complex and costlier for brands than traditional retail. It leads to problems that might impact operational efficiency and customer satisfaction.

• Negative perceptions: Some buyers have negative attitudes toward purchasing pre-owned items due to stigma. They might have alarming concerns about product sanitation, originality, and quality. That might hamper the acceptance and growth of the recommerce industry.

In the next section, learn how to improve your brand’s financial performance using recommerce strategies.

6 Recommerce Strategies for Boosting Your Brand’s Finances

Many brands have started jumping on the recommerce bandwagon due to their monetary perks and other potential benefits. Over 65% of U.S. online sellers claim they sell on eBay to make extra money, while nearly 15% do so due to lost household income.

Further, the survey finds a striking tendency for Generation Z individuals to patronize recommerce. About 38% say the economy boosts their eBay activities, while 58% claim they rely on the platform for extra money.

But here’s the good news: A whopping 93% cite that sustainability is either “very” or “somewhat” important to them in selling pre-owned items.

The statistics above highlight the importance of recommerce as a significant source of financial income. It prompts businesses to consider strategic approaches to capitalizing on this developing marketplace.

That said, here’s how to boost your brand’s finances using recommerce strategies:

1. Study the recommerce market

Before taking the plunge into recommerce, it’s better to examine the industry trends and consumer behaviors. As such, consider the market size, growth predictions, key competitors, and emerging opportunities to make informed decisions. All these will let you understand how recommerce works and make the most of it.

Bert Hofhuis, Founder of Every Investor, recommends investors perform due diligence before launching recommerce.

Hofhuis says, “As the recommerce sector grows, your brand must understand the changing landscape and consumer preferences. By researching market trends and aligning your strategies with them, you can achieve financial success in this dynamic and profitable industry.”

2. Partner with various suppliers

Working with different suppliers is crucial for establishing a wide array of pre-owned inventory. These partners can guarantee a consistent supply of products for resale. It’s best to forge agreements with various vendors to expand your product options, regulate inventory levels, and ultimately fulfill diverse customer needs.

Albert Kim, VP of Talent at Checkr, suggests critical screening and background checking for potential suppliers.

Kim explains, “For one, look for reliable suppliers of pre-loved items without compromising service efficiency and product quality. Likewise, diversify your partnerships to provide access to a variety of pre-owned goods. Collaborating with various suppliers can be instrumental to your financial success in the recommerce market.” 

3. Perform product refurbishment 

Product refurbishment should be part of your recommerce operations. The goal is to improve the quality and appeal of your pre-owned items, thus increasing their overall resale value. Through this, you can maintain the product conditions and extend their lifespans, attracting customers looking for high-quality pre-owned items.

Roman Zrazhevskiy, Founder & CEO of MIRA Safety, emphasizes the importance of product improvements in recommerce.

Zrazhevskiy argues, “In recommerce, refurbishment is more than just restoring or repairing goods or items; It’s about creating business value and establishing consumer satisfaction. By  investing in refurbishing or repair services, you can improve your offers, build consumer trust, and drive financial growth in a highly competitive industry.”

4. Set quality control in place

Quality control measures are crucial for ensuring pre-owned items fulfill client expectations. By applying stringent QA procedures, you can reduce the chance of selling defective products or substandard items. That translates to higher customer satisfaction and recurring business.

Ian Sells, CEO of Million Dollar Sellers, underscores the importance of quality assurance in recommerce.

Sells argues, “Quality issue is the primary consumer concern thrown at pre-owned items or used products. If anything, you must make your QA protocol a top priority in your recommerce business. By establishing strict standards, you can reassure customers about your products’ quality, dependability, and integrity, eventually achieving long-term financial success.”

5. Implement robust marketing

Recommerce success doesn’t stop with studying its market, partnering with solid suppliers, performing refurbishments, and establishing quality control. You should also put your pre-owned products out in the market and promote your brand. That’s where marketing comes into play, whether AI-driven and personalized email marketing, content creation, or social media management.

Michael Donovan, Co-Founder at Niche Twins, recommends harnessing the power of digital marketing for recommerce businesses.

Donovan explains, “What better way to boost your marketing than to promote your brand and products via various online platforms? Consider implementing online marketing tactics like SEO and PPC for online visibility and website traffic, email outreach for brand and product promotion, as well as social media marketing for customer engagement. They can translate to lead generation and sales conversion.”

6. Establish reasonable pricing

Setting acceptable prices is vital for attracting recommerce customers and maintaining market competitiveness. As such, carefully evaluate the market trends, product value, and customer preferences to determine the actual pricing of pre-owned products. That allows you to maximize sales profits while meeting price-conscious consumer expectations.

Anthony Martin, Founder and CEO of Choice Mutual, suggests conducting thorough research for fair pricing of pre-loved products.

Martin argues, “There’s a line drawn between pricing newly launched products and pre-owned items. The latter requires extensive research to understand their actual value after having been used compared to new ones. The key here is to strike a balance between affordability and value that will benefit your business and valued customers. A win-win for both parties!”

Capitalizing on Recommerce for a Financial Boost

Embracing recommerce presents a promising opportunity for your brand to achieve a financial boost. Not only does it help you make money, but it also assists you in promoting business sustainability. Most importantly, it proves beneficial to consumers looking for valuable items while helping them save costs.

But as an entrepreneur, consider the practical strategies recommended above. Start by studying the recommerce market to know how it works, what the industry demands, and what the consumers need. Likewise, work with reliable suppliers and refurbish used items. Plus, set quality control, robust marketing, and competitive pricing.  

As the demand for pre-owned items continues to rise, capitalizing on recommerce can position your brand for financial success and business sustainability!