20 Key Benefits for Brands and Retailers Leveraging Third-party Recommerce Partners

As return rates continue to rise, especially due to the growth of online shopping, brands and retailers are increasingly turning to recommerce not just to recover revenue but to build customer loyalty and test new products. Outsourcing recommerce has become a strategic way to optimize operations and meet changing consumer demands. By collaborating with third-party recommerce providers, companies can implement trade-in and buyback programs that encourage repeat purchases and cultivate long-term customer relationships. These partners also bring expertise in pricing, authentication, and quality control, ensuring that secondhand products meet high standards and protect brand reputation.

In addition to resale, recommerce providers assist brands in launching rental services, recovering value from excess inventory, and entering the secondhand market quickly without the expense of developing in-house capabilities.

In this article, you will explore the benefits of outsourcing recommerce can boost revenue, enhance sustainability, and improve customer engagement, allowing brands to stay focused on their core business objectives.

Repeat Customers

Partnering with third-party recommerce providers allows brands and retailers to implement trade-in and buyback programs, which have proven effective in encouraging repeat business. These programs offer customers store credit or discounts when they return used items, incentivizing them to make future purchases.

For example, Apple’s Trade-In program allows customers to exchange old devices for credit toward new purchases, creating a recurring cycle of upgrades and maintaining brand loyalty. This approach increases customer lifetime value (CLV) by keeping buyers engaged with the brand for a longer period. Moreover, these programs enhance brand loyalty by providing customers with a convenient and rewarding way to refresh their products.

Secondhand Market Expertise

Recommerce partners possess extensive industry knowledge, particularly in pricing, authentication, and quality control, which are essential for the success of resale operations. For instance, brands like Patagonia leverage this expertise through their “Worn Wear” initiative, where secondhand items are carefully evaluated and resold at competitive prices while maintaining high standards of quality control.

These recommerce partners can accurately price products based on demand and condition, minimizing the risk of overpricing or undervaluing items. Their authentication processes also ensure that counterfeit or substandard products do not enter the resale market, thus protecting brand integrity and maintaining customer trust.

Rental Programs

Third-party recommerce partners can help launch rental or subscription-based models, providing customers with temporary access to products without the need for full ownership. This approach appeals to consumers who value flexibility over ownership, particularly for high-cost items or rapidly evolving technology.

A notable example is Rent the Runway, where customers can rent designer clothing for specific periods. This allows them to enjoy luxury fashion without the financial burden of purchasing items outright. These rental programs also support sustainability efforts by maximizing the use of each product through multiple rentals. As a result, brands can attract new customer segments, especially those who are interested in experiences and temporary ownership, thereby expanding their customer base.

Instant Skill Set

By partnering with a third-party recommerce provider, brands can quickly access the tools, technology, and processes needed to manage resale without having to develop these capabilities internally. For instance, Best Buy uses recommerce companies to handle returned electronics, including refurbishing and reselling them.

This approach enables Best Buy to enter the recommerce market swiftly, avoiding the costs and risks associated with developing an in-house solution. Brands that collaborate with recommerce specialists can skip the trial-and-error phase often linked with new operational initiatives, allowing them to scale up rapidly and efficiently.

Additional Revenue Capabilities

Recommerce offers a way for brands to recapture value from products that would otherwise contribute to losses. Excess inventory, returned items, or products with minor defects can be resold through secondary channels rather than being written off.

An example is Nike’s “Nike Refurbished” program, which resells gently worn or flawed shoes. Instead of discarding products that don’t meet initial quality checks, Nike refurbishes them for resale, turning potential losses into revenue. This strategy helps reduce waste and supports sustainability initiatives, all while contributing to the bottom line.

Test New Products

The recommerce channel also allows brands to test new product lines or variations with minimal risk. By observing how customers respond to different styles or versions of products in the resale market, brands can gather critical feedback before deciding on full-scale production.

Levi’s, for instance, can use recommerce platforms to introduce limited runs of new jean designs to gauge consumer interest before mass production. This allows for real-world testing and data collection, enabling the brand to refine its products based on customer demand and market trends. Such an approach reduces uncertainty and minimizes the risk of overproduction or launching products that don’t resonate with customers.

Increased Revenue

By leveraging third-party recommerce companies, brands can tap into new revenue streams through the resale of returned or excess products. For example, Patagonia uses recommerce partners to sell used gear through its “Worn Wear” program. This allows the brand to monetize items that might otherwise be discarded without managing the resale process directly, resulting in a new, consistent revenue stream. Additionally, brands that typically offer discounts or write-offs on unsold products can recover more of the original value, further boosting revenue.

Operational Efficiency

Managing returns internally can be time-consuming and resource-intensive. Outsourcing these tasks to third-party recommerce companies allows brands to focus their efforts on core business functions. For example, instead of allocating staff to handle returns, inspect items, and relist them for sale, a brand like Best Buy can offload this process to a third-party recommerce partner that handles everything from return logistics to resale. This frees up internal teams to focus on improving customer experience and product innovation.

Faster Liquidation

Third-party recommerce companies specialize in the quick resale of items, helping brands recover value from unsold inventory more quickly. For instance, Zappos partners with companies that rapidly resell returned shoes, ensuring that items move quickly through the recommerce channel. This speed allows brands to reduce the amount of time products sit in warehouses, which can be particularly important for seasonal items or tech products that lose value as new models are released.

