The Complete Refurbishment Journey

‍Karri: Hello and welcome to the Recommerce Podcast, the podcast where we talk all things Recommerce and circular businesses. I’m joined by Tuomo Laine, the CEO and co-founder of Twice Commerce.

Tuomo: Hello.

Karri: Today we’re going to talk about refurbishment flows. So basically what happens when the company that is operating in some kind of a Recommerce business actually receives the product—what happens to the product before it’s ready for the next cycle. So these types 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—kind of like you said—everything that happens between you getting back a product and then putting it into a condition where it could go out again as a 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 “let’s identify what is this.” It differs a bit per product category. In some categories, you might always get like an individual product packaged into an individual box. So let’s imagine that you’re getting back—we’ve used phones as an example many times—but let’s imagine that from a consumer I get a single phone. So there might be a declaration of what is in, like the consumer created a declaration of what’s in the box. So 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, maybe tag them. If necessary, let’s give them the license plate number or the identifier. And then we start to sort them out. The sorting of these then again is super dependent on the product category. But then we start to figure out where might these go on an initial level. That’s the main thing about receiving it—it might be a single item or it might be a bunch of items we need to sort. And yeah, one more that I want to add: if it’s that pile of clothes, you probably don’t have a declaration for each one. So you might have an understanding that from what brand or store or category of clothes this might be, for example, then on average what the condition is. But yeah, those are the main worries and concerns when receiving stuff.

Karri: Maybe a quick discussion about the LP and the license plate number. So to my understanding, for example, iPhones already have some kind of unique identifier. So that’s probably something that you want to use if you’re able to get it out of the product. But then if it’s a pile of clothes, is it still important to start tracking them individually from that point on? So are you putting a label that this is a red dress from Gucci or is this the specific red dress from Gucci?

Tuomo: Yeah, it’s super dependent on the refurbishment capabilities there. But the earlier you’re able to track items individually, the better you’re able to track your operational efficiency, profitability, and all of the data that starts to be attached to it. So getting from aggregate data to individual data enables you to learn more. Like you said, phones might have an IMEI code, and you might still want to use something specific for your system—because if you’ve done a lot of automation in your processes, some of those might depend on a specific format for the license plate number or unique identifier. You might also have things like automated tracking based on RFIDs. So if you attach an RFID tag to a piece of clothing, then your system might be intelligent enough to automatically know where it is. In Glasgow, there’s a company called ACS Clothing—if you ever have a chance to visit their facility, that’s an eye-opener in terms of following individual garments and the steps in the process.  I haven’t had the chance to visit, but I met JC Electronics at WCEF, and they do electronics refurbishment for manufacturing plants.

Karri: I can imagine that for a component of that size, they might already need to follow it individually quite early in the process.

Tuomo: Definitely. The LP or license plate number can be an RFID, QR code—basically anything that helps. Systems like the one we’re building allow an item to have multiple LPs. You don’t need everything to follow a single identifier. At the end of the day, you can attach even 100 different unique identifiers to it, as long as they’re unique in their own scope.

Karri: So it doesn’t have to be one namespace?

Tuomo: Exactly. And ideally, the LP is already on the item. Manufacturers are increasingly tagging at manufacturing time—so all of the supply line can use that identifier. That makes later processes a lot easier.

Karri: Is that due to regulation?

Tuomo: In part, yes. Digital product passports in the EU are pushing towards this. Also, manufacturers like Apple have their own reasons for uniquely tracking each item. In sporting goods, manufacturers like Atomic and Fischer add durable QR codes to skis to help rental shops integrate with them.

Karri: Alright, so receiving and identification are the first steps. Then comes sortation.

Tuomo: Yes. In sortation, we decide which process line the item goes to. Some refurbishers have dedicated lines based on brand, model, or product type. You might also quickly determine that an item is junk and recycle it. Or decide it needs washing before refurbishment.

Karri: If the item is good, we go to refurbishment. But sometimes we need to evaluate the next best use.

Tuomo: Right. So we bring it to a process line where someone starts working on it. There’s often a grading step—sometimes against a customer declaration. And then you might decide if it’s worth investing into. The goal is to determine whether and how to improve the grade of the item—whether it’s worth upgrading from grade 4 to grade 1.

Karri: And you calculate repair costs versus resale value?

Tuomo: Exactly. You consider washing, parts, employee time, etc. Initially, you estimate. Then as you operate, you gather data and improve your logic. That’s where margins are made or lost.

Karri: And if the math doesn’t make sense, you move to next best use.

Tuomo: Yes. That could be salvaging parts, recycling materials, or even donation. For example, maybe only the battery or screen is salvageable. Or you donate the whole item. Or hold onto something collectible like a rare film camera.

Karri: So you always make both a physical and economic decision.

Tuomo: Right. Physically repairable doesn’t always mean economically feasible. You might hold something rare for future resale.

Karri: Okay, so we’ve graded it, maybe refurbished it. Now we catalog and list it.

Tuomo: Correct. Once ready, you photograph it—ideally with an actual photo, not stock imagery—and publish it to your sales channels. That enhances trust and the buyer experience.

Karri: And for rentals, this is often part of the normal cycle.

Tuomo: Exactly. Rentals constantly go through mini-refurbishments—inspection, quick fixes, etc. And eventually, rental items can be sold as refurbished.

Karri: So you’re tracking everything—usage, maintenance, repair history—and eventually you know the perfect time to sell.

Tuomo: Yes. You want to answer: What’s the current value of my inventory? What are the top performers? What are the lemons?

Karri: You mentioned the “Monday item”—that’s a Finnish term?

Tuomo: Yeah, the idea is: something made on Monday when someone wasn’t at their best. You want to track items individually so one bad product doesn’t skew your view of the whole batch.

Karri: Even a solo entrepreneur can benefit. But especially when you scale and add locations or employees—digital tracking becomes critical.

Tuomo: Yes. And sometimes you’re surprised. Maybe something you thought performed well actually doesn’t—or vice versa. Like a $50 adapter rented out 100 times. You realize it’s a hidden margin booster.

Karri: Right, so track, experiment, analyze, and evolve.

Tuomo: Exactly.

Karri: Final challenge—can you summarize the entire refurbishment flow in 30 seconds?

Tuomo: I’ll try! Step 1: Identify the item. Step 2: Sort it—decide who should work on it or if it’s junk. Step 3: If it’s workable, clean it and send it for grading. Step 4: Analyze whether to invest in repair. Step 5: If yes, repair and do QC. Step 6: Catalog, list, and ship. If not, go to next best use: parts, recycle, or donation.

Karri: That was great—maybe a bit over 30 seconds but very comprehensive. Thanks a lot for this, Tuomo!

Tuomo: Thank you!