ReCommerce (also known as Reverse Commerce or Re-ecommerce or Reverse Marketplace) is a practice of purchasing and selling of old goods over an e-commerce platform set up just for this purpose.
Re-commerce companies actually buy the obsolete and undesired products, refurbish them, and reintroduce them in the market.
These companies have set standards for pricing and have designed software to determine product prices based on set metrics like age, wear and tear and market demand.
What is ReCommerce?
The development of technology has resulted in a decrease in the shelf life of many goods. To counter this, and to make profits through an entirely different business model, Reverse commerce model was introduced.
Reverse Marketplace is nothing but an online marketplace to sell old goods.
Business Model of Recommerce Companies
Re-commerce companies like Bundli(India), Cashify (India), Recommerce Solutions (France), Gazelle (USA), etc have recently introduced this new business model in the market.
These companies usually buy used goods and sell refurbished goods to earn profits.
These companies –
- Collect the obsolete and undesired products from the users and companies, and returned goods from e-commerce portals. (Products may or may not contain any defects)
- Sort them
- Repair them
- Repack them
- Make sure that these products work properly
- Sell them on Reverse Marketplaces or to the companies directly.
How is Reverse commerce Better than Online Classifieds?
Recommerce business model has an upper hand over online classifieds (like Olx, Quikr, eBay, etc.) as these companies actually buy the products of the users and not just provide a platform to sell.
Online Classifieds don’t guarantee the sale of the products while Reverse commerce has well-defined software to determine the price of the goods and guarantee the sale of the products around that predetermined price.
These companies act as middlemen who purchase goods from you before selling they reach to the ultimate user. Hence, privacy is maintained by keeping your personal details limited just to these companies and not everyone.
Logistics costs are also supported by e-commerce companies.
Benefits of ReCommerce Model
Re-commerce business model has a lot of benefits for the companies concerned and the users.
Guaranteed sale of used and obsolete products
Many users hesitate to buy expensive devices because of very less or no resale opportunities. This new business model has guaranteed the sale of their used and obsolete products and hence lured them to spend more and shift from online classifieds to Re-Commerce Portals to sell their used devices.
Recycled goods at Reasonable Price
These companies usually provide B2B solutions to operators, retailers and manufacturers or business-to-customer websites to final consumers who get these goods at a reasonable price.
Less wastage of resources
Reusing of goods increases their total shelf life and result in less wastage of resources.
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A startup consultant, digital marketer, traveller, and philomath. Aashish has worked with over 20 startups and successfully helped them ideate, raise money, and succeed. When not working, he can be found hiking, camping, and stargazing.
This is a one-of-a-kind article, thanks for sharing
I kind of like this whole thing of recommerce. This gives people an opportunity to buy things at a lower price from the market. The only concern here is that how real or how useful the bought things can be. Thanks for the post.
doesn’t explain how is it profitable especially when big ecommerce is bleeding cash. I got a quote of around 12k from Cashify for my 2 year old Galaxy S6. They have a dedicated team of people always appraising me of the pickup status. Heck! they have a full blown customer support team. If I add Rs. 500 for pick-up and handling, 1-3k for refurbishment of the handset and other costs associated with reintroducing to market and not to mention commission and profit, that brings it close to the range of new phones with updates specs such as A9 for example. Why would then someone buy an old phone when you have a nearly good new phone around the same price point especially when I technology everyone wants to have the latest and the greatest.
It is not only focused on selling the products as a whole again. The purchased model can be separated in the form of components such as Screen, Circuits, and IC’s which can be utilized after some calibration and repair. Local repair shops and Service centers could really use the cluttered components and the model is very scalable applying the right business tactics.