Five topics to consider when evaluating resale partners

The Again Co.
7 min readAug 5, 2022
Photo by Glenn Carstens-Peters on Unsplash

So, you’re ready to offer resale to your customers. Excellent! Now that you’ve decided on this winning strategy, it’s time to figure out how to make it a reality. Shifting gears from the familiar (i.e., selling new) to the unfamiliar (i.e., selling secondhand) can seem daunting. Fortunately, the process is much simpler today than it was a few years ago thanks to a cohort of technology companies that are eager to help you with every step of the process (including ours). The question now, is how to pick the right partner. Today we offer our suggestions for five topics to consider (excluding the obvious one of price) to help make sure you find the best partner for your brand.

Supported models

Though re-commerce is made up of resale, rental, repair, and remake, given the current dominance of resale (it represents about 65% of all re-commerce transactions), we’ll assume that your focus will be on that aspect of re-commerce. That being the case, the first topic we suggest you consider is whether the prospective partner can support your desired resale model.

There are three resale models to choose from — peer-to-peer (or P2P), consignment, and buyback. A few weeks ago we posted an article comparing P2P to consignment, which you can read here. We’ll post a similar article comparing P2P to buyback in the coming weeks. For now, suffice it say that in a buyback model, the brand buys the secondhand product directly from the seller, and then sells the product itself via its resale marketplace. This model requires the products to be shipped to a central location where they can be inspected, and if accepted, photographed and stored until they are sold and shipped. In many ways the buyback model is similar to the consignment model we discussed in our prior post.

When evaluating resale partners, it is important to understand which models they support, and whether those models align with your desired strategy. Some partners specialize in consignment and buyback models, which require that they operate warehouses and handle all of the logistics on your behalf. Others specialize is P2P models and are experts at streamlining these types of marketplaces. It will be up to you do decide how much of the buy-sell transaction you want to be involved with, and whether your partner is able to manage that work for you.

In summary, understand how well your resale strategy can be supported by your prospective partner, and what adjustments you’ll have to make to your strategy as a result of any gaps.

On-boarding process

Next, we suggest evaluating the on-boarding process. This conversation will be largely driven by the resale model you chose, but generally speaking, the key considerations include the allocation of responsibilities between the parties, and how quickly you can expect your program to be live.

A typical on-boarding will involve collaboration among many teams, including your marketing, operations, and finance teams, and include several deliverables, including web design, loading of data, and quality tests. It is important to understand who needs to be involved at the various stages of the project, and who has authority to sign off on deliverables. You should understand if the partner will require access to internal systems, and if so, which ones and for what purpose to ensure that you remain in compliance with your data privacy obligations.

The timeline for going live will vary based on your requirements, and the capabilities of your partner, but care should be taken to ensure that go-live doesn’t conflict with pre-existing product or marketing announcements, or other business constraints that would blunt the impact of your launch. It is also important to understand where delays may arise, and what happens when they do. Watch for timelines that seem too aggressive, or for plans that lack details around what the on-boarding process will look like.

In summary, you should understand the scope of the on-boarding process, establish clear milestones to ensure that the project is proceeding on schedule, and be prepared to handle unexpected delays.

Regulatory compliance

Next, we suggest examining the behind-the-scenes of your proposed resale program. It is important to understand who is responsible for the various compliance obligations associated with managing a marketplace. These topics can be quite complicated, so we recommend involving your legal and accounting teams to ensure that all of your obligations are addressed, even if your partner will handle them for you.

Marketplaces are required to comply with various tax, diligence, and reporting regulations. When your marketplace allows individuals to sell directly, you are responsible for verifying the identify of those sellers — a process known as “know your customer” or “KYC” — and for issuing sellers applicable tax forms at the end of the year. Marketplaces are also required to collect and submit sales taxes on behalf of their sellers. These topics deserve close attention to avoid serious financial and regulatory consequences.

If your partner is offering to handle these obligations on your behalf, it is important to understand how they plan on doing so. In all likelihood, they will be using a third party to help manage these complex topics, which is the right thing to do (nobody can be an expert at everything). However, you should consider your obligations regarding data privacy and security, as the data that is being provided by buyers and sellers qualifies as protected information pretty much everywhere in the world. Knowing who your data will be shared with, and for what purpose, is important to ensure your continued compliance with applicable data privacy laws.

In summary, understanding your compliance obligations, and how your partner will ensure that you remain in compliance is critical. Involving legal and accounting teams in this part of the evaluation is advised.

Customer experience

Next, we suggest evaluating the customer experience for your buyers and sellers. Your marketplace is an extension of your brand and should therefore operate at the same high standard as you provide to your direct customers. The key considerations here includie understanding how front-line support will be provided, and what processes will be in place to maximize customer satisfaction.

It goes without saying that the customer experience is vital to the success of your brand. You may feel more comfortable with handling support yourself to ensure that your high standards are being met. If that is the case, confirm that your partner’s platform can provide you with the means to easily manage support requests. If you prefer that your partner manage support on your behalf, look into the processes that the partner has in place to ensure that support requests are being addressed promptly and at the level of quality that you require.

Another aspect of the customer experience that should be examined is the workflow for accepting items for sale in your marketplace. This is another area of your resale program that will vary based on the model that you choose, but it is universally true that you should understand the overall marketplace workflow from listing items for sale through delivery to the buyer, that communications with your customers are timely and professional, and that potential issues such as product quality or fraud are caught up-front to the greatest extent possible.

In summary, your customers’ experience with your marketplace will play a huge part in the success of your resale program, as well as in your broader sustainability reputation. Spend the time to understand how your partner will assist you in providing an outstanding experience for your customers.

Analytics and reporting

Lastly, we recommend considering how you’ll be able to extract information about your resale program. As your program grows, you’ll accumulate a wealth of information about your customers’ preferences, identify new business opportunities, and how your messaging is resonating. The question to ask your partner then, is how that information will be provided to you.

Ideally, analytics and reporting are built into your partner’s platform and can be accessed any time. If that is not the case, understand how data be presented to you. You may learn that you will you need assistance from your operations team to import data into an internal reporting solution. Consider the impact on the quality of the data that may result from delays in getting you the data, or providing a fixed set of data that limits your ability to analyze trends more freely. We recommend thinking about what kinds of metrics you want to track in advance of your review so that you can more easily compare what the partner has to offer against your desired metrics.

Understanding your partner’s perspective on analytics can also be helpful in your decision making. Partners that understand the power of the data could help you innovate within your own business and highlight opportunities that you may not have known were there. Ask about what metrics they view as being important to understanding the success of the resale program, and how they go about exposing that data to you.

In summary, unlocking the insights from your marketplace transactions can highlight new business opportunities as well as ways to strengthen your existing business and customer relationships. Make sure that you have a way to access that quickly and easily.

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