What is re-commerce?
There is a new type of business model sweeping Australia and the world – yet, ironically, it involves the exchange of things that aren’t new.
It’s called re-commerce.
Re-commerce refers to the repairing and restoring of pre-owned and pre-loved items (such as clothes) and then reselling or renting them through online sites and marketplaces to people.
Previously the domain of C2C markets, charities and second-hand ‘op-shops’, brands are quickly awakening to the sheer opportunity of getting involved in re-commerce.
So, if you’re a brand that’s in the eCommerce, FMCG or retail space, you don’t want to miss this. Here’s what businesses need to know about re-commerce.
What is re-commerce?
Re-commerce is a growing commercial trend in which people buy and sell used items instead of purchasing new ones. This can include the resale or renting of individual items from clothing to electronics through online platforms.
Re-commerce is driven by a variety of factors, including concerns about the environmental impact of consumerism and the desire to save money by purchasing or renting previously used or owned products at a more affordable price.
As Rntr’s founder, Shanya Suppasiritad says:
“One person’s discard is another person’s desire, and a brand’s profitable way to diversify.”
How does re-commerce work?
The process of re-commerce typically involves the following steps:
1. A business reacquires a pre-owned product, either by purchasing it from someone else or by receiving it as a return.
2. The product is inspected and possibly refurbished or repaired to ensure that it’s in good condition.
3. The product is priced and listed for sale or rental on a re-commerce platform or in a re-commerce store.
4. A buyer purchases or rents the product.
5. The product is picked up or shipped to the buyer.
6. This process repeats over and over again (called ‘the circular economy’, explained more below)
Why should product brands consider the re-commerce market?
Also referred to as the ‘re-economy’ and ‘secondary market’, re-commerce offers a range of product brands, from fashion to FMCG and retail, a huge opportunity to revolutionise their current linear approach, where natural resources are extracted, manufactured into products, used by consumers and then disposed of in landfill.
This linear approach is a very limited business model.
Re-commerce replaces this by giving brands the opportunity to step into the ‘circular economy’ where products remain in use and revenue-generating for as long as possible by being mended, repaired, rented and resold.
Currently, the growing re-commerce market is managed primarily by third-party platforms, leaving brands out of the profits with no control over the brand experience. However, B2C re-commerce platforms like Rntr. allow brands to claim their stake of the market.
To learn more, see How Rntr. Works.
What are the business benefits of re-commerce?
Some of the potential benefits of re-commerce for businesses include:
Cost savings: By sourcing products from the re-commerce market, businesses can save money on the cost of purchasing new products, components or raw materials. This can be especially useful for businesses that need to purchase large quantities of a particular product.
Ongoing revenue sources: While the linear business model sells a product only once, the re-commerce approach allows a brand to resell or rent that same item over and over again.
Better sustainability: Re-commerce helps to reduce the negative environmental impact of consumerism by promoting the reuse and recycling of products. This can be attractive to people who value sustainability and can help brands promote their environmental credentials.
Increased customer satisfaction: Customers today are showing a greater appreciation and preference towards brands making a socially conscious effort. This can help businesses build loyal customer bases and increase customer retention.
Diversification of product lines: Engaging in re-commerce can allow businesses to offer a wider range of products to their customers, including pre-used, vintage or rare items. This can help businesses to stand out from their competitors and attract new customers.
Access to new markets: By participating in the re-commerce market, businesses can tap into new customer bases and potentially expand into new geographical markets, especially with more affordable product lines.
What are the types of re-commerce models?
Re-commerce involves either the resale of previously owned products or the rental of products.
The re-commerce rental business models include:
One-off rentals
Simply select products on your current e-commerce site you wish to rent out for customers so they can rent and return rather than buy.
Capsule Collection
Create curated looks or packages for up to 30-day rental periods.
Subscription
Implement an ongoing product rental subscription model.
The re-commerce resale business models include:
Ex-Rental Supply
Ex-rental items, returns, samples and other non-new inventory can be sold easily through your pre-loved resale platform.
Take Back
Customers log in and select an item from their order history or brand catalogue. Renewed products are listed on your site under resale and sellers return to your shop to use their credit.
Peer to Peer
Customers log in, select an item from their order history or product catalogue, and set the price. Brands only need to authenticate, review, and approve before the listing goes live on the brand site. Pre-owned items ship directly from seller to buyer.
How do businesses enter the re-commerce space?
Due to the growing billion-dollar global re-commerce market, brands are starting to invest in this space to gain more control over their second-hand products rather than leave it to individual customers to trade between themselves.
However, as many brands traditionally operate in a linear model, they lack the right infrastructure and therefore need to implement new processes, technologies, and structures to effectively participate in re-commerce.
This includes adjusting to receiving individual products back from the marketplace, rather than just distributing them to customers and then preparing them for resale after checking their condition.
This involves a transformation of your current business approach. However, with Rntr., it’s not only possible - it can also be very profitable as well.
Rntr. can help you tap into the re-commerce market
Adopting a re-commerce model as a brand requires some form of business model transformation.
If you would like to explore ways your brand can easily adopt this re-commerce model to hit revenue or sustainability goals, the team at Rntr can offer some guidance on how it can be done.
Connect with your brand’s re-commerce community direct from your own website.
We offer integrated full-service rental and resale solutions to help you achieve your revenue and sustainability targets.
Book a Demo of Rntr. and see it for yourself
Also… Our branded resale service will be launching soon!
Reach out to us to learn more about how we can help you improve your sustainability efforts while boosting revenue.