The Economics of ReCommerce: Unveiling the Financial Benefits for Businesses and Consumers

1. What is ReCommerce?
2. The Financial Benefits of ReCommerce for Businesses and Consumers
3. Best Practices for ReCommerce Sellers and Top Tips for ReCommerce Buyers
4. Digital Tools and Platforms To Use for ReCommerce
5. Final Words

In today's business landscape, there's a line drawn between those who are gumptious enough to make money and those who are slothful enough to sit all day long. Sure, you can have a full-time job, get a side hustle, or venture into business. However, what better way to make extra money than to turn trash into cash?

Enter reCommerce, the practice of selling and buying secondhand products.

Of course, these goods, or items aren't trash you can simply throw in the garbage. While they've been preowned and reused, they have perceived value that others will surely patronize. And for whatever it's worth, they provide monetary benefits to both sellers and buyers.

This page shares with you the economics of reCommerce. Discover the market’s financial benefits for both businesses and consumers. Furthermore, learn some best practices for aspiring sellers and practical tips for interested buyers.

What is ReCommerce?

ReCommerce is short for 'resale commerce.' As the name suggests, it's selling and buying secondhand products, which have been used, sometimes refurbished, and often overstocked in the warehouse. Below are things you can sell or buy in the reCommerce market:

• Clothes
• Sporting gear and accessories
• Books and reading materials
• Gadgets and electronic devices
• Home appliances
• Musical instruments
• Furniture pieces
• Toys and collectibles

The idea is plain and simple: you sell a good or item you no longer need, and someone buys it for its perceived value. A perfect example is selling your preowned Rolex watch, while someone has always wanted to purchase this item at a lower price.

However, there is more to reCommerce than meets the eye. It aligns with the sustainability concept of "doing business without negatively impacting the environment, community, or society as a whole."

Think of the 3Rs as sustainable business practices: reduce, reuse, and recycle. Instead of throwing goods or items into landfills, why won't you refurbish and resell them? Chances are, others might need them for their personal use or consumption.

There's no denying the rise of reCommerce on digital platforms. According to MarkNtel Advisors, its global market could hit a compound annual growth rate (CAGR) of 19.22% from 2023 to 2028. 

Learn more about the monetary benefits of reCommerce to sellers and consumers in the next section.

The Financial Benefits of ReCommerce for Businesses and Consumers

The reCommerce market offers tons of potential benefits to both sellers and buyers. Their reasons for participating in the reCommerce market revolve around economic considerations and environmental protection.

Retail or e-commerce companies sell secondhand products to keep up with sustainability. About 93% claim that when selling pre-owned items, sustainability is either "very" or "somewhat" important to them.

On the flip side, customers buy pre-owned goods or items to reduce costs: 78% buy to bargain, 58% to avoid inflation, and 34% to sustain a budget lifestyle.

Source: https://codup.co/blog/recommerce-market-opportunities/

Below are the potential benefits of reCommerce for businesses and consumers:

For Businesses

Here's how reCommerce proves beneficial to business owners and solo entrepreneurs:

1. Income generation: From a business perspective, reCommerce gives you a new stream of income. You can sell used, reconditioned, and even excess products stocked in your warehouse to make more money rather than disposing of them. Not only are you boosting their lifecycle worth, but you are also tapping into an emerging and rising market.

2. Cost reduction: ReCommerce not only lets you generate income, but it also helps you reduce expenses. How? You can reuse and repurpose your excess materials and waste products into something worth selling. This strategy optimizes your resource consumption and allocation by minimizing the need for raw materials and lowering your overall expenditures.

3. Market expansion: As mentioned, reCommerce is a growing and promising market for consumers seeking low-cost, high-quality secondhand goods. As a business owner or seller, what better way to create a new income source than to capitalize on this market? With this in place, you can attract and win new customer segments who value affordable and sustainable products. Add secondhand products to your e-commerce ideas and retail products!

For consumers

Here's how reCommerce greatly benefits interested buyers and consumers in general:

1. Cost savings: As consumers, we cannot ignore the rising costs of products due to increasing inflation. That's why it's now easy to see many households cut costs and participate in the reCommerce market. The proof is in the numbers: 57% of all buyers and 64% of Generation Z regard cost savings as their top reason for participating in reCommerce.

Source: https://static.ebayinc.com/assets/Uploads/Documents/eBay-Recommerce-Report-Highlights-2022.pdf

2. Value retention: ReCommerce doesn't only apply to sellers when it comes to prolonging the product's lifecycle. It also extends to buyers who keep the value of their purchases by reselling products they no longer need. This resale potential enables them to recuperate a percentage of their initial investment, making their buying more effective and sustainable. That's why it's easy to see individuals sell secondhand products on Google Shopping, e-commerce platforms, and even social media channels.

Jonathan Feniak, General Counsel at LLC Attorney, emphasizes the need for reCommerce for value retention.

Feniak continues, “It's legal to sell preowned products or used products as long as sellers are transparent about what they sell. However, comply with relevant laws and regulations, such as consumer protection laws, product safety and standards, and e-commerce regulations. The reCommerce market extends the value of products among different consumers. This value retention improves financial efficiency and promotes a circular economy.”

3. Customer satisfaction: ReCommerce improves client pleasure by offering access to a diverse range of unusual, high-quality, and frequently historical products unavailable in regular retail. This varied selection enables customers to choose things that exactly match their interests and needs, resulting in a more satisfying shopping experience.

