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Recommerce

What is recommerce and how does it work? Read more below.

In today’s world, recommerce is an enormously popular business, and you have almost certainly participated in it at one time or another, even if you aren’t aware of it. Recommerce, as opposed to e-commerce, is the resale of used goods so that they can be reused or repurposed by the buyer.

 

Recommerce has existed in the form of second-hand stores for a long time, but in today’s world, platforms such as eBay and Craigslist have made it an enormously popular and constantly expanding market. There are whole businesses that are focused upon recommerce, and only deal in used goods, especially when it comes to electronics.

 

ebay package

 

What Is Recommerce?

 

Recommerce is the business of re-selling items that have already been bought and sold once. Any second-hand item that gets resold is a recommerce item, and this industry spans products in every section of the market, including clothing, electronics, games, furniture, tools, ornaments, and more.

 

How Does Recommerce Work?

 

Almost any item can appear in recommerce, and in the past, collections have tended to be eclectic and varied. If you have ever been to a second-hand store or a yard sale, you’ll have seen how all kinds of different items get mixed together, and people just turn up hoping to see something that they like or score a bargain.

 

Now, however, recommerce is becoming more and more specialized, and many businesses focus on one area of recommerce, such as electronics. There are still sales of “everything” under the umbrella of one company, but this has some disadvantages for the seller, whereas specializing gives them a better understanding of their stock and customers.

 

A lot of recommerce is therefore tailored to one market. For example, you might find someone on eBay who only deals in old books, or someone who handles vintage clothing or even just second-hand clothing.

 

This ensures that the seller of the stock knows enough about it to a) be able to price it well, and b) be able to answer questions and ensure that the customers get what they need from their purchases.

 

With complicated items such as electronics, this trend is even more obvious. You will rarely see a non-specialist business handling electronics such as computers and gaming systems (although individuals do sell their own systems online). The more complicated the subject matter, the more likely the seller is to specialize in it.

 

craigslist page

 

What Are The Major Online Recommerce Platforms?

 

Recommerce has become enormous in the online space, and the biggest platforms include:

 

  • eBay (among the most famous and utilized)
  • Craigslist
  • Amazon
  • Depop
  • Etsy (for the resale of vintage items)
  • LetGo
  • Facebook Marketplace

 

There are many more, and some have international presence, while others are local. You can sell items from your home using them, or set up as a buyer and seller who purchases second-hand items and then sells them on again. Many people run small businesses – or even large businesses – using this method.

 

pros & cons of reselling online

 

What Are The Advantages Of Re-selling Online?

 

There are many advantages to re-selling online, rather than in a physical location.

 

Advantage One: Increased Access

 

Firstly, because the online space gives recommerce sellers so much more access to customers, both locally and nationally, it has made a massive difference to the ability to resell items that are no longer needed.

 

Whereas a garage sale needed to be well advertised and attended in order to have any hopes of success, an online site has access to people across the world.

 

Advantage Two: No Physical Site

 

Secondly, there is no need for a physical space in which large amounts of items can be displayed. A garage sale can happen outdoors if the weather is fine, but this is a precarious position that can lead to soaked goods and a ruined sale if you are unlucky.

 

Indoor spaces are often cramped or cost money to hire, which cuts into the profits and makes them less attractive. It’s possible to lose money if nobody attends.

 

Most online spaces only charge based on sales of items. It’s common for them to take around a ten percent cut, although some are higher, some are lower, and some charge no fee at all (such as the Facebook Marketplace). That means if your item doesn’t sell, you’ve only lost a bit of time and energy, and there is no financial hit.

 

Advantage Three: Indefinite Advertising

 

Selling online also removes the time limit usually associated with garage sales. A physical sale might last for a day or a weekend, and can be pretty exhausting for all involved.

 

This is less convenient for both the seller, who has to give up time to attend the stall even when they aren’t actively selling, and for buyers, who have to turn up within the window and browse through (possibly) hundreds of items to find something that they want.

 

In the online space, sellers can list an item and leave it there. They then don’t need to commit any further energy until the item is sold.

 

Buyers can “turn up” whenever it is convenient for them and either look through all the listings, or just search for the item that they want. They can also choose to search for recommerce sellers that deal in the particular things they are looking for, such as books or electronics, or search through everything.

 

Advantage Four: Better Pricing On Both Sides

 

Furthermore, buyers can compare prices and items more easily, and check whether the price is fair before paying it. Overall, this increases satisfaction rates.

 

On the flip side, sellers who utilize auction sites like eBay can make more money if they have multiple interested parties. Both sides are at an advantage at times.

