This article has been revised and corrected from the original version.
Investors are betting on secondhand merchandise becoming a first-rate revenue stream for brands.
Santa Monica-based Arrive Recommerce Inc., a tech company powering the logistics for brands reselling returned or used merchandise, announced a $16 million series A funding round on July 17. Led by Javelin Venture Partners Management LLC and Climactic Venture Capital, this round brings Arrive’s total funding to $25.1 million as the circular commerce industry expands.
“Recommerce is a trend that is exploding with demand from both the brand and consumer side,” said Ross Richmond, chief operating officer and co-founder of Arrive. “By providing a profitable sustainable program with our returns-based resale offering we have hit a sweet spot in the market.”
Arrive describes its resale management of non-new returns, excess or damaged inventory for brands as reverse logistics. The company vertically integrates with partners, from managing inventory in warehouses to developing the websites where customers will find these discounted products.
The online resale marketplace historically belongs to small vendors employing secondhand listing sites such as Craigslist Inc. or eBay Inc. By focusing on direct-to-consumer sales through physical retail and ecommerce, retail brands have been left out of their own merchandise’s second-life value.
Now, the ability to purchase secondhand items through brands’ online sites provides value in its simplicity and authenticated nature. Customers see the discounted inventory directly on retail chain sites, as opposed to unverified postings by online third-party sellers or thrift shop shelves.
While a number of companies built rental ecommerce sites for the fashion industry, Arrive entered the market through the outdoors industry. Instead of camping gear sitting in the closet between trips, Arrive scaled recreational equipment rental capabilities for companies like Eddie Bauer Inc. until 2022.
Arrive’s resale facilitation shows no signs of slowing down. Last year, the National Retail Federation and Appriss Inc. released a report stating consumers returned more than $816 billion worth of retail — around 16.5% of all sales.
Beyond a profitable new revenue stream, recycling merchandise adds a sustainability component for companies answering to a growing consumer base concerned about how brands can reduce waste.