Best Practices for ReCommerce Sellers and Top Tips for ReCommerce Buyers

Due to its monetary benefits, it makes sense for businesses and consumers to invest in or capitalize on the reCommerce market. That's why it's easy to see online marketplaces like Temu, Shein, and TikTok shops and social commerce on popular online channels such as Facebook, Instagram, X, YouTube, and LinkedIn.

In fact, the reCommerce market is ever-growing and ever-expanding. The DeliveryX Top1000 Europe Report cites that market growth and expansion are 16 times faster than traditional retail. Therefore, capitalizing on this market is best.

Grant Aldrich, founder of Online Degree, however, underscores the importance of education in reCommerce for both sellers and buyers.

Aldrich explains, “It’s crucial that we educate businesses and consumers about how to capitalize on the reCommerce market. The ultimate goal here is to promote sustainability while taking advantage of its monetary benefits. While buyers should be highly critical and selective in purchasing secondhand products, sellers should consider reutilizing and refurbishing products to regain their actual value.”

Below are best practices for businesses and practical tips for consumers.

For ReCommerce Sellers

Let's discuss some reCommerce best practices for businesses or solo entrepreneurs.

• Ensure product transparency. Be transparent about your goods or items when selling preowned or refurbished products. Have accurate and detailed product descriptions to set proper expectations and establish consumer trust.
• Set fair and reasonable pricing. It won't hurt to perform due diligence to determine the prices of goods or items. However, price your products by striking a balance between their market value and actual conditions.
• Perform product refurbishments. It's best to refurbish or improve your goods or items before putting them out on the reCommerce market. This way, you can reduce the chance of selling low-quality or substandard products.
• Streamline logistics concerns. Aside from the products themselves, manage your logistics, from warehouse management to package delivery. Stay on top of things like product returns, refurbishment, and shipping efficiently and effectively.
• Promote sustainable practices. ReCommerce aligns with business sustainability. Implement sustainable practices when selling used goods or items. Otherwise, participating in the reCommerce market defeats the purpose.

For ReCommerce Buyers

Let's tackle some reCommerce best practices for interested buyers or supporters.

• Conduct market research. As a buyer, perform due diligence to know the market value of certain products, even secondhand ones. Doing so will allow you to compare actual prices and give you an idea of how much you can save on certain goods or items.
• Examine products carefully. When certain products catch your attention and interest, it won't hurt to check them critically. Read the product descriptions and send valid inquiries before making product purchases. That way, you know what to expect.
• Pay close attention to pricing. Of course, the prices should matter the most when buying secondhand goods or items. If you had enough money, you could have opted for brand-new products in the first place. The reCommerce market aims to help you save money!
• Balance quality and affordability. But speaking of prices, you must strike a balance between the two. While you plan to buy affordable products, you don't want to compromise their overall quality. Make sure the actual prices reflect the actual conditions of goods or items.
• Buy from reputable vendors. Even if you're just participating in the reCommerce market, it's best to buy secondhand products from reliable sellers. Do a little research by examining their credentials, checking online reviews, and reviewing testimonials. That way, you'll get exactly what you deserve!

Digital Tools and Platforms To Use for ReCommerce

In today’s business landscape, the reCommerce market should ‘go digital.’ It’s best to promote and sell secondhand products via e-commerce platforms. Don’t worry; digital tools and technologies are readily available, allowing you to manage your goods or items.

But when choosing a reCommerce platform, there are a few factors to keep in mind. Consider the vendor or service provider, pricing structure, and, more importantly, their key features:

• Does it allow you to manage product information and customer data all in one place?
• Does it offer analytics tools for data analysis, sales forecasting, and business reporting?
• Is it easy to integrate with other digital tools or platforms?

Of course, there are various technologies you can invest in. But if you’re clueless, here are some you might want to consider for reCommerce:

• SAP Commerce Cloud: This e-commerce platform offers customers an omnichannel shopping experience designed for businesses of all sizes (small, medium, or large). It offers platforms for merchandising or marketing, product cataloging, and order processing. Its goal is to help B2C and B2B companies boost customer satisfaction, sales conversion, and order values.
• OXID: This e-commerce platform is best for complex integration projects for both B2C and B2B clients. It offers storefront design tools as well as advanced features like product visualization, personalized recommendations, and content management. It’s one of the leading e-commerce software providers in the German-speaking region.
• Spreadshop: This e-commerce platform is a full-service online store designed to produce and promote merchandised products. It lets you take care of almost everything, from order processing to logistics and printing to customer service. With a mobile app feature and secured payment methods, this platform is best for content creators, companies, and organizations.
• Sana Commerce This product is a Software-as-a-Service (SaaS) and Enterprise resource planning (ERP) platform for e-commerce businesses. It automates processes and optimizes the customer experience (CX) to help boost your return on investment (ROI). A certified SAP and Microsoft Gold partner, this platform has about 1,500 partnered online stores across the globe.

Final Words

ReCommerce is indeed an economical market that generates profits and reduces costs. While it allows businesses to make extra cash, it also helps consumers save money by purchasing secondhand products. So whether you're a seller or buyer, capitalize on the reCommerce market in today's business landscape.

However, consider the sellers' best practices and buyers' top tips recommended above. As a business, ensure product transparency, fair pricing, quality items, optimized logistics, and sustainable practices. Meanwhile, study the market, examine products, check prices, weigh quality/affordability, and purchase from reliable sellers.

Ultimately, reCommerce allows both businesses and consumers to reap tons of financial benefits—make the most of this market!