Optoro, a reverse logistics technology company, says 9.6 billion pounds of landfill waste are generated by retail returns per year in the US alone. “On top of the lost profit, retailers who are part of this problem also have some serious explaining to do when it comes to their sustainability-minded customers.”
There are ways to get these unwanted products either back on the shelves or to customers who see it as a bargain. Optoro routes the items to stores to restock or transport them to a place for reselling on secondary markets.
ALSO READ: Preparing logistics for returned unwanted Christmas gifts
According to the Global Risk Management Institute, recommerce is expected to hit $64 billion in revenue by 2024. This means the market value has doubled in the last few years. Experts are attributing this to the rapid growth of businesses adopting recommerce strategies.
What is ‘recommerce’?
Think of thrifting, where shoppers buy expensive brand names at much lower costs. Recommerce is the logistical part of this process. It’s finding new homes for unwanted items. Previously owned items are sold through online marketplaces to buyers who reuse, recycle, or resell them.
Optoro uses BULQ, a wholesale marketplace that offloads unwanted inventory to resellers willing to pay a premium. “Maximize recovery through recommerce with proprietary pricing algorithms based on market demand and historical data, including exclusive eBay data.”
The logistics company says that through this process, there is also an increase in velocity with curated BULQ lots based on previous buying behaviors. Eager resellers will quickly jump on the opportunity to buy and sell on secondary channels.
Two types of ‘recommerce’
According to Tech Target, there are two types of recommerce. “Informal and formal markets are the original forms of recommerce and one widely adopted by consumers to sell goods directly in the secondary market.”
Before the digital revolution, flea markets or garage sales drove this reselling of unwanted items. The face-to-face sales boomed at certain times of the year. Digital marketplaces like Facebook, eBay, and Amazon provide platforms for resellers to find new homes for unwanted items. The price could be a premium if it’s antique, scarce to find, or the last stock from a high-in-demand item.
It can also be an excellent find for those who want a product that lost its value in dollars but is still usable for the next few years. These discounts can be seen as great finds for some customers.
TechTarget recommends these companies as resellers:
- DeCluttr
- Poshmark
- Mercari
- OfferUp
- thredUP
Payment processing is incorporated into these platforms.
Preventing returns
Business management solution Khaos Control has created a list of ways to reduce returns. Some focus on quality control, others on customer service and identifying those ‘serial returns.’
1. Make sure every product listed has high-quality images and descriptions.
2. Implement size guides and fitting tools.
3. Ask your customers for reviews and reward them for it.
4. Become a pioneer of outstanding customer service.
5. Get every order right the first time.
6. Prioritize your packaging.
7. Combat serial returners.
8. Make returns the best experience possible for your customers.
Implementing size guides and fitting tools will help minimize simple mistakes when ordering products, such as misjudging the size a customer intends to buy. Many customers return items after purchasing the wrong size. Adding a photo gallery or a product size chart can help a buyer make an accurate decision.
To get every order right the first time feels easier said than done. Right? Sending the wrong item to a customer is an obvious mistake that can slip in at any given point of the year (not only during those peak times).
“At least 30% of all products ordered online are returned as compared to 8.89% in brick-and-mortar stores,” says Khalid Saleh, CEO and co-founder of Invesp. Wrong items delivered to customers are a massive headache, with 23% of people listing this as the main reason for returning parcels.
Another deal breaker for customers is the packaging. This should not be an afterthought. Products that arrive broken or damaged are another primary reason for returns. Around 20% of customers return parcels for this reason alone.
Combating serial returners could save your company money and probably many future problems. Companies like ASOS are now targeting customers, taking advantage of the flexible return policies. Some customers use an item or wear a garment once before returning it. Shoppers deliberately return these offers to get a full refund.
Why companies consider recommerce
The financial and temporal implications of handling returned items underscore the significance of exploring alternative solutions. Embracing recommerce is an ideal strategy that offers an opportunity to repurpose extra inventory.
This approach mitigates losses and presents a viable means to generate revenue from existing stock.
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
