In an era where sustainability and smart shopping dominate consumer choices, recommerce has emerged as a powerful business model. But what exactly is recommerce, and how does it differ from traditional retail?
Re-commerce, short for reverse commerce, refers to the process of selling pre-owned, refurbished, or secondhand goods through both digital and physical retail channels. It includes resale, buy-back programs, trade-ins, rentals, leasing, and subscription models. This approach allows businesses to extend product life cycles, reduce waste, and meet growing consumer demand for sustainable shopping alternatives.
Recommerce is more than just a trend — it’s a shift in how businesses and consumers approach product ownership. The recommerce market is expected to grow 55% by 2029, reaching $291.6 billion. Key factors driving this shift include:
Unlike traditional commerce, which follows a linear model (produce, sell, dispose), recommerce operates within a circular model — products are reused, refurbished, and resold. This system minimizes waste, maximizes value extraction, and creates new revenue streams for retailers.
There are many forms and types of recommerce retailers can integrate into their operations. Here’s a breakdown of the core models:
Retailers that focus entirely on selling second-hand products sourced from consumers, donations, and secondhand wholesale form the backbone of the recommerce industry. These businesses specialize in reselling pre-owned products, often curating and authenticating products to provide consumers with high-quality and affordable alternatives to new items. Traditional resellers operate across various models, from thrift and consignment stores to luxury resale boutiques, each serving a distinct customer base and product category.
Thrift stores and vintage resale shops offer a diverse selection of secondhand fashion, furniture, baby clothes, and collectibles. These stores cater to budget-conscious shoppers and sustainability-focused consumers who seek unique, affordable, and environmentally friendly alternatives to fast fashion and mass-produced goods.
Consignment shops operate on a different model where individuals sell their items through a retailer, sharing profits once the item is sold. This model allows sellers to earn from their pre-owned goods while enabling retailers to offer an ever-changing inventory without upfront purchasing costs.
Pawn shops and instant buyback stores provide quick cash offers for used goods, often specializing in electronics, jewelry, and high-value items. These businesses assess an item’s condition and resale potential, offering immediate payments to sellers and reselling the items at a profit.
Luxury resale and authentication-based stores cater to high-end consumers looking for authenticated secondhand designer fashion, accessories, and other luxury items. These platforms, often both online and physical, use authentication services to ensure product legitimacy and maintain consumer trust.
Retailers can choose between brick-and-mortar locations and online-only resale models. Physical stores allow customers to inspect items before purchasing, while online platforms allow for broader market reach, seamless transactions, and AI-driven pricing algorithms.
Branded recommerce allows retailers to reclaim their previously sold products by purchasing them back, refurbishing them, and reselling them on their platforms or through third-party sites. This model creates a controlled and profitable secondary market, allowing brands to maintain product integrity, enhance sustainability efforts, and increase customer loyalty by keeping pre-owned goods within their ecosystem.
Retailers can operate branded resale in several ways. Some choose to sell directly on their own platforms, offering refurbished and secondhand products alongside new inventory. Others collaborate with established resale marketplaces like eBay, The RealReal, and Vinted to expand their reach. Additionally, brands may integrate peer-to-peer (P2P) resale support, enabling customers to resell their used goods within the retailer’s own ecosystem, with the brand acting as an intermediary for authentication and logistics.
Technology is crucial in branded resale because seamlessly integrating recommerce operations into an existing business can be pretty complex. Automated resale pricing helps retailers set competitive yet profitable prices based on demand, product condition, and historical sales data, ensuring maximum value for both the brand and customers.
Trade-in programs are an essential part of recommerce, providing retailers with a steady stream of used inventory while offering customers incentives to return their old goods. The model works so customers exchange old products for store credit, discounts, or cash. These programs are structured to benefit both parties, making them a win-win solution for businesses aiming to promote sustainability and profitability.
Retailers implement buy-back programs for products that still have a resale value or can be reused as materials or spare parts. Instant buy-back programs allow customers to receive a direct payment upon returning their items, while credit-based trade-ins provide store credit for future purchases, increasing customer retention and loyalty. This model encourages repeat business while ensuring valuable inventory stays within the retailer’s ecosystem.
The valuation of trade-in products is often determined by condition-based pricing. Items are assessed and categorized into different condition tiers such as "new," "like-new," "good," or "fair". This structured approach helps retailers manage pricing and set appropriate resale values, making the process transparent and reliable for customers.
To further enhance customer participation, some retailers engage in multi-brand trade-in collaborations. These partnerships allow customers to trade in products from various brands at a single retailer, making it easier and more convenient for consumers to participate in the circular economy. This strategy broadens the retailer’s inventory while offering customers greater flexibility.
Trade-in programs can be executed through multiple channels, offering customers a choice between in-store trade-ins and online trade-ins. In-store trade-in programs provide customers with the convenience of immediate transactions, while online trade-ins leverage reverse logistics to process returns and resale remotely. Digital trade-ins enable a broader audience to participate, helping retailers expand their reach beyond physical store locations.
Expanding from traditional ownership-based sales models to access-based models allows consumers to rent products instead of purchasing them outright. This shift benefits retailers and customers, providing flexible options for short-term use, making high-value products more accessible, and increasing foot traffic to retail stores (meaning more customer visits) while promoting sustainable usage patterns.
Short-term rentals cater to customers who need products for a limited period, such as fashion, tools, outdoor gear, and event equipment. These rental services provide consumers access to high-quality items without the commitment of ownership, reducing waste and promoting a more sustainable economy.
For longer-term needs, long-term leasing options are available, allowing consumers to rent furniture, technology, and heavy equipment on a monthly or yearly basis. This model is especially beneficial for businesses and individuals who require ongoing access to expensive products without making a large upfront investment.
