August 11, 2023

What if products were pre-programmed for resale? Unlocking profit and scale

New business models like resale have been touted as solutions that can accelerate sustainability and bolster product value. But while resale is booming throughout the industry and with consumers, why aren't brands seeing profits from it?

The industry is counting on new business models such as resale to accelerate sustainability and increase the value potential of every product. But while the resale market is booming — so far brands are not seeing profits. This edition of Tap In shares different perspectives on resale's profitability challenges and critical solutions needed for growth.

Today, most brands and retailers depend upon the barcode to profitability manage operations. However, when it comes to resale —  a business defined by cataloging and processing billions of unique assets — we lack the infrastructure to streamline operations and profitably scale.

Billions of products arrive at resale facilities without any form of rudimentary identification. Every single product recovered has to be re-identified, re-cataloged, re-described, re-tagged, re-authenticated, re-processed and re-photographed. “Sounds expensive” – CFOs everywhere.

"A major cost issue in resale operations is the identification of items with an unknown identity. The shift to Digital ID will make a significant change toward optimized resale opportunities."

- Create2Stay, leading Danish resale company and EON Exchange partner

From lack of traceability infrastructure to high operating costs to customer barriers, there’s yet to be a brand that has successfully scaled resale. To capitalize on this business model, brands need solutions to acquire quality supply, process millions of unique items and trace their post-sale journeys.

Dive into this topic below:

Brands are taking back unwanted clothes. Where do they go?

Report from Changing Market

Many brands are offering take-back programs to collect unwanted clothes from customers – but what happens to garments after they’re returned? Last month, an investigation by the Changing Markets Foundation found that most were destroyed, downcycled, stashed in a warehouse or shipped to secondhand markets in Africa. The primary challenges? Tracing clothes is tricky once they start moving through the complex system of sorting and waste management and the infrastructure for sorting and processing is manual.

Why are brands not seeing profits from resale?

Article from Retail Touchpoints

From managed marketplaces to peer-to-peer, branded resale programs encounter shared challenges that prevent growth and revenue generation. One of the biggest challenges is the management and exchange of inventory data that is unique at the SKU- or item-level. Most resellers lack the infrastructure to identify, process and price one-of-a-kind items, leading to high operational costs and manual processes.

How product identification changes resale operations

Article from Bleckmann

Circular solutions provider, Bleckmann, is giving every product that they renew and resell a unique Digital ID, accessible via a barcode. This technology helps resellers correctly price goods, provide accurate product descriptions and trace the item’s journey.

How IoT enables circular systems at scale

Report from Ellen MacArthur Foundation

Ellen MacArthur Foundation’s 2020 Intelligent Assets Report justly notes that a circular economy is an inherently feedback-rich system that depends upon the interoperability of intelligent assets to function and economically scale. After all, doesn’t any efficient and profitable system and business require intelligence?

"To be sustainable, a system must be responsive; actions and behaviors must be connected via data and knowledge. With the embedding of intelligence in almost every object, we can imagine systems that adapt and respond to change in order to remain fit for purpose."

- Tim Brown, Chief Executive Officer, IDEO








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