Choosing the right recommerce model for your retail business
After completing your capability analysis, the next step is setting a clear goal — what kind of recommerce model fits your current operations and resources. Every retailer’s starting point is different, but the principle is simple: align your ambitions with your existing strengths.
Option 1: Resell product returns “as-is”
The simplest and fastest path is to resell product returns in their current condition. This can mean creating an outlet corner in your physical store or launching a “secondhand” section online. You record the item’s condition, set an appropriate price, and move the product quickly without extensive processing.
Option 2: Refurbish and resell
A step up in complexity — but also in potential margin — is to refurbish returned items before resale. This requires either in-house repair capabilities or partnerships with refurbishers who can restore items to higher quality grades. Electronics, tools, and durable goods often fall into this category.
Option 3: Recycle or resell to aggregators
For items that aren’t worth refurbishing, you can resell in bulk to aggregators or recyclers who extract parts or materials for reuse. This can be a simple way to monetize unsellable stock while maintaining sustainability commitments.
Option 4: Servitized models — rentals and subscriptions
If your store already provides repair or maintenance services, you’re well-positioned to experiment with servitized models such as rentals or subscriptions. These models rely on the ability to inspect, maintain, and reissue products over multiple cycles. They’re more complex to operate but can create recurring revenue and stronger customer relationships.
Start small and scale
Retailers new to recommerce shouldn’t try to “boil the ocean.” Pick one model — typically resale of product returns — and refine the process before expanding. The key is to match your first initiative to the capabilities you already have, whether that’s logistics, repair expertise, or access to used inventory.
Karri: What's the goal? So based on the capability analysis, you can look at a list of models, and I think we can share in the podcast notes or kind of in the comments, an example table of different models. Probably the easiest one is that what I mentioned, the secondhand kind of sell it as it is, just record the condition and sell it as it is, or like an outlet corner. Then the next, which is a bit more challenging, is the one where you would refurbish the items. Again, that is based on the premise that either you or a partner can refurbish items to be in better condition. And then probably the final one in resales could be that, well, maybe you don't resell, you recycle them. So you don't resell them back to the consumer, but rather you resell them to an aggregator, kind of an aftermarket, someone looking to buy goods to be kind of turned into spare parts or so on. So kind of more on the recycling side of things rather than reselling. Or in terms of electronics, it might be reselling them to a, I don't know, phone refurbisher that aggregates phones across retailers. But so defining the goal is based on the capabilities.
Karri: Is there also a scenario or where you see that maybe the goal could be already at this point some kind of servitized model or is it most common or easiest way to start this probably just product returns into resales? But some might actually want to already jump into some servitized models.
Tuomo: So servitized model as a recap meaning rentals or for example subscriptions, I think servitized models are easier to launch for those retailers or merchants that already have those capabilities in the repair side of things. Maybe they offer maintenance and repair already as a service. So they will start just start utilizing that capability internally in order to have the inspection repair process in between rentals for example. This is probably more common with more specialized stores or retailers that have a narrower but deeper catalog and know-how in terms of product categories.
Tuomo: Maybe the main thing would be that if you haven't done any recommerce, you haven't done any resales or you haven't done any repair or rentals, you don't probably want to boil the ocean and try to do everything at once. But rather you need to select one of the models to start with that hopefully aligns as well as it can with your capabilities. There's a high likelihood that your capabilities are most aligned with selling product returns as individualized items in store and online with the help of some software.