Resale: The end of retail as we know it?

Why second-hand may be first choice 

Cazijn Langeler & Robbin-Jan Haar

The resale market is booming. What was once the domain of small shops and dedicated second-hand platforms like Marktplaats and Vinted  is now being embraced by big retailers. It started with refurbished iPhones and second-hand books, but today retailers are also extending the life of sports and outdoor equipment, for instance. Retailers like Bever and Decathlon are leading the way. But should every retailer embrace this trend? And if you do, how do you successfully set up a resale channel?  

Sourcing: Create a steady stream of second-hand inventory 

The first step is establishing reliable sources for acquiring second-hand goods. Logically, this primarily involves direct consumer trade-ins rather than suppliers. For example, a retailer might offer customers the option to trade in their used items in exchange for either cash or store credit. Opting for store credit can be particularly beneficial for the retailer, as it often results in higher margins and encourages customer loyalty, thereby creating a steady and strategic stream of second-hand inventory. 

Ready for sale: Fast and effective refurbishing 

Now that the inventory is there, it’s a matter of making sure the products are ready for sale. So, getting an efficient quality assessment and refurbishing process going is essential. But there is no one-size-fits-all refurbishment process: do you refurbish items in-house? Do you focus only on functional repairs or also on cosmetic improvements? And how much should you invest in refurbishment without risking margins? 

Successful refurbishment balances cost with quality: prioritizing functional fixes that ensure safety and usability while selectively investing in aesthetic improvements that boost resale value. This process should be fast and efficient, supported by dedicated refurbishment teams and streamlined logistics. Done right, it ensures both that products are ready for resale quickly and a steady flow of inventory.

Sell: Find the right channel 

The next challenge is finding the right sales channels. This involves balancing both physical and online platforms to reach a broader audience. Each channel has its trade-offs: physical stores make it easy to display and sell items without the need for data gathering, listing or logistics to a warehouse. This is ideal for items like clothing or outdoor gear because items are diverse and unique.  

In turn, going online requires each item to be individually listed and often demands too much effort to be scalable. However, online resale works when customers are willing to invest time in comparison. A smaller assortment or higher-priced goods, such as electronics, furniture or baby gear, are a good match as the detailed listing adds value for buyers. Try to make use of existing descriptions of products to speed up content creation, possibly with the use of GenAI.  

Integrating second-hand offerings into existing retail operations, such as a dedicated in-store section or a curated online collection, can enhance visibility and accessibility in a manageable way.  

Build your brand: From second-hand to standout 

Marketing your second-hand offerings effectively means going beyond generic campaigns. Consider storytelling that highlights your brand’s commitment to sustainability, creating a perception of value that resonates with cost-conscious and/or eco-conscious customers. For example, promote how your resale program reduces waste and extends product life, making it a loyalty booster that connects emotionally with your audience. Targeted social media efforts can get your message to the right digital audience. 

We are more likely to buy what we've held or touched. Hands-on experiences, like in-store events or workshops on product care and resale benefits, can deepen customer engagement and strengthen your brand’s sustainable image. In-store displays can help act as physical proof that second-hand can be just as good as new. Providing guarantees can also build trust, assuring your customers the items are of high quality. 

Beware: Integrating into finance and it can be a challenge 

Integrating second-hand sales into a retail operation also brings specific IT and finance challenges. Traditional inventory systems are often not equipped to handle unique, one-off items that vary in condition, price and refurbishment status. If you want to resell online, retailers need more item-level tracking of their inventory.  

On the finance side, managing the true cost of resale, factoring in acquisition, refurbishment and logistics, requires more granular cost accounting or clever shortcuts such as a standard refurbishing cost per product category. Profit margins must be recalculated on a per-item basis, and new KPIs such as margin per resale item or refurbishment ROI become essential for measuring success. Payment systems may also need to adapt when handling store credit or vouchers for trade-in items. Successfully managing these IT and finance implications is crucial for scaling resale sustainably and profitably. 

Also on the finance side, be aware that some sourced goods may not be cost-effective to refurbish. If you decide not to refurbish a product (and hence not sell it), make sure to discard it and write it off in full (instead of keeping it as dead stock).  

With the right approach, second-hand sales can become a valuable and sustainable part of your retail offering. Success depends on your assortment, so start simple and avoid unnecessary complexity. By focusing on efficient sourcing, targeted marketing that builds a sustainable brand, and strong quality assurance, you can tap into this growing market by meeting consumer expectations and sustainability.  

Want to take the first step towards second hand? Get in touch:

Cazijn Langeler

Director Retail

cazijn.langeler@igh.com 

+31610545518