What is re-commerce?
In the first episode of the ReCommerce podcast we start by talking what is re-commerce and why circularity is a must for retailers in the near future.
Karri: Welcome to the Recommerce Podcast, where we talk all things circular commerce and re-commerce. I’m Karri Hiekkanen, and I’m here at the TWICE headquarters in Helsinki, Finland. I’m joined today by Tuomo Laine, who is the co-founder and CEO of TWICE Commerce. First of all, can you introduce yourself and the company a little bit?
Tuomo: Sure. Repeating what you just said, I’m Tuomo, one of the founders and the CEO of TWICE. My background is in tech and design, so even though I’m the CEO, I know a thing or two about product and service design. TWICE Commerce is a commerce platform especially designed for re-commerce. Our goal is to make it as easy as possible for businesses to generate revenue from selling unique items—whether through rentals, refurbished goods, or resales. We focus on making commerce software that acknowledges this uniqueness and makes it easy to manage.
Karri: Sounds good! And it’s great that you already mentioned the word re-commerce, which is also in the title of this podcast. Since this is the first episode, let’s start from the top: what is re-commerce?
Tuomo: Great question. There are probably many definitions. To me, re-commerce is any activity where you’re selling an item that is unique in condition or pricing—whether you’re selling it as-is or renting it. The idea is that the item goes through more than one sales cycle—you sell it twice or more. Historically, re-commerce was associated with refurbished sales, but for us, it includes subscriptions, rentals, buybacks, and more. Anything that involves making money from selling goods more than once.
Karri: Interesting. Do you know where the “RE” in re-commerce actually comes from?
Tuomo: My brain jumps to things like “recycle” or “reuse,” but if you know the actual answer, I’m happy to learn.
Karri: I asked our AI overlords, and they said it stands for reverse commerce—coming more from the reverse logistics angle. That historical link to refurbishment and resales makes sense. Can you give a short comparison between re-commerce or circular business models versus traditional, linear models?
Tuomo: Absolutely. In linear commerce, the model is to manufacture or buy cheap and sell at a higher price. You take the margin and fund your operations and profit from that. In re-commerce, the idea starts with your inventory—assets you want to monetize more than once. It’s about optimizing the lifetime value of items. Your inventory becomes unique—rather than 1000 identical iPhones, you have 1000 uniquely used iPhones. This means you need to track every item individually—its usage history, condition, pricing. This affects everything from your catalog to your fulfillment operations. Customers need to see a unique catalog. Fulfillment becomes item-specific, not just SKU-based. Reverse logistics, refurb inspection, and specialized inventory management come into play.
Karri: That’s a solid comparison. What about the different business models within re-commerce?
Tuomo: I’d split it first between selling and servitization. On the selling side: you have refurbished sales and secondhand sales. The value comes from acquiring items—maybe product returns or aftermarket—and selling them again for a profit. On the servitization side: you have rentals, subscriptions, leasing. Here, the item is part of a service. You don’t buy an iPhone; you pay monthly for a phone service, possibly with perks like repairs or upgrades. In selling, speed matters—you want fast inventory turnover. In services, the balance sheet grows, and you need to finance and maintain the item longer. The payoff takes time.
Karri: Let’s say I’m a new entrepreneur starting a business—why choose re-commerce?
Tuomo: I’m not saying everyone should avoid linear commerce. But if you’re selling expensive goods, there’s usually a secondhand opportunity too. New entrepreneurs often have deep knowledge in a niche—bikes, cameras, etc. That lets them acquire and refurbish goods efficiently or offer unique services. Even if you’re selling new, you should think long-term: establish a take-back program early. If your customer ever wants to upgrade, let them bring it back. It can become a valuable asset. There’s regulation encouraging this—especially in the EU. But it’s also just smart business.
Karri: True—but established linear businesses might worry: “What do I do with used items?”
Tuomo: Exactly. You need operations to handle returns—inspection, refurbishment, resale. Some fear cannibalization or operational complexity. But most large retailers are already piloting re-commerce. It’s becoming less of an opportunity and more of a requirement. Sustainability pressures and circular economy regulations are coming. If you sell something, you’re increasingly responsible for its full lifecycle. Examples: In many EU countries, if a small appliance breaks, the store must take it back and recycle it. The pressure is shifting to sellers.
Karri: That ties nicely into my next question: what tailwinds are driving re-commerce?
Tuomo: There are several: Consumer behavior: Gen Z prefers sustainable, repairable products. Regulation: EU’s Digital Product Passport, right-to-repair initiatives. Economic forces: Manufacturing costs are rising. Nearshoring manufacturing to expensive labor markets. Consumer purchasing power is not growing as fast. Gross margins are under pressure. You can’t just “manufacture more, cheaper” anymore. Selling items multiple times helps improve margins and resilience.
Karri: So, re-commerce can also help fight inflation?
Tuomo: Definitely. If we move to a service-based economy, there’s potential for more stable margins. But if everything is a subscription, access depends on income. That model has risk. If someone’s income drops, they might lose access to beds, fridges, etc. So maybe we won’t go full subscription, but there will be growth in both resale and service-based models. Even with white t-shirts—maybe there’s no rental business, but you can remanufacture them from recycled fibers. There’s value to be captured.
Karri: What about headwinds? What’s slowing re-commerce down?
Tuomo: Key challenges include: Financing: For servitization models, merchants need capital to hold inventory long-term. Operational complexity: You need infrastructure—reverse logistics, refurbishment, item-level tracking. Software gaps: Traditional commerce tools lack support. Most point-of-sale systems don’t even have buttons for returned goods. We spent 20+ years building e-commerce infra (Amazon, Shopify). Now, we need to do that again—for circularity. It’ll take time, but probably less than the first time.
Karri: Final question—where do you see re-commerce and circular business models in five years?
Tuomo: Market data says re-commerce is growing faster than traditional commerce. I think certain product categories—like phones, tools, and sports gear—will mature first. Manufacturers will also start designing more for recommerce—products that are easier to refurbish or service. So yes, I think in five years, it’ll be a significantly bigger market. That’s as close to a prediction as I’m willing to make.
Karri: Perfect. Thanks so much for your time, Tuomo—hope we talk again soon!
Tuomo: Thank you so much.