Swap meets, garage sales and flea markets have been around for decades and serve as marketplaces to extract value from old or unneeded goods. This recycling of products reintroduces them to the economy and extends their life.

Now, the informal nature of weekend markets has given way to sophisticated digital communities. Sites like eBay or Craigslist made it easier than ever before to sell an old table or clear out your attic. The second-hand market has only grown since then.

It’s now got a new name: recommerce.

What is Recommerce?

“Recommerce” comes from “reverse commerce,” or selling previously owned goods. This business model isn’t new of course — the practice goes back centuries — but lacked structure. Everything from art and luxury goods to farm equipment to baby clothes have been traded on an informal market.

Technology is providing structure, however. Commerce platforms that are easy to use and provide confidence in purchases are expanding the recommerce market significantly.

Spurred by the pandemic, the second-hand fashion market alone is expected to grow 127% by 2026, surpassing $200 billion in sales globally. In 2022 alone, growth is expected to hit 24%.

Recommerce has grown from a fun niche to be done on the weekends to big business.

How Does Recommerce Work?

The simple answer is: there’s not one way. On a macro level, recommerce means recycling old products that remain useful, providing a competitively priced option to buying something new. On the micro level, it gets more complicated and is unique in ecommerce.

What can be sold? Theoretically, anything that someone will pay for. This may be million-dollar construction equipment, luxury handbags or pogs (remember those?).

Products may be well used, barely used or even upcycled, which takes old items and turns them into something new, like turning glass bottles into a planter.

What types of products are typically sold through recommerce?

There are several key markets that are fueling recommerce growth, with new, emerging markets being added regularly.

Electronics

Refurbished or even broken electronics have long been a large marketplace. Some hardware manufacturers are even selling refurbished products directly to consumers.

Clothing

From luxury items to children’s clothes to vintage wear, apparel resale has become a significant industry.

Sporting goods

Shoes, golf clubs and weightlifting items are commonly found on the secondhand market, providing new life to products that may be just as good used as new.

Music gear

Amps, guitars, trumpets or other instruments maintain value well after they’re bought for the first time — and there’s always a market for bands looking to get started.

Jewelry

Diamonds are forever and so is the market for luxury jewelry. Watches, precious stones and even kitsch jewelry maintain heavy interest.

Where do recommerce products come from?

The recommerce supply chain may be considered “alternative.” There’s no single source of inventory and looking at recommerce as a traditional way of doing business is probably not the best approach.

The simple answer is recommerce goods come from anywhere and everywhere. They come from estate sales, businesses liquidating, trade-in and buy back programs or any number of sources.

There’s no one “right” way of compiling inventory. Vendors must find what they need wherever in the world they can find it.

What demographics are purchasing recommerce products?

Recommerce is still a developing industry that will continue to evolve. For now, though, there are definitely demographic trends to be aware of, especially as sustainability is one of the recommerce selling points..

One eBay report found that 80% of Gen Z respondents had purchased pre-owned goods in the previous year and 78% percent of millennials had. Both topped Gen X (75%), Baby Boomers (70%) and Post-War (62%).

Younger generations are also leading the way in selling. At 32%, Gen Z led the way with the largest percentage of sellers who started in the previous year. Buying second hand is becoming common with younger generations, who are more conscious about sustainability and cost.

Benefits of Recommerce

The recommerce economy has obvious benefits — and some not-so-obvious ones. By breathing new life into products and reselling, new markets are getting access to quality goods when they would have otherwise ended up in a landfill.

It’s sustainable.

The circular economy is designed to keep products in use and out of landfills. It reduces the stress of infinite demand for finite resources. By extending the life of common goods, the need to produce more is reduced. Recommerce actively supports the circular economy and resellers have an opportunity to establish themselves as a sustainable brand.

It can be cost effective.

Supporting recommerce is like shopping with a permanent coupon. Instead of paying a — sometimes wholly unnecessary — premium for new products, recommerce offers reduced costs by refurbishing goods that can fill the need of a new product just as well. With the cost of everything going up, pre-owned products help mitigate the impact of inflation.

It promotes recycling.

As mentioned above with the circular economy, there are finite resources on our planet, but the population is growing, as is the middle class in developing countries. The demand for products is only going up — as are emissions. Recycling and reuse is becoming a necessity to keep the global economy working.

Recommerce is a strong supporter of this. Resources extracted or harvested from the Earth need to maximize their lifetime value to continue human progress.

Challenges of Recommerce

As with any emerging industry, recommerce is still in the growth stage and prone to unique challenges. As maturity comes, some of these issues will be lessened. For the present, though, companies or individuals taking part in the recommerce market should be mindful.

Can have slim margins.

Pricing is difficult for recommerce goods and margins are usually a victim. With no formalized manufacturing process, it’s difficult to accurately gauge market value of an item. Well, other than “it’s worth as much as someone is willing to pay.”

How much is the time spent to secure an item? What is a company’s overhead? Does the procurement process cost money? These all play into pricing and for some businesses, can be difficult to measure.

Authentication of goods can be challenging.

One of the barriers for consumers to the recommerce economy is confidence in the products they want to purchase. Electronics must function as they should and clothes can’t be knockoffs.

There are third-party processes for authenticating items, but that takes time and reduces margins even further. Businesses WANT to ensure that the Louis Vuitton purse is actually Louis Vuitton or their Levi’s jeans are actually Levi’s, but proving it is a burden.

Competition from larger players.

As the recommerce industry has grown, enterprise companies have taken notice. Hardware manufacturers are selling refurbished laptops on their website and startups have hit it big focusing on the recommerce industry.

It’s become a crowded space, which makes it more difficult for new businesses to enter.

The Final Word

Recommerce is now big business and simply selling on eBay is significantly limiting your reach and ability to compete. Leveraging the ability to easily sell across marketplaces or locate and procure quality goods will enable even sole proprietors to thrive.

The recommerce marketplace is only going to get bigger. Being prepared now enables businesses to succeed in the future.

FAQs for Recommerce