Team @ Beni
- Aug 23, 2021
- 3 min read

Reduce, Reuse, Re-commerce

Broadly speaking, we use the term “re-commerce” to refer to circular business models in which previously owned, new or used products are sold through physical or online distribution channels to buyers who reuse, repair, and/or resell them. In our case, we often also include rental models under the broader re-commerce market. Additionally, we do not include textile recycling as part of re-commerce. We often use the term re-commerce to refer to the market generally, and secondhand or resale to describe the action and items being traded specifically though selling previously owned clothing. These models may also be referred to as consignment, pre-owned, pre-loved, or thrift.

Trading clothing and goods through circular business models is of course not new (buying a bunch of new clothes is, in fact, much more novel). As the Business of Fashion puts it: “Secondhand fashion has existed for decades, primarily in thrift and vintage stores, but the advent of online resale platforms has led to a step change in how used items can be bought and sold. Since 2019, there have been at least 13 new resale entrants, 6 new resale-as-a-service launches and 14 major brand partnerships. More brands and retailers are exploring their own resale strategies to attract new customers and become more sustainable. But with just a small proportion of resale-able fashion being tapped into by consumers, brands and retailers will increasingly seek to actively manage resale as a key retail channel.”

This resurgence of re-commerce models has been fueled both by improvements in technology and operations as well as an increased demand from shoppers looking to reduce the impact of their closet on their wallet and the planet!

Market Segmentation

There are two primary operational structures within re-commerce:

Managed marketplace in which inventory is centrally aggregated before being resold. In this model, inventory could include donated items, items sold upfront by the original owner (i.e. the original owner sells the item for a specific price and the reseller takes full ownership and entire margin from reselling), or items that the original owner is selling on consignment through the reseller (i.e. the original owner gets a % of the sale once it is sold, and may be returned to the original owner if not sold. In come cases, the reseller will repair or clean the items they receive before reselling.
Peer-to-peer marketplace in which inventory is sold directly from individual sellers to buyers. Sellers can be individuals or semi-pro sellers (i.e. boutiques who sell on a P2P site). When sold on a platform like Poshmark or Ebay, the platform takes a % of the selling price and the seller receives the rest.

There are also a growing number of “Resale-As-A-Service” (RAAS) companies that provide technology or services to support re-commerce. RAAS is a newly coined term to describe businesses that offer the white label or co-branded resale platforms and tools to other brands. Typically, the RAAS partner is focused on managing the operations and reverse logistics of a recommerce marketplace, while the brand is still responsible for customer acquisition.

Here is a list of our favorite re-commerce platforms, a go-to guide created by Beni!

Market Size

According to thredUP and GlobalData, the secondhand market is projected to double in the next 5 years, reaching $77B and making it the fastest growing segment of retail!

Source: thredUP

The growth in the market is fueled by increased openness and engagement with the both the buy and sell side. Research shows that 76% of people who have never resold clothing are open to trying it. Of the 80-86% are open to purchasing, 30 - 56% have ever purchased secondhand.

🔥 Hot Takes

There is still a lot to do in order to make re-commerce the norm, specifically with regard to customer experience. As the Ellen McArthur foundation stated “by putting customer experience first and making resale models convenient and accessible, resale could become a new norm.”
Authentication continues to be a key operational bottleneck and point of differentiation for luxury and collectibles businesses like StockX and The RealReal. (← Use our affiliate link!)
There are also a few startups popping up focused on using AI for authentication!
“As circularity grows, digital enablement will be critical. As the traditional linear fashion value chain transitions into a circular system, consumers will be incentivized to engage beyond an initial purchase in order to engage in circular business models, which in turn will support data collection that can shape a brand’s business going forward.” (State of Fashion)