Cost Savings

Managing storage, processing, and refurbishing returned or excess products can be expensive. Brands that outsource these operations to recommerce partners, such as Nike, which works with third-party logistics providers, can save on warehousing and labor costs. By not having to dedicate space or staff to processing returned items, brands can significantly reduce overhead and invest the savings in other areas, such as marketing or product development.

Lower Return Handling Costs

Returns often come with costs related to customer service, logistics, and restocking. By outsourcing return handling to recommerce companies, brands can significantly reduce these expenses. For example, ASOS partners with third-party companies to manage returns, which helps the brand lower the costs associated with processing and reselling returned items. This approach not only reduces expenses but also improves efficiency, resulting in a smoother return experience for customers and quicker processing times.

Maximized Inventory Value

Recommerce partners specialize in refurbishing and reselling items, allowing brands to recover more value than they would through clearance sales. For instance, Apple sells refurbished products via its own store but also collaborates with third-party partners to ensure that returned devices are refurbished to a high standard and resold. This strategy often allows them to recover more value than would be possible through significant discounts. By doing so, brands can avoid the drastic price cuts that typically come with clearance sales while still maintaining a high resale value.

Sustainability

Third-party recommerce partners assist brands in achieving their sustainability goals by extending the lifecycle of products and reducing waste. For example, The North Face has collaborated with recommerce providers to launch its “Renewed” program, which offers refurbished apparel to customers. This initiative aligns with the company’s sustainability mission by decreasing the number of returned products that end up in landfills. By giving products a second life, brands can attract eco-conscious consumers and enhance their reputation as environmentally responsible.

Brand Reputation Enhancement

Partnering with third-party recommerce providers can significantly improve a brand’s image, especially when sustainability is a priority for consumers. For instance, Lululemon has introduced a recommerce initiative called “Like New,” allowing customers to trade in used athletic wear for store credit. The traded-in products are cleaned and sold through a partner platform. This initiative highlights Lululemon’s commitment to reducing waste and extending the lifespan of its products, reinforcing its identity as an environmentally conscious brand and, in turn, enhancing customer loyalty.

Access to New Markets

Recommerce partners often have access to niche markets, such as consumers who prefer secondhand goods or prioritize eco-friendly options. Urban Outfitters has tapped into this market by partnering with recommerce platforms to launch its own secondhand marketplace, “Nuuly Thrift.” Through this initiative, the brand reaches cost-conscious consumers who may not have purchased their products at full price. This expands their customer base without cannibalizing sales from their primary retail operations, as they cater to a different segment looking for sustainable or more affordable options.

Improved Cash Flow

Quick liquidation of returned or excess stock helps brands keep their cash flow healthy. Dell uses recommerce partners to quickly resell refurbished computers and electronics, allowing the brand to convert returned items into revenue faster than if it held onto them. This approach improves cash flow by enabling faster inventory turnover and reduces the risk of having outdated electronics that depreciate in value over time.

Brand Focus

By outsourcing the complexities of managing resale operations, brands can remain focused on their core strengths. Ralph Lauren, for example, works with recommerce partners to handle the resale of gently used items, allowing the brand to concentrate on designing new fashion lines and enhancing its brand experience. This not only streamlines their operations but also ensures that their focus remains on innovation and maintaining their luxury image rather than getting bogged down in the logistics of handling returned inventory.

Reduced Risk of Overstock

Recommerce partnerships enable brands to mitigate the financial risk associated with overstocked items. Samsung partners with recommerce platforms to resell excess and refurbished smartphones, which allows the company to sell excess inventory before it becomes outdated due to new product launches. This minimizes losses and ensures that older models are still sold while they retain value, avoiding deep discounting or outright disposal.

Circular Economy Participation

Third-party recommerce partners help brands in participating in the circular economy by facilitating the reuse or recycling of products. For example, H&M has collaborated with recommerce companies for its “H&M Take Care” initiative, which encourages customers to return used clothing for recycling or resale. Through this partnership, H&M promotes sustainability and responsible consumption while providing an easy way for customers to engage in the circular economy. This effort reduces waste and supports the brand’s sustainability goals without requiring additional internal resources to manage the process.

Enhanced Customer Loyalty

Providing customers with environmentally friendly options for disposing of or returning their products strengthens brand loyalty. Timberland has introduced a recommerce program that allows customers to return worn footwear, which is then refurbished and resold through a partner platform. This gives customers a green option for disposing of their used items, reinforcing the brand’s eco-conscious image. As a result, customers are more likely to remain loyal to Timberland because they feel they are contributing to sustainability by supporting a brand that aligns with their values.

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Conclusion

This blog highlights the significant benefits of partnering with third-party recommerce companies, supported by real-world examples and actionable strategies. The positive news is that returns do not have to result in losses; instead, embracing the circular economy can provide both financial and strategic advantages. Brands and retailers can easily engage with the growing resale market, allowing them to concentrate on their core business while utilizing the expertise of established recommerce providers. Overstock Trader has emerged as a key facilitator in the industry, connecting brands with suitable recommerce partners to help them achieve their business goals and maximize value.

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