2 August 2021
In opposition to the linear economy, the circular economy aims to limit waste and environmental impact by making the most of our resources. This paradigm shift, in line with ecological issues, finds its digital transposition in the circular economy marketplace. What does a circular economy marketplace look like? What business opportunities does this atypical model allow? Here are the answers.
A circular economy marketplace is first and foremost a marketplace, i.e. a platform bringing together several buyers and several sellers. Unlike a traditional marketplace, the circular economy marketplace differs in that the products offered for sale or purchase are second-hand products. The other notable difference is that on C2C circular economy platforms, it is not uncommon for the same person to alternate between the role of seller and buyer. For example, on Le BonCoin, one can be a seller of a coffee table one day, and buy a mouse pad the next. This atypical operation implies more complex management of payment flows, which must be kept in mind.
Drivy, Vinted, Backmarket… Circular economy marketplaces are gaining momentum with individuals, but also with professionals. Recycling used or damaged products, reselling or renting second-hand products, circular economy marketplaces allow companies to reduce their storage costs, take control of the second-hand market for their products, or add value to their inventory.
Depending on the business model of the circular marketplace, the advantages can be multiple:
Rather than letting other players organize the second-hand market for your products, create a marketplace dedicated to the sale of your brand’s used products.
To compete with Vinted, retailers create a C2C marketplace, where customers can resell their clothes from your brand to other buyers. By choosing a “phygital” mode of operation (online and in-store), with an in-store drop-off and pick-up, your C2C marketplace transforms your physical store into a logistics center. Indeed, to send or receive their package, sellers and buyers have to go to one of the stores of the brand. This additional traffic in the store represents a good opportunity to reconnect with old customers and offer them additional products. It is also a way to continue the customer relationship as much as possible, by increasing loyalty. Finally, setting up a site for a clothing clearance sale allows you to commit to a more eco-responsible fashion.
If you’re a business with dormant inventory, creating a circular economy marketplace allows you to extend product usage time and reduce storage costs by allowing businesses with underused equipment to rent or sell it to other professionals, with secure online payment.
For the different entities of the Engie group to buy and sell industrial maintenance equipment to each other, the Engie group has launched its circular economy marketplace: BeeWe. This platform aims to give a second life to maintenance parts, but also to ensure better inventory management across the group. BeeWe thus helps to reduce the downtime of parts and to sell unused or dormant equipment at a competitive price. Such a platform is part of both the circular economy and e-procurement.
In industry, it is not uncommon to end up with excess raw materials destined to be thrown away, such as scrap materials. To reduce the volume of waste and the associated costs, it is better to give a second life to these materials on a circular economy basis.
This idea has been followed by several platforms, such as BatiPhoenix, a marketplace dedicated to the reuse of construction materials, or Materiopro, a marketplace for unsold materials between professionals and individuals. In the same field, there is also Backacia, a marketplace dedicated to the reuse of construction materials and equipment. Although they differ in some respects, these three examples prove that it is possible to give value to stock or raw materials that do not have any, while benefiting from a virtuous image for the environment thanks to an ecological approach.
Whether you are in industry or services, B2B or B2C, the application areas of circular economy marketplaces are multiple. In all cases, you will need a robust payment solution that can adapt to your business rules. As a certified payment service provider, Lemonway is already supporting several circular economy platforms. Are you planning to launch such a platform? Do you have questions about the payment solution to implement? Tell us about your project!
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