Who would think the saying: “One person’s trash is another person’s treasure” could be the
impetus for a burgeoning business model?
“Recommerce”, or the reselling of once used merchandise through informal or organized online distribution channels has been the answer to that question for quite some time.
This type of business model has actually existed informally for a long time before the Dot Com burst of the ‘90’s, however it was that era that helped propel this business model into the digital and connected world at the time. To that effect, we saw the creation of online multi-vendor platforms such as eBay and craigslist where private users were empowered to resell their “junk” to any viable bidder with an internet connection.
Since then, companies have been built and have since thrived utilizing the recommerce business model. In the early 2000’s technology retailers were offering professional buyback or trade-in programs. Consumers would be able to trade in an old electronic device as a means to put credit towards another purchase of a newer device of the same category. Similar to trading in a car, more companies were implementing this credit program to drive sales and increase customer loyalty. Soon after, online stores, like Gazelle or NextWorth, popped up, taking a similar idea, but cashing out the sellers, and reselling goods for their own profit.
For the clothing and apparel sector, the implications of the recommerce business model have been especially lucrative. As of now, the secondhand retail apparel industry is worth about $20 billion dollars. Apparel recommerce brands have been benefiting from a consumer trend to shop sustainably, and now leading clothing brands are noticing the same trend.
These clothing brands are tapping into secondary markets, to reap the benefits of their apparel being resold on the third-party recommerce sites. As a result, some of the leading recommerce platforms have developed new programs to partner with these brand companies as a initiative to mutually benefit from the consumer base of both sectors.
There are four online Recommerce platforms responsible for revolutionizing the way the industry works: thredUp, Yerdle Recommerce and The Renewal Workshop. Each of which, have implemented new ways to partner with brand companies, and generate lasting and effective programs to increase sales for both recommerce platforms and brand apparel companies.
thredUP’s Loyalty Programs
Loyalty programs have proven to be good for business, and in this case good for the environment. thredUP, one of the biggest Recommerce companies on the web has implemented a loyalty program that gives consumer sellers the option to get paid out with a additional 15% if they opt into receiving a gift card in the brand seller’s name. This type of partnership is especially lucrative because customer loyalty brings in more sales over a longer period of time. There isn’t quite a better return on gifting a little extra to bring in a customer that lasts a lifetime.
Yerdle Commerce’s White-Label Service
Yerdle Commerce has put in place a “white-label service” for apparel retailers where these retailers can manage their own recommerce stores through the Yerdle-owned platform. This tactic empowers brand name retailers to use the Yerdle platform, while seemingly acting independent but reaping the benefits of Yerdle (one being used-clothing repair). Yerdle understands that certain consumers might have a taste for brand name apparel but without the means to afford it. While the platform itself is generating sales and promoting their mission secretly, brand name apparel companies are generating sales in a market where they would not have originally thought they could tap into.
The Renewal Workshop’s Revenue Sharing Agreement
For stores like The Renewal Workshop, they offer a revenue sharing agreement with brand retailers that use their services and platform. The Renewal Workshop is a little different then Yerdle Commerce, in that while providing services to repair, clean and conduct quality assurance they allow retailers to either sell on the Renewal Workshop platform online or resell items in the Brick and Mortar location. Apparel brands first pay a “processing fee” and are free to choose how to sell the goods. (As a bonus, The Renewal Workshop provides ways for apparel companies to make clothing more durable, thus promoting their sustainability mission.) Although brand name’s aren’t positioned as the direct seller such as with Yerdle Commerce, the partnership still provides exposure to consumers looking to buy high-end fashion in an affordable way, where brand name’s still gain a profit.
As these partnerships continue to benefit from one another, both entities will see the impact such sales have on the larger consumer trend that is moving toward sustainable consumerism. Tapping into this market trend can effectively secure profitable goals for years to come, as environmental consciousness increases. Even without tapping into the environmental movement of today, there are still consumers looking to buy brands they can afford at full retail value. Bottom Line: Now is the time for brand apparel retailers to grow their business through the help of online recommerce platforms.
References:
https://www.windowswear.com/4-companies-pioneering-the-clothing-recommerce-market-greenbiz/
