Recommerce

Last updated September 25, 2023

Recommerce or reverse commerce is the selling of previously owned, new or used products, mainly electronic devices or media such as books, through physical or online distribution channels to buyers who repair, if necessary, then reuse, recycle or resell them.

History of the term
Different Types of Recommerce
Informal Market
Trade-In & Recommerce Services
Buy Back & Trade-In Offers by Vendors of new Products
Types of purchased products
The various marketing positions recommerce
Positive Impact of Recommerce
Environment
Consumer Purchase Power
The development factors
Issues of recommerce
References
See also
Related articles

History of the term

In February 2005, George F. Colony,^[1] the head of Forrester Research introduced the term recommerce in response to a question about the technology spending trends after the Dot-com bubble: "There's a lot of shelf-life issues out there. People are a couple of releases behind. Older PCs. There is a move to really go back to — we call it 'recommerce'. Instead of 'ecommerce', it's 'recommerce'". He said.^[2]

The term is now primarily used to describe businesses which resell used goods. Most of them focus on consumer electronics, such as smartphones, tablets, and notebooks. Physical media, such as books, DVDs, and Blu-ray discs are also significant.

While there have long been channels for selling used goods, such as garage sales and flea markets, online platforms such as eBay or craigslist allow individuals to sell used goods much more efficiently.

Beginning in the early 2000s, companies that professionalized the industry by offering professional buyback or trade-in schemes started to thrive: consumers could sell their old smartphones, TVs, or computers to offset the cost of a new one. This has been common practice with car sales for decades.

Companies such as Gazelle, Rebag, and ThredUp started in the 2000s to offer purchasing and trade-in services completely separate from the purchase of new items and further spread the term.^[3] Soon after this, companies like SmartphonesPLUS, Amazon, and Walmart started their own trade-in programs.

Different Types of Recommerce

Informal Market

Consumers that sell used goods directly person to person (such as flea markets, garage sales or ad hoc) or via Marketplaces such as Amazon or eBay. Hereby some platforms such as eBay may hedge the risk of the payment for the consumer by providing payment tools such as PayPal or just offer the possibility to market the product such as craigslist.

Trade-In & Recommerce Services

An increasing amount of transactions occur directly via specialized service companies that purchase used goods, refurbish them if necessary and resell them subsequently. Such platforms often provide initial indications of the final purchase price for the good.

Most platforms assist the user during the transaction by offering following services:

An indication of the final purchase price to the owner of the product sold (often the final price varies as the consumer cannot verify to the full extend all determining factors of the product sold such as the quality of the battery of a smartphone during the process);
By organizing the logistical return of the product;
By controlling the product's condition in a specialized workshop;
By recycling the good if it can't be used anymore.

This kind of resale allows sellers to overcome some marketplaces drawbacks, by providing a means of simplified acquisition, and immediate and sometimes guarantied value.

Buy Back & Trade-In Offers by Vendors of new Products

Especially in the electronics sector the purchase and buyback of consumer electronics became very common in recent years. By today all major MNO offer Trade-In solutions combined or detached from the purchase of a new phone. Most of this services are offered by 3rd party refurbishing companies specialised in used electronics.

Mobile Operator	Offers Trade-In / Buy Back
AT&T	Yes, all major brands^[4]
T-Mobile	Yes, all major brands
Verizon	Yes, all major brands
Sprint	Yes, all major brands

Types of purchased products

Examples of the main assets of companies acquired by recommerce include:^{[ citation needed ]}

Consumer non-durables: disposable razors, jeans, corks, pantyhose, eyeglasses, watches
Cultural goods: books, CDs, DVDs
Jewelry: gold, silver
Technological devices: cellphones, smartphones, tablet computers, TVs, video game consoles, GPS devices, cameras, video cameras
Clothes & unwanted fashion items and accessories; handbags, small goods
Over the counter (OTC) medical supplies, particularly Diabetes testing supplies such as glucose test strips and lancets

Many ecommerce services have introduced recommerce solutions, including distributors, online retailers, and chain retailers.^{[ citation needed ]}

The various marketing positions recommerce

Multiple types of recommerce services are available:

Recommerce, used as a method of funding, which can compensate the seller in cash or with a voucher.^{[ citation needed ]}
Solidarity recommerce, the return of products by offering its holders an opportunity to share or redistribute the residual value with a non-profit organization or a social cause (e.g., micro-credit, or insertion).^{[ citation needed ]}
Ecological recommerce, the recycling or proper disposal of products with strong polluting capacity (providing repair or recycling regulatory compliance).^{[ citation needed ]}