Another variation is the rent-to-own model, where customers initially rent a product but can purchase it over time. This model makes ownership more achievable for budget-conscious consumers while ensuring that the retailer continues to profit from the item's extended lifecycle.
Businesses also benefit from rental solutions through corporate and B2B rental programs, where companies can rent bulk equipment such as office furniture, industrial tools, and machinery. This approach allows companies to scale operations efficiently, avoiding large capital expenditures and keeping operational costs flexible.
Product subscriptions generate recurring revenue by granting consumers access to products instead of requiring full ownership. This model appeals to customers who value flexibility, affordability, and sustainability while providing businesses with a steady income stream. The subscription model has gained traction across various industries, including fashion, electronics, and children's products.
One approach is fixed subscriptions, where customers subscribe to a single product for a set period. This model is particularly effective in the tech and electronics industry, where consumers prefer to upgrade their devices regularly without purchasing them outright. By subscribing to a product, users get access to the latest technology while companies maintain a consistent customer base.
Another variation is flexible or rotating product subscriptions, where customers receive a new selection of items at regular intervals. Fashion subscription services, such as Rent the Runway, allow users to swap their wardrobes every month, giving them access to high-end clothing without the commitment of ownership. Similarly, children’s gear rotation services enable parents to exchange toys and baby products as their children grow, ensuring they always have age-appropriate items without unnecessary clutter.
Membership-based rentals take a different approach by offering VIP access to an inventory of rental items. This model allows customers to rent products on-demand while enjoying exclusive benefits such as discounts, early access to new inventory, or premium service. Membership-based programs are popular in outdoor gear, luxury fashion, and home furnishings.
A hybrid approach combines resale with subscriptions. Hybrid subscription-resale models allow customers to purchase used items at discounted rates after renting them. This strategy provides a revenue stream for businesses while allowing customers to keep items they’ve grown attached to.
Refurbishment and repair services are critical components of recommerce and the circular economy, ensuring that used products are restored to high-quality standards before resale. By extending the lifespan of products, retailers not only reduce waste but also create additional revenue streams from repair services.
Retailers may choose to establish in-house refurbishment centers, where they manage the entire repair and restoration process. This approach allows brands to maintain strict quality control, ensuring that pre-owned items meet brand standards before they are resold. In-house refurbishment also enables businesses to streamline operations and maximize the value of used inventory.
Alternatively, some retailers opt for outsourced repair services, partnering with third-party refurbishment providers to restore products. This strategy can be cost-effective for businesses that lack the infrastructure to handle repairs internally. By leveraging external expertise, retailers can efficiently scale their recommerce efforts while maintaining a steady supply of refurbished goods.
To encourage long-term product maintenance, some businesses offer repair membership programs. These programs provide customers with ongoing maintenance plans, enabling them to repair and restore their products instead of discarding them. Repair memberships align with circular economy principles by fostering product longevity, reducing the need for new production, and enhancing customer loyalty.
Recommerce is not a new thing. People have visited flea markets and organized garage sales for ages. Outside the consumer-to-consumer recommerce market, selling secondhand is gaining momentum as businesses recognize sustainable commerce models' economic and environmental advantages.
This evolution is driven by technological advancements, shifting consumer preferences, and increasing retailer adoption. As the landscape continues to change, several key trends are shaping the future of the secondhand market.
More retailers are incorporating resale, rental, and subscription models into their business strategies. Consumers are growing in preference for sustainable shopping options, prompting businesses to integrate circular economy principles into their operations. From small startups to major retail chains, the recommerce sector is witnessing an influx of innovative business models aimed at extending product life cycles and minimizing waste.
Recommerce is becoming more widespread as major brands such as Patagonia, IKEA, and Lululemon launch their own resale and buy-back programs. This shift indicates that companies increasingly recognize the importance of sustainability in driving consumer engagement and brand loyalty. By embracing recommerce, retailers can create new revenue streams while strengthening their commitment to environmental responsibility.
Technological advancements are revolutionizing the way businesses manage resale operations. Modern recommerce solutions include, for example, AI-driven pricing automation that enables brands to price secondhand stock competitively based on demand and product condition. Additionally, inventory management solutions with serialized asset tracking allow businesses to monitor the life cycle of individual products, improving efficiency in refurbishing and reselling. Integrations with existing commerce platforms on online stores also make it easier for retailers to implement recommerce strategies without disrupting their current workflows.
Shoppers increasingly prioritize eco-friendly options and recommerce services, making sustainability a key driver of recommerce growth. They actively seek brands that align with their values as they become more environmentally conscious. Businesses that adopt circular economy principles not only reduce their environmental footprint but also attract a loyal customer base that values sustainability.
Recommerce is reshaping the future of retail by extending product life cycles, reducing environmental waste, and unlocking entirely new revenue streams. At its core, it turns idle inventory and returned goods into fresh business opportunities — breathing new life into what was once considered a post-sale loss. For modern retailers, it’s not just a sustainability initiative; it’s a strategic growth lever.
There’s no one-size-fits-all approach to recommerce. There are various circular economy examples businesses can choose from — resale, buy-back, rental, subscription, or trade-in programs — depending on their product category, customer base, and operational capacity. This flexibility enables brands to test, scale, and adapt their strategy based on real-world results and consumer demand.
For retailers aiming to future-proof their business, now is the time to embrace recommerce. Integrating circular strategies, whether it’s through reselling returned items, launching a rental offering, or establishing a trade-in program, businesses can drive profitability while building stronger relationships with sustainability-minded customers.
TWICE Commerce makes it easy to turn recommerce ambition into action. With a platform purpose-built for circularity, we equip you with the tools to start small, scale fast, and grow sustainably.