Think about how many new products are produced every year to satisfy customers. People want more, and they want to pay less, so more of these products are being created. Products are increasingly made with cheaper materials, ultra fast fashion is a thing, and Buy-it-for-Life is becoming a thing of the past (repeat purchases are money makers). This is bad news for landfills, where 9.5 billion pounds of yearly waste is being thrown. That's almost 190 Statues of Liberty, straight to the landfills each year.
These items aren't the only thing contributing to waste, here's another big one: items getting returned. That's right, with the rate of returns increasing yearly, processing these returns is becoming expensive. So expensive that some companies can't justify the cost, leading to perfectly good products being discarded instead of being properly processed.
If only there was a way we could get these returned products into the hands of customers. Prevent them from going to landfills, and saving some money for the customer, while getting a return on the item. That's what Recommerce, short for "reverse commerce", is all about: getting these returned, refurbished, and overstocked items into the hands of demanding customers.
The rate of returns was 16.9% in 2024, with that number increasing every year. Unnecessarily returning items isn't a new concept. I remember when I was younger and my Mom would suggest buying something from Walmart, using it, and then returning. It didn't sit right with me, but at least it was harder to do back when most purchases were in-store.
The problem is, it's so easy to return things today thanks to sites like Amazon. This leads to increased Bracketing: buying multiple variants of an item with the intent to return the extras. 60% of shoppers admit to bracketing, which is staggering. There's roughly 273 million shoppers in the US, imagine 60% of them purchasing a single item along with two extras they eventually return. That's 3.2 billion returns being processed. I know this is really simple math and a lot of assumptions are being made, but that's a ton of returns being processed if those shoppers bracketed a single time. In reality, according to the same NRF report from above, US consumers returned $890 billion worth of merchandise in 2024.
It's estimated that nearly 80% of returned items are being discarded instead of processed, including items that are in a sellable state. How could this be? It mainly has to do with handling the enormous volume of returns.
The first reason is the cost of processing returned items. Processing a single returned item can cost up to 66% of its original price in reverse logistics, labor, and inventory loss. More employees are needed to handle the increasing demands of returns and the cost of labor cuts into profits. Companies may sprout a devils tail and horns by resorting to landfills in an attempt to save profit and appeal to shareholders. Sure, the consequences seem minor from the company's standpoint, but the world they live in will suffer over the long-term.
Another reason items get thrown away is to make room for more returned inventory. Storage space is finite, with the demand increasing as the rate of items produced and returned increases. If the storage space can't scale parallel with the amount of returns, pressure builds on warehouse owners and compromises are made which results in items being thrown away. Imagine you manage a third party logistics company and several new pallets of returns are inbound with no space for them. You either can't accept the inbound pallets, or must get rid of other pallets to make room. In some cases, throwing one of these pallets might be the only option for overburdened warehouses.
By normalizing Recommerce, we can eliminate the acquired biases people have with buying used. On websites with both new and used goods, buyers will normally opt for the new item over used or refurbished. This could be for many reasons: they could have been educated and influenced to only buy new, had a bad experience purchasing used, or the price difference wasn't worth the perceived risk.
There's a funny thing about people wanting items in pristine condition. They prefer a brand new item, yet they still equally value that same item after they've damaged it themselves. Think about phone screens. People will object to buy a new phone at a premium price instead of one with a hairline scratch, but will use their cracked and battered iPhone until it takes its last breath. This is simply a matter perception; a phone is still damaged whether they did it or someone else.Once these biases are dismantled and the barrier of entry is lowered, Recommerce can slow down the demand for new goods. It felt like a hurdle the first time I purchased used. I had to trust the buyer and the quality wasn't guaranteed. But after my first purchase, I felt great about how much money I saved. It made me want to find more used stuff to buy. If the majority of online shoppers went through this process, the demand for new items would begin to lower, leading manufacturers to rely less on consumerism and more on item quality and value.
The main challenge of recommerce is getting more people on board. This requires trust, accurate listings, easy to find items, and making the benefits for the environment known to buyers.
When it comes to building trust, transparency is key with accurate listings. Encountering a refurbished product which doesn't meet the standards of its description could make a buyer more reluctant to ever purchase another second hand item. Currently, listing goods is at the seller's disposal, with seller trust ratings as an incentive to list accurately. There may be other ways. Item conditions also have to be tested manually and recycled if they don't pass. This can't be fully automated yet, people still have to do the testing.
Another challenge is connecting buyers and sellers in the Recommerce system. It's tragic when buyers purchase new items simply because they can't find a repurposed version. The intent to buy used was there, but the item couldn't be found. This typically occurs since navigating the used market can be difficult for buyers. They have to scour multiple websites comparing prices, conditions, and seller ratings. Some of these websites aren't even well known, easily being missed.
Buying used and refurbished does come with a risk, but the benefits to saving the environment and your wallet are far greater. That's the point that needs to be driven. Marketing often hinges on the buyer feeling good about their decision, the same tactic can be used in a more genuine way for buying used items. When people become addicted to buying, they enjoy it but may feel guilty. If they become addicted to buying used, they won't have that feeling of guilt since they're reducing waste. In terms of marketing though, Recommerce is up against consumerism and the rigorous advertising of new goods. Companies have a direct incentive to market their goods since it affects their revenue, they barely benefit from used sales. We face a tough ongoing battle to change the common perception of buying used goods.
Today's biggest advantage in dealing with this issue is modern technology. Vendidit's tools were designed to eliminate complicated tasks that would once take up entire workdays, such as processing returns, keeping track of item storage locations, enriching item manifests, and finding buyers for these items. Eliminating these tasks allows more time to be spent testing and refurbishing the items.
Upstream was created to make the management of incoming items easier. It's an RMS that sits on top the WMS that 3PLs or warehouse owners can use to automate the processing and storing of inbound returns. Upstream's management tools ensure proper item handling and documentation, including taking photos of items if necessary. Items never get lost in the warehouse, and since items are triaged to their optimal sales channel, challenged inventory is unlocked.
GlobalSKU is our solution to dealing with incomplete manifests, building your own manifests for popular marketplaces, and enriching item listing data. If a warehouse receives a pallet of returns with a list of items lacking item details, an employee would have to spend hours identifying the item and filling out missing information while creating listings. GlobalSKU automatically takes care of all of that, so you can have the listings created before the shipment even arrives. It integrates directly with popular marketplaces such as eBay and Shopify, and is integrated directly to the Vendidit Marketplace.
Since GlobalSKU makes the listing process easy, its secondary goal is to help buyers become sellers. People have things laying around they don't use anymore. They can simply take a photo of it and GlobalSKU will gather all the data and create the listing for them. This helps foster increased transactions in the Recommerce space.
The Vendidit Marketplace was designed to connect buyers with the right sellers. Garage sales, estate sales, charity auctions, and flea markets have been around for decades; however, their existence in the physical world limits who can purchase from them. Oftentimes, a niche item might have an appropriate set of buyers who don't attend these events. Vendidit Marketplace aims to be the online hub for sellers who run these events to get their products seen by everyone, regardless of physical location. By making the listing process simple, people with busy lives can easily sell their unused items.
Recommerce is here to stay, and Vendidit's tools make the switch easier than ever. The next time you buy or sell, make it count for your wallet — and the world.