Leveraging Resale and Wholesale Marketplaces to be More Sustainable Retailers

By embracing the circular economy, retailers can make the most of their returns and excess inventory, increasing their profitability and brand value.

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As the world becomes increasingly conscious of the environmental impact of overconsumption and waste, secondary marketplaces are emerging as a sustainable complement to traditional retail practices. By promoting the reuse and repurposing of goods, secondary marketplaces play a crucial role in advancing the circular economy and reducing the roughly 2.9 million tons of returns that are sent to a landfill each year. The benefits are numerous, from reducing CO2 emissions caused by excess transportation to conserving resources to supporting sustainable production practices. This article will explore the intersection of secondary marketplaces and sustainability, highlighting the ways in which retailers and consumers can participate in this movement to maximize profitability and support a more sustainable future.

Contributing To Sustainability Goals

Retailers are making sustainability pledges in a variety of ways to reduce their environmental impact. Home Depot has set a goal to reduce carbon emissions by 50% by 2035, while IKEA has set a goal to become 100% circular and climate-positive by 2030. The reverse supply chain is a critical key to achieving sustainability goals for retailers because it allows them to extend the life of their products and reduce waste while also providing a new revenue stream for the business. In addition, the reverse supply chain can help retailers reduce their operational costs by minimizing waste and increasing the efficiency of their supply chain. Retailers that implement the reverse supply chain are not only reducing their environmental impact but also meeting the demands of consumers who are becoming more sustainably conscious. By offering take-back programs and partnering with resale platforms, retailers are promoting sustainable consumption and reducing their carbon footprint.

Consumers are eager to support brands who actively promote sustainability. A study by Cone Communications found that 87% of consumers would purchase a product because a company advocated for an issue they care about. In fact, consumers are demonstrating brand loyalty to retailers who have sustainability initiatives. 73% of those it surveyed would pay more for sustainable items with the majority willing to pay a 10% price premium. As consumers become more aware of the environmental impact of their purchasing decisions, they are increasingly looking to support retailers who prioritize sustainability and responsible business practices.

Maximizing Brand Value and Recovery on Returns and Excess Inventory

The secondary market has been growing rapidly in recent years due to the increasing demand for sustainable consumption and the rise of e-commerce. According to a report by ThredUp, the resale market is projected to grow from $32 billion in 2020 to $64 billion by 2024. This is hopeful for retailers who not only struggle to manage their returns, but also to make financial sense of their excess and distressed inventory. In 2022, retail stores were sitting on a record $732 billion of merchandise. This has created profitability problems for many retailers who have been forced to heavily discount their products, donate, dispose of, or liquidate items for pennies on the dollar to clear their inventory. Fortunately, by outsourcing secondary sales to the right ReCommerce provider, retailers can sell these goods for 60% or more of their retail value. Even if retailers can do that for 3–5% of unwanted inventory, our data shows they can increase profitability by 20–30% overnight.

Brand protection is another significant benefit of outsourcing secondary sales to a third-party provider. By passing unwanted or slow-moving inventory to resale experts, retailers and manufacturers can anonymously sell discounted products without competing with their higher-priced inventory and training customers to expect deals. Additionally, anonymity ensures retailers don’t get blamed for inconsistent product conditions. This process ensures they preserve brand integrity.

Reducing Returns Cost

Marred by rising freight fees, labor costs, and inflation, retailers are undoubtedly spending more than ever processing returns. In some cases, retailers are losing money just to process a return.

In an industry with an average net profit margin of only 4%, every dollar matters. Under such tight margins, calculating the value-add of processing returns is extraordinarily difficult to measure. Some returns may not be worth freight, labor, repair or remarketing fees–not to mention accessorizing, repackaging and storage costs. Fortunately, there are ways retailers can recover costs and minimize net losses through reCommerce.

  • Intelligent Disposition Software: The key is to use data to identify products with the highest velocity and recovery potential. Equipped with this information, retailers can identify items worth touching and determine how to handle items that don’t justify the costs. 
  • Bulk Orders: Retailers who source items in bulk from can save money on shipping costs by ordering larger quantities of items at once. Wholesalers can offer lower shipping rates for larger orders, as they can consolidate the items into fewer shipments, reducing the number of trips required to transport the goods.
  • Reduced Packaging: When retailers purchase or sell items in bulk, they can often receive products that are packaged in a way that reduces excess packaging. This can help to reduce the carbon footprint of shipping by minimizing waste and reducing the weight of the shipment.
  • Local Sourcing: Retailers who offer products to local wholesalers or resellers can reduce transportation-related carbon emissions by reducing the distance that products need to travel.
  • Second-hand Goods: Reselling second-hand goods can also help to reduce carbon emissions associated with the production and transportation of new goods. By extending the life of products that would otherwise be discarded, retailers can reduce the environmental impact of the retail industry.

In conclusion, secondary marketplaces offer a sustainable solution to the environmental impact of overconsumption and waste. Retailers who leverage the benefits of reverse supply chains, resale platforms, and take-back programs are not only reducing their carbon footprint but also meeting the demands of consumers who are becoming more environmentally conscious.

By embracing the circular economy, retailers can make the most of their returns and excess inventory, increasing their profitability and brand value. Moreover, by reselling second-hand goods and adopting sustainable sourcing practices, retailers are not only creating a more sustainable business model but are also poised to capitalize on the growing demand for sustainable retail practices.