 

Advantage Five: More Regulated Selling

 

This works for both the buyers and the sellers, although it tends to be more useful to buyers. The online space tends to have a mediator and more comeback if there is an issue. If you sell a faulty computer online, your buyer will likely be able to complain and get their money back, which might be challenging in a yard sale.

 

This can sometimes be a disadvantage to sellers, although most who want to build a reputable business this way are glad to refund the sale of a faulty item. It does also have a big advantage overall: it increases trust.

 

If a buyer knows that they can get a refund for an item that doesn’t work, they are more likely to pay for the item, rather than looking elsewhere. You can sell items with bigger price tickets without having to try to find ways for your customer to test them before they are willing to pay.

 

What Are The Disadvantages Of Re-selling Online?

 

Of course, re-selling online is not a perfect option, and there are some disadvantages to it.

 

Disadvantage One: Fees

 

One of the most obvious problems with online recommerce is that those providing the platform want a fee. This is also true of physical recommerce if you have to hire a space, but if you just hold a garage sale on your front lawn, the profit is all yours.

 

Online, you are often looking at a ten percent cut, which can be a lot if you sell expensive items or you want to set up a proper business in this way. Some retailers charge even more, or add on extra fees.

 

There are online platforms that do not charge fees, such as Facebook Marketplace, but these come with a lack of regulation and scams are commonplace online. If you want to set up a serious business, Facebook Marketplace is not particularly well geared to it, although many people do successfully operate there.

 

It’s a good idea to compare the fees of the various options and what they offer before you start selling items online. Some charge listing fees, which are upfront fees and charged whether or not you sell the item. Others only charge a fee when you sell the item, but this may be higher. You should also think about third-party fees, such as Paypal.

 

Make sure you choose a site that suits your needs if you are going to try getting into recommerce, and don’t just select the first one you find. You could actually end up losing money overall if you pay high fees on cheap items, so be cautious and calculate what you are going to earn before you list anything.

 

Disadvantage Two: Buyers Can’t Touch Items

 

Although the online space does allow for some amazing things, like videos of the product, there still is no “touch” factor, and this can be a huge issue for some items.

 

Things like clothing are particularly difficult to sell online because customers can’t try the clothes on. Sizing can be so varied that many buyers are reluctant to take a chance on something they cannot touch and try. A lot of people do still buy clothes online, but you may then have to deal with returns.

 

Disadvantage Three: Shipping Costs

 

The biggest and most obvious disadvantage of selling items online is that your buyer will need you to ship the item to them. This has an obvious cost, and although the buyer usually pays this, it can make an item unattractive because it drives up the overall price.

 

If you are selling lots of small, low value items, keeping your shipping costs down is likely to be a constant battle. You will also have to deal with the hassle of packing items, dealing with damaged or missing mail, and (often) covering the return costs for items that your buyers no longer want.

 

It’s important to think about your shipping policy in advance, and make it clear to buyers what circumstances you accept returns in. Will you allow them to return an item just because they have changed their mind, or only take returns for damaged/faulty goods?

 

Shipping is the biggest issue for most recommerce sellers, and it almost discounts the convenience of accessing a wider pool of buyers in some cases. You need to spend time working out what the best shipping options are if you want to set up a recommerce business, because the shipping company you use will make a massive difference to your costs and your customer satisfaction.

 

delivering ups packages

 

What Shipping Companies Should I Look At If I’m Setting Up A Recommerce Business?

 

If you are mostly sending small, lightweight packages, you will often find that USPS offers the best rates for sending items reasonably quickly. However, if you are sending larger, heavier goods, you will probably want to look into using a courier.

 

There are many couriers are available, but some popular ones include FedEx, UPS, and DHL. Each courier will offer different options in terms of price, shipping speed, insurance, etc. Take some time to think about how you want to send your items and what your buyers are likely to expect.

 

If your recommerce goods are high value (e.g. reconditioned computers/gaming systems), you will probably want to choose a courier that offers insurance and fast shipping, even if this costs more.

 

For low value items, you’re likely to want slower, uninsured options that cost less to utilize.

 

virtual mailbox platform for desktop and mobile

 

Conclusion

 

Recommerce has become a big business, and contributes enormously to the number of packages that are traveling across the US and even internationally every day, but it still suffers from some big problems. Shipping is the most notable issue, for both sellers and buyers, and one of the biggest pain points in the whole process is delivery.

 

Anyone who is frustrated by trying to be at home when their delivery is due and then finding it doesn’t even turn up on time can benefit from taking out a Virtual Mailbox with US Global Mail. This gives recipients a physical, secure address that packages can be delivered to at any time, whether the recipient is at home or not.

 

The item can then be collected at the recipient’s convenience, making the world of recommerce more flexible, straightforward, and secure for everyone involved.

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