Market pundits have recently noted a significant increase in Resale as a Service (RaaS). While resale and secondhand boasts of a deep history in the retail marketplace, it only recently expanded beyond thrift shops and flea markets to become a phenomenon that many top retailers are leveraging to target their most valued customers. From the rise of reseller marketplaces like Poshmark or TheRealReal to brands like Dick’s Sporting Goods and Gap using third-party services to resell their goods, an increasing number of merchants are exploring RaaS models to enhance their bottom line.
Why Explore RaaS Now?
On the surface, the recent buzz around RaaS may seem like nothing more than a market reaction to the recent supply chain issues that continue to hamper production across verticals. However, the resale market grew 21 times faster than retail apparel in 2019, before COVID and the supply chain issues that arose in its wake.
Jonathan Gardner, Senior Analyst at W. Capra, chimes in: “While current supply chain issues have certainly bolstered the resale boom, consumers have also gravitated toward this market for its cost effectiveness and, in many cases, brand-backed quality.”
How Do I Implement RaaS?
Depending on your business needs, there are a variety of solution providers that can help you to operationalize a resale system. These third parties provide SaaS-based solutions that offer a turnkey supply chain and a means of receiving and assessing products for resale.
In the apparel industry, providers like Trove and thredUP have built out white-labeled RaaS solutions to handle everything from receiving products to cleaning and photography, from website management to facilitating sales. Under such models, funds are apportioned to the merchant, the provider, and the reselling customer. The reseller may have the option to receive store credit or cash as payment. RaaS provider Archive is seeing 80% of resellers choose store credit, keeping the lion’s share of the profit of the resold goods with the merchant.
How Will RaaS Benefit My Business?
Beyond the financial benefits (merchants, of course, get a cut of the resale market), there are plenty of benefits associated with the RaaS model. From a branding perspective, when the merchant stamps the resale, it signals to the world that the product holds up through time and use. There’s also an ecological and reputational advantage to RaaS in that resale is both sustainable and eco-friendly.
Beyond the merchant benefits, consumers will stake their confidence in knowing that, unlike some online reseller marketplaces, a brand-backed RaaS platform guarantees the same shipping and consumer experience that the retailer provides in every new sale.
How Do I Begin?
To embark on your RaaS journey, it’s important that you first take the time to understand your business needs. “Like any other retail technology implementation, RaaS begins with a strategy and requirements exercise,” Gardner elaborates. “When relying on a third-party provider, will you look for a provider that integrates directly with your website, allowing the consumer to checkout with new and resold goods in the same basket, or a provider that hosts their own marketplace? Do you want your provider to post on independent marketplaces? Will you introduce peer-to-peer functionality?”
“Regardless of direction, it’s critical that you have a trusted partner who can ensure that your requirements are comprehensive enough to home in on the provider best suited for your business.” W. Capra can help merchants integrate a resale platform seamlessly into their existing environment, while ensuring that the merchant maintains control of brand optics and experience.
For further discussion on resale technology, please contact Jonathan at [email protected].
