Recommerce isn’t just about reselling—it’s a full spectrum of business models that let you monetize products more than once. In this clip from the ReCommerce Podcast, Tuomo Laine (CEO of TWICE Commerce) explains the two major paths in circular business: selling products again or turning them into services.
On the sales side, you’ll find models like refurbished sales, secondhand marketplaces, and buybacks—where finding the right supply is key.
On the service side, it’s all about rentals, subscriptions, and leasing—where monetization happens over time and the business holds the asset longer.
Learn how each model works, what makes them challenging, and why the decision to “sell or servitize” is at the core of every recommerce business.
Karri: Maybe also a quick word about the different business models. So I think like in linear business it’s pretty simple that you buy cheap, sell more expensive, and that’s where you get the profit. But in circular commerce—recommerce—there are multiple ways to actually monetize the inventory. So maybe a couple words about the different models?
Tuomo: Yeah, I would again do a first-hard split going about whether you’re still selling stuff or whether you’re servitizing the item. On the selling side of things, it’s business models like refurbished sales or secondhand sales as-is. So there you’re making your profits out of the idea that, well, you had to get that item in from somewhere in the first place. Maybe it was a product return after the initial kind of virgin sale, or maybe you bought it from an aftermarket and then you feel that you can find an arbitrage in that value that you bought it from. You can repair it—so refurbish it—and sell it for a little bit more of a profit. Or maybe it’s just secondhand that you’re aggregating a certain amount of a certain style of clothes, and then as a marketplace, you can find customers that way.
So these are the models where you still sell. And I think the challenge is then on the supply side—on figuring out where do you find this secondhand supply where you can make your margin.
Now, the servitization side includes things like rentals, whether it’s fixed short-term rentals, long-term leasing, or subscriptions. The idea is that the item itself is part of a service. So you’re not buying an iPhone; you’re buying a phone as a service. Then you pay a recurring fee for it. Usually attached to that you get some other benefits like free repairs or maybe other service bundles—like in car companies, where they make most of their money from maintenance and these additional services.
So those are the different models. Either you servitize the good as part of a service, or then you keep doing these unit sales, but you’re trying to figure out where you get your supply. And there’s different aspects related to both that make them interesting and challenging.
Just as one example with the sales side, it’s the speed in which you can flip your inventory that kind of defines how much capital you have tied in the business. Whereas on the service side, your balance sheet starts to grow because you hold these assets in your own books for a longer time. It might take a longer time for them to pay themselves back, so there’s this lead time until that item becomes profitable—and usually, you need to figure out financing for it.