❓ What is recommerce, really?
In this clip from the ReCommerce podcast, we break down the true meaning of recommerce—and why it’s much more than just reselling secondhand goods.
Tuomo Laine (CEO of TWICE Commerce) explains how recommerce includes rentals, subscriptions, refurb sales, and buybacks—anything that lets you monetize an item more than once.
Learn how this shift impacts everything from inventory management to storefront design. Instead of selling identical new products, recommerce deals with unique items in unique conditions, tracked at the individual level.
We also explore the surprising origin of the term “recommerce”—is it repeat? reverse? recycle? (Spoiler: maybe all of them.)
Karri: What is Recommerce?
Tuomo: It’s an excellent question and I think there’s probably many definitions for that. To me Recommerce is anything where I’m selling an item that is unique in its condition or a price point for example and whether I’m selling or as it is or maybe renting it—so selling it as a service—but the idea is that an item gets more sales cycles than one. So you sell it twice or more, kind of where our name is also coming from. But I think historically Recommerce was attached more to refurbish sales and all of that. When we talk about Recommerce we include subscriptions and rentals and resales and refurb sales and buyback—everything that has to do with the idea of making money out of selling goods more than once.
Karri: Okay and do you know where the “RE” actually comes from in the word Recommerce?
Tuomo: Well I think repeat. I think RE—like my brain goes immediately like recycle and redo, everything. But if you know the actual answer I’m more than happy to learn it.
Karri: I had a short discussion with AI overlords today and they said that it’s reverse commerce.
Tuomo: Okay, so it’s kind of more from the reverse logistics side of things. I think it has to do with also the historical background then—that it’s quite affiliated with refurb and resales.
Karri: Yeah. Maybe can you give me a little, like, a short comparison between Recommerce or overall circular business models versus traditional or linear business models?
Tuomo: Yeah, I think there’s multiple ways how we could kind of go about it but I usually like to start with the idea that in linear commerce your operational model is to manufacture or buy cheap and sell it out a bit more expensive—and that’s pretty much it. Then you repeat that cycle and you take that cross margin in between, and with that you finance your operations and hopefully pocket some of that as profit.
I think with Recommerce, the idea starts more from the aspect that in your inventory or in your balance sheets and assets, you have items that you look to monetize more than once. So maybe historically in markets where it’s super valuable, you might have been leasing it out or similar. You kind of start to optimize the lifetime value of the item rather than that one sale.
So when you engage in that kind of model, I think the first understandable thing that happens is that in your inventory or balance sheet, you don’t anymore have new items that are comparable to each other. You don’t have, say, 1000 iPhone 15s that are all equivalent and categorized under one SKU. Rather, you have 1000 unique items that have been used in a unique amount or they have a unique condition or unique price points. And you can go extremely into granularity there.
But that starts to be the main difference. All of a sudden, you have to start tracking your inventory on an individual item level and understand what has happened to that item and what will happen in the future. That’s really kind of the main starting point.
And then that reflects into multiple touch points of commerce. If you’re thinking about online purchasing or storefronts, all of a sudden your customers need to be able to browse a catalog that reflects this kind of unique item base. So things on that front become a little bit more complex. Order fulfillment becomes a bit more complex—it’s not anymore enough that you have a person going about your warehouse or storage trying to find one of the 1000 iPhones, because they’re all equivalent. You might actually need to find the exact one.
It’s this kind of thing that then starts to trickle down into all of the supply chain—your inventory management, your catalog management, all the way to storefront and user experiences. And then things like reverse logistics and so on.
So I think that’s the main difference. That’s kind of on a high level. But I think the most sobering way is to just start it from the inventory and think about how your business changes as the nature of your assets change.