Managing a resale business is incredibly different from running a traditional full-price business. Secondhand supply is unpredictable, so existing systems used for pricing, merchandising and reporting cannot be used for resale. In addition, the user experience must be different: buyers and sellers need resale-specific features, such as listing flows, item identification, condition descriptions, pricing recommendations, and shipping support and payouts. Lastly, a resale business requires more nuanced supply and demand modeling and marketing strategies.
As if the underlying nature of building a resale business wasn’t complex enough, there are also a few different resale models that brands can choose to implement in order to keep items in circularity and out of landfill. Archive has spent many years building technology that addresses all of these complexities, and makes it easy for brands to launch a resale business that is profitable and scalable—regardless of which model (or combination of models!) they choose.
The simplest way to think about various resale models is to split them into two buckets: those where Archive and/or a brand does not touch the inventory, and those where we do.
Let’s start with models in which Archive does not touch any inventory.
In peer-to-peer models, buying and selling secondhand goods takes place in an online marketplace. Archive’s recommerce sites are all completely custom, and designed as a natural extension of the brand with the highest-quality user experience. The seller typically has an option to receive earnings in the form of cash payout or store credit.
Peer-to-peer generally refers to consumers selling directly to consumers, so the inventory is never held by the brand. In Archive marketplaces, however, we allow brands to leverage supply from a variety of channels. Brands can choose to source supply from one, all, or a combination of any of these channels.
Consumer Owned: Any consumer can list their secondhand item for sale; when an item sells, the seller sends it directly to the buyer using a prepaid shipping label.
Verified Sellers: Sellers can be deemed “approved sellers” and list their secondhand inventory on the recommerce site. Most brand partners who leverage this feature do so for vetted vintage resellers. Verified resellers ship directly to the buyer when an item sells.
Brand-Listed: A brand lists owned inventory (inventory a brand has on-hand, such as samples, returns, or damages) to the site and ships directly to the buyer.
Now, let’s address models where we do touch inventory.
For Managed models, a brand ships owned inventory (for example samples, returns, or damages) to a warehouse to be cleaned and repaired as necessary, and fulfilled when sold. Products are listed for resale on the brand’s recommerce site powered by Archive. There are a number of ways this can happen:
Archive Managed (Full Service): Brand uses Archive's Resale Ops Technology and 3PL partner for all logistics including product identification, conditioning, cleaning, repairs, photography, listing, and fulfillment.
Archive Managed (Lite Service): Brand uses Archive's Resale Ops Technology for product identification and fulfillment, but uses their own 3PL for all other logistics.
Brand Managed: Brand does not use Archive's WMS. They use their own 3PL but Archive does automate fulfillment.
With Trade-In models, supply is sourced from consumers, and then follows the flow of a Managed model, where items are sent to a warehouse to be cleaned and resold, or routed for reuse or recycling. This type of program is sometimes also referred to as “take-back.”
In-Store Trade-In: customers can bring their pre-loved items into stores and receive a credit.
Mail-in Trade-In: customers ship pre-loved items directly to a warehouse and receive a store credit.
Determining which resale model is best for any brand is based on a number of factors, including program goals, internal resourcing, item price points, customer preferences, operational set up, etc. Archive’s technology was built to be incredibly flexible, allowing brands to launch with any model (or combination of models), and then add new models over time. Our team has helped launch resale businesses for over 40 brands, and helps our brand partners build a business case for resale with a recommended model that ensures profitability.
Interested in discussing which resale model might be best for your business? Get in touch with our team today by emailing email@example.com