Positive Impact of Recommerce

Environment

Environmental reports by electronics manufactures show that the majority of natural resources for the production of such products are consumed during manufacturing and first transport of the product and not during the use of a product. In many cases the reuse of such a good is significantly more beneficial than the pure recycling as eventual logistics and energy consumptions during the recycling don't occur and a used product can be resold instead of a new product being produced. The reuse of a product is an effective means of reducing products' environmental footprint.^[5]

Smartphone	Production	Logistics	Use	Recycling	Total Emissions
iPhone 6^[6]	85%	3%	11%	1%	95 kg CO2e

Consumer Purchase Power

The product holder increases its purchasing power to acquire a new product by selling back its old one.^{[ citation needed ]}

The development factors

Several factors have greatly accelerated the development of recommerce in developed countries, including:^{[ citation needed ]}

The demand for solutions enabling consumers to separate themselves ethically from their products,
The ease of use of recommerce services, and more importantly,
The preponderance of takeover bids, which handsomely compensate the owners of recommerce services.

In France, the rise of recommerce is partly supported by the "Grenelle II" Law, which states that when they are sold under the brand name of a single dealer, it must "provide or contribute to the collection, removal and treatment of electrical and electronic equipment waste instead of the person who manufactures, imports or brings in the domestic market (...) this equipment regardless of the selling technique, including distance selling and electronic sales".^{[ citation needed ]}

Issues of recommerce

Recommerce requires a special organization of many functions, such as: logistics management, information systems, customer relations, price control and treatment of the product in the shop, promotion, retention, and resale. Functional products recovered via recommerce solutions are usually put back on the market by the recommercer. Moreover, when this product exceeds local demand, recommercers sometimes turn to foreign markets to sell the products they have purchased. Thus, the recommercer sells some of these used functional products in emerging markets where access to technology and accelerating economic development are reserved for some part of the population.^{[ citation needed ]}

Related Research Articles

E-commerce is the activity of electronically buying or selling products on online services or over the Internet. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. E-commerce is the largest sector of the electronics industry and is in turn driven by the technological advances of the semiconductor industry.

Shopping is an activity in which a customer browses the available goods or services presented by one or more retailers with the potential intent to purchase a suitable selection of them. A typology of shopper types has been developed by scholars which identifies one group of shoppers as recreational shoppers, that is, those who enjoy shopping and view it as a leisure activity.

<span class="mw-page-title-main">Consumer electronics</span> Electronic products for everyday use

Consumer electronics or home electronics are electronic equipment intended for everyday use, typically in private homes. Consumer electronics include devices used for entertainment, communications and recreation. Usually referred to as black goods due to many products being housed in black or dark casings. This term is used to distinguish them from "white goods" which are meant for housekeeping tasks, such as washing machines and refrigerators, although nowadays, these would be considered black goods, some of these being connected to the Internet. In British English, they are often called brown goods by producers and sellers. In the 2010s, this distinction is absent in large big box consumer electronics stores, which sell entertainment, communication and home office devices, light fixtures and appliances, including the bathroom type.

A reseller is a company or individual (merchant) that purchases goods or services with the intention of selling them rather than consuming or using them. This is usually done for profit. One example can be found in the industry of telecommunications, where companies buy excess amounts of transmission capacity or call time from other carriers and resell it to smaller carriers.

Used goods, also known as secondhand goods, are any item of personal property offered for sale not as new, including metals in any form except coins that are legal tender, but excluding books, magazines, and postage stamps. Used goods may also be handed down, especially among family or close friends, as a hand-me-down.

Resale price maintenance (RPM) or, occasionally, retail price maintenance is the practice whereby a manufacturer and its distributors agree that the distributors will sell the manufacturer's product at certain prices, at or above a price floor or at or below a price ceiling. If a reseller refuses to maintain prices, either openly or covertly, the manufacturer may stop doing business with it. Resale price maintenance is illegal in many jurisdictions.

<span class="mw-page-title-main">Electronic waste recycling</span> Form of recycling

Electronic waste recycling, electronics recycling ore-waste recycling is the disassembly and separation of components and raw materials of waste electronics; when referring to specific types of e-waste, the terms like computer recycling or mobile phone recycling may be used. Like other waste streams, re-use, donation and repair are common sustainable ways to dispose of IT waste.

