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Building a resale program can solve your excess inventory problem

Illustration of a shoe and dollar sign next to the recurate logo.

This is an excerpt from Ryder E-commerce by Whiplash’s latest ebook “How to turn surplus into success: Navigating the excess inventory dilemma” by Recurate, a technology-enabled resale management service.

“Recommerce,” that is, the buying and selling of second-hand items, has become increasingly popular as consumers seek out sustainable and cost-effective ways to update their wardrobes.

Brands themselves are taking note of this, and many of them have been jumping on the opportunity to launch “branded resale programs,” managing the secondhand market for their own products. Michael Kors, Zara, Mara Hoffman, Steve Madden, and Outerknown are just a few of the many brands that have brought resale channels into their own e-commerce stores.

It seems like a no-brainer: brands know that their customers are shopping for pre-loved items, and the market already exists. So, why not build a channel that is more elegant, user-centric, and authentic to the brand than what third-party marketplaces offer?  It gives them the autonomy that platforms like Poshmark, Vestiaire Collective, or The RealReal cannot provide. 

To add to the draw, brands that integrate resale into their site can use this channel to convert new shoppers by offering their products at a lower price point. Resale also drives lifetime value, especially for brands that pay out sellers in store credit, and re-engage lapsed buyers by inviting them back to sell their used items. All the while, these programs help brands move towards a more circular and sustainable model.

A new avenue for excess inventory

Another benefit that brands can realize but may not have initially thought of, is leveraging their pre-loved marketplace as an opportunity to resell secondhand items. It opens up a better way to monetize returns and excess inventory–things that can no longer be restocked and sold as new. The website traffic is already there, and the brand can recoup a higher percentage of an item’s MSRP than sample sales or other liquidation tactics. 

Amour Vert, a sustainably-minded California-based brand, launched ReAmour, a peer-to-peer resale marketplace with the goal of encouraging their customers to “shop circular” and help keep items out of landfills. Realizing that their brand had an excess of returned inventory at their warehouse that couldn’t be restocked as new, they leveraged ReAmour to resell those items. 

Within a month, ReAmour’s online inventory count grew by 69% and overall marketplace sales increased by 72%. On the back end, they leveraged Recurate’s technology to provide the integrated resale marketplace (user experience, shipping integrations, and customer service) and a partnership with Fillogic who managed the operational fulfillment of the brand-sourced inventory. 

Other brands, like Peak Design, which sells backpacks, camera bags, and travel gear, have leveraged their resale program similarly. Through their partnership with Recurate, Peak Design’s website hosts the Peak Design “Marketplace,” where their customers can buy and sell pre-owned gear. Within the marketplace, there are both items sold and fulfilled by community members, as well as items that are listed as “PD Certified” meaning they are coming directly from the brand (returned inventory and excess items) but being sold at a discounted price. Even when shoppers are looking to shop for new items, if that item is available on the resale marketplace, a “buy used” option is displayed.

“Selling [open boxed and refurbished] alongside peer-to-peer effectively quadrupled the rate at which we were selling open-boxed stuff, because the PD Marketplace is tied into our new product buying experience,” said Adam Saraceno, Marketing Director of Peak Design. “Once we did that, it made the ROI of our marketplace shoot up quite a bit in terms of the rate at which we were selling through that product. Which also organically increased the rate at which people were coming to the marketplace and listing new products.”

While brands and retailers face the challenges of excess inventory, returns, and damages, integrated resale opens up a new opportunity. Building an online pre-loved marketplace can be a “swiss army knife” that attracts new buyers, encourages loyalty, and provides an easy way to offload excess inventory without waste or significant losses.

Want to learn more? Check out the rest of our ebook on how brands can effectively tackle excess inventory and create more opportunities to engage customers:

turn surplus into success e-book cover
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