Apparel Retailers Embrace Circular Economy

Apparel Retailers Embrace Circular Economy

The fashion market is changing and shoppers are embracing the circular economy model. Secondhand, returned, overstocked, or otherwise unsold clothes can be quite fashionable and the success of online operations like ThredUp, Shopify, and other polished secondary market stores serve as proof. In fact, ThredUp reports that the ReCommerce and Secondary markets for apparel will reach $77 billion by 2025.

Tapping into the demand for these upcycled secondhand, returned, or overstocked apparel helps alleviate many pain points apparel retailers currently face. For example, they can make new and loyal customers out of the buyers they supply. They can reduce pollution and waste from landfilled products. They can cut storage and carrying costs for unsold and returned merchandise. Finally, they can even increase recovery—and, ultimately, revenue—by a noticeable margin. All it takes is the right mindset and the right tools.

But before talking about solutions for retailers and manufacturers, let’s look at a circular economy definition and some of the perceived challenges.

What is ReCommerce and the Circular Economy?

ReCommerce is the recovery and resale of a returned, overstocked, or otherwise unsold garment. Say a customer orders five of the same item but in different colors and sizes; then keeps one or two items and returns the rest. The retailer can opt to ship, process, clean, and store the returned items after refunding the cost to the customer. The remarketing of those returned items is considered ReCommerce.

But what if the seller decides remarketing items isn’t cost effective? Then they may sell it to another business that makes its money buying and reselling unsold lots from larger retailers. This too is a form of ReCommerce.

Simply put, the circular economy is the bigger system of ongoing interactions between:

• The major retailers and manufacturers
• The small business that buy up unsold goods to resell them
• The consumers that ultimately wind up with these goods
• The services and platforms that support these transactions

Challenges to ReCommerce

While it’s great to break into the circular economy, there are roadblock to doing so. The main challenges for retailers and manufacturers looking to break in are:

• Poor recovery for goods
  Businesses may feel that they’d rather take their chances remarketing or selling their items at outlet stores rather than sell to lowballing liquidators
• Brand perception issues
  Businesses, especially fashion and luxury brands, hate losing their say in how and where their inventory is sold, as it puts their hard-won image in jeopardy
• Space Concern and Poor Logistics
  Fashion moves fast and some companies may prefer to throw away their unsold inventory or offload fast for just pennies on the dollar rather than go through slow back and forth negotiations with traditional liquidators. 

Luckily, the market is shifting, giving new value to old inventory. Between shifting perceptions and forward-thinking inventory management solutions, these challenges may not be as daunting as you may have thought.

Changing Perception of ‘Used’

Report findings show that consumer perception of previously owned garments—and goods of all types—has changed. No longer do customers view used, resold, or liquidated garments as dirty, outdated, or destined for the local charity drive. Instead, these items are seen as valuable vintage products with lots of life still in them. In fact the secondhand fashion market is expected to grow 10-15% by 2025.

As it happens, ReCommerce is the most viable solution for Luxury, Premium, and Mid-market segments as shown in the chart. Fortunately for retailers of stylish brands, this means that their goods will be in high demand with—and right at home in—boutique secondary market shops, like an upstart entrepreneur’s online storefront.

A Circular Economy Benefits All Involved

By implementing a circular economy model with a forward-thinking online liquidation auction partner,  retailers can adapt to this quickly changing social environment. Gen-Z and Millennials are purchasing more used clothing in hopes of sustaining both the economy and the environment.

In a world where people are buying more clothes more often and keeping them for less time, a re-commerce solution is vital for reselling, restoring, and recycling fabrics and materials to:

• Keep the environment healthy:
  Every item resold is one that stays out of a landfill or our oceans
• Give consumers the fashion they crave at affordable prices:
  With today’s rising prices, consumers may look to new avenues for their apparel
• Support small businesses:
  Sellers rely on supply from great brands—and reward them with their loyalty
• Recover value and bolster bottom lines:
  The best solutions can saving money, time, and space while preserving operational velocity and scalability

How ReCommerce Works

The following figure perfectly illustrates how a ReCommerce circular economy works and how apparel retailers can fit this strategy in with their inventory, pricing, and logistics operations.

Pallet Liquidation and ReCommerce

For certain apparel retailers, reselling individual items back to consumers can make sense. But for retailers with warehouses stocked full of inventory with varying sizes, colors, styles, and maybe even different brands and condition grades, they have a greater challenge in sorting and processing massive amounts of returned items. It’s easy to become overwhelmed by returns with experts estimating that as many as 30% of online purchases are sent back for one reason or another. 

In these cases, pallet liquidation or even truckload liquidation through an online auction marketplace makes the most sense. Enter B-Stock.

Break Into the Circular Economy With B-Stock

B-Stock is the world’s largest online B2B marketplace for returned and excess merchandise. Selling in bulk to SMB resellers that operate discount, clearance, and Mom & Pop stores is a great way to handle unsold goods for several reasons. 

Tired of liquidators taking their cut of your inventory’s value? The auction format of B-Stock’s marketplaces means that many buyers compete, driving the prices up, getting you the highest amount per unit that the market will supply.

Not only does our large buyer network fuel this competition, but it also improves the speed and regularity with which your business can clear out old inventory. With a massive buyer network of, sellers will have access to hundreds of thousands of reputable buyers and can have cash in hand in as little as 15 days after signing up. And once buyers see you as a reliable source of merchandise, they’ll be back for more, keeping your warehouses clear and your velocity up.

Further, B-Stock allows sellers to enforce custom terms and conditions on their sellers to dictate where and how their goods are sold. This serves to both protect their brand image and avoid muddying existing sales channels. You’ll be able to sell as fast as you can without a worry.

So let us show you exactly what our auction platform, massive buyer network and dedicated auction experts can do for you. If you’re an apparel retailer with an abundance of overstock and returned inventory, we’d like you to contact us today to learn more about our private B2B marketplaces or schedule a demo today.