What happens when a product gets returned in a recommerce business?
In this clip from the ReCommerce Podcast, Tuomo Laine (CEO of TWICE Commerce) walks through the real-world steps in refurbishment flows—from the moment a product is received to the point it’s ready for resale, rental, or another usage cycle.
Key points covered:
- Refurbishment flows apply to resale, rental, and hybrid models
- The difference between receiving a single item with a known declaration vs. sorting a bulk return pile (like used clothes)
- Why assigning unique IDs or “license plates” is essential for tracking
- The importance of sorting and tagging before assessing condition or resale value
Karri: Refurbishment flows. So basically, what happens when the company that is operating in some kind of re-commerce business actually receives the product? What happens to the product before it's ready for the next cycles? These type of refurbishment flows are relevant for resale businesses, rental businesses, or basically anyone that is refurbishing the item between the cycles. But yeah, let's jump into the refurbishment flow. We have an example here, and it starts by receiving the product.
Tuomo: Yeah, so if we look at the refurbishment flow, everything that happens between you getting back a product and then putting it into a condition where it could go out again as part of a resale or maybe a rental or whatever. So it all starts with the receiving of the product.
We could say it starts with the idea of identifying what this product is. This differs a bit per product category. In some categories, you might always get an individual product packaged into an individual box. Let's imagine that you're getting back a phone from a consumer; we've used phones as an example many times. So there might be a declaration of what's in the box that the consumer created. From that perspective, we quite quickly get to a place where we just try to identify the condition and maybe assign it a license plate number or a unique identifier to follow it as part of the process.
But there are cases like with clothes where instead of getting a single item per box, you might get a truck full of clothes from all of your product returns from various different stores. And they're kind of dumped to the refurbishment center as just a pile of clothes. So there, the initial receiving starts with the idea that let's separate these, let's maybe tag them if necessary, let's kind of give them the license plate number or the identifier, and then we start to sort them out. The sorting of these is again super dependent on the product category. But then we start to figure out where might these go on an initial level.
But yeah, maybe that's the main thing about receiving it: it might be receiving a single item, or it might be receiving a bunch of, like, a pile of items that we need to start sorting out. So I think that's the two things that are connected there. And yeah, maybe one more thing I want to add: if it's that pile of clothes, you probably don't have a declaration for each one of those. So you might have an understanding of what brand or what store or what category of clothes this might be, for example, and then on average what the condition is. But yeah, that's the main kind of worries and concerns when receiving stuff.