B2B e-commerce, short for business-to-business electronic commerce, is the sale of goods or services between businesses via an online sales portal. In general, it is used to improve the efficiency and effectiveness of a company's sales efforts. Instead of receiving orders using human assets manually – by telephone or e-mail – orders are received digitally, reducing overhead costs.

A marketing channel consists of the people, organizations, and activities necessary to transfer the ownership of goods from the point of production to the point of consumption. It is the way products get to the end-user, the consumer; and is also known as a distribution channel. A marketing channel is a useful tool for management, and is crucial to creating an effective and well-planned marketing strategy.

Green market products are previously owned products that have been previously used and put back into productive use. These products are often repaired, refurbished and recycled by brokers, resellers or the original manufacturer. They are suitable for resale to customers as a lower cost alternative to buying new goods from standard distribution channels.

Refurbishment is the distribution of products that have been previously returned to a manufacturer or vendor for any reason, not sold in the market or new launch of a product. Refurbished products are normally tested for functionality and defects before they are sold to the public. They are repaired by the original manufacturer and resold.

Household goods are goods and products used within households. They are the tangible and movable personal property placed in the rooms of a house, such as a bed or refrigerator.

Customer to customer markets provide a way to allow customers to interact with each other. Traditional markets require business to customer relationships, in which a customer goes to the business in order to purchase a product or service. In customer to customer markets, the business facilitates an environment where customers can sell goods or services to each other. Other types of markets include business to business (B2B) and business to customer (B2C).

Collaborative consumption is the set of those resource circulation systems in which consumers both "obtain" and "provide", temporarily or permanently, valuable resources or services through direct interaction with other consumers or through a mediator. It is sometimes paired with the concept of the "sharing economy". Collaborative consumption is not new; it has always existed.

Mobile phone recycling describes the waste management of mobile phones, to retrieve materials used in their manufacture. Rapid technology change, low initial cost, and planned obsolescence have resulted in a fast-growing surplus, which contributes to the increasing amount of electronic waste around the globe.

Customer cost refers not only to the price of a product, but it also encompasses the purchase costs, use costs and the post-use costs. Purchase costs consist of the cost of searching for a product, gathering information about the product and the cost of obtaining that information. Usually, the highest use costs arise for durable goods that have a high demand on resources, such as energy or water, or those with high maintenance costs. Post-use costs encompass the costs for collecting, storing and disposing of the product once the item has been discarded.

E-commerce or electric commerce in Southeast Asia is the buying and selling of products and services over the internet in the countries of Southeast Asia. These practices reached Southeast Asia during the dot-com mania in the 1990s. After the dot-com bust, local e-companies have seen promising growth in this sector.

NextWorth Solutions, Inc., was an electronics trade-in and recycling service. Users of the service exchange used electronics for cash or discounts on newer models. NextWorth was founded by business students at Babson College in 2005. It started as a commission-based service to help businesses setup online auctions for their used items, then changed its business model to focus on electronics trade-ins in 2006. As of late 2012, NextWorth was one of the best-known and largest electronics trade-in and recycling services in the United States, although it handles only a small percentage of total trade-in traffic.

uSell is a publicly traded recommerce company with headquarters in New York City. It operates as an online marketplace where people can sell used cell phones, tablets, video games, textbooks and gift cards to professional buyers.

There are many types of e-commerce models', based on market segmentation, that can be used to conducted business online. The 6 types of business models that can be used in e-commerce include: Business-to-Consumer (B2C), Consumer-to-Business (C2B), Business-to-Business (B2B), Consumer-to-Consumer (C2C), Business-to-Administration (B2A), and Consumer-to-Administration

References

↑ "As I.T. Goes, So Goes Forrester?". The New York Times. 18 February 2005. Archived from the original on 2018-06-13. Retrieved 2018-10-15.
↑ "As I.T. Goes, So Goes Forrester?". The New York Times. February 18, 2005. Archived from the original on April 7, 2018. Retrieved March 22, 2018.
↑ "Making 're-commerce' second nature". The Boston Globe. November 7, 2011. Archived from the original on November 7, 2011. Retrieved November 9, 2011.
↑ "AT&T; Trade-in". Archived from the original on 2018-02-22. Retrieved 2018-02-21.
↑ "Why You Should Buy A Second Hand Mobile Phone". Akoda. June 13, 2016. Archived from the original on August 9, 2016. Retrieved June 15, 2016.
↑ "N61_PER_v2" (PDF). Archived (PDF) from the original on 2017-09-22. Retrieved 2018-02-21.