The next big wave in retail is the exact opposite of innovative and technological. It has the potential to revolutionize everyone’s systems, and yet it’s the oldest idea in the world: it is the trade in old things. The race is on to create and scale systems to manage this unimaginably huge (basically: all things that aren’t broken), but unwieldy, market, because secondhand-plus-added-tech can equal huge margins—and it’s intrinsically sustainable.

"No reseller is going to solve the ROI gap within their own warehouse; we have to look at the whole supply chain as a system, integrating old with new"

Personally I’ve always preferred items with a previous life and a story behind them, which is what led me to found the first fashion C-to-C trading site back in 2010. Five years later, pre-owned apparel e-commerce has been estimated as a $34B opportunity—which VCs have backed to the tune of $400 million, and climbing (Thredup: $131m; The Real: $83m; Posh mark: $47.2m). In 2012 all kinds of resale outlet (including bricks-and-mortar) represented $163.8B in revenues. In “recommerce” (resale + ecommerce), clothing is the clear frontrunner and obvious target (everyone owns some), but more verticals are being addressed by the month--home furnishings and kitchenware (Chairish, Apt Deco, Move Loot, Krrb), toys and baby equipment (Kid to Kid, Once Upon A Child, Childrens Orchard), media and electronics (FYE, Decluttr, Nextworth...) and major retailers are testing the waters, such as Wal-Mart which successfully entered the $2B used video game market in October 2014 and Target, which has just partnered with online clothing reseller ThredUp. Then of course there are the giant generalists Ebay, aggregators of all old gear under the sun, Amazon, emperor of old books and more, and post-IPO Etsyis also looking to streamline its secondhand sales in fashion and furniture, even though it is not it’s core business.

The advantages of harnessing secondary markets go deeper than sheer profit, since customers benefit in several ways. The first wave of online resale took of f post-recession when consumers were at their most cost-conscious. Add to the budget pricing the (at least) 55 percent of global online consumers now claiming to actively seek ecological and sustainable products, and you see the PR value of demonstrating a commitment to recycling through reselling.

Monetizing waste is attractive, but nobody said it was easy. As recommerce matures and attempts to scale, the endemic pain points are ever more starkly exposed. When the buyer can’t touch, whether it’s designer handbags or cast iron cookware, quality control is an issue, with a concomitant returns headache. Price points are forever morphing, especially in clothing where perceived value is so fluid. The worst problem is the forever singular SKU. There is no economy of scale. The complexity of inventory systems and fulfillment is exponentially multiplied, and no 3PL specialist has yet cracked that issue. Product photography alone can be ruinous: Margins are suddenly not looking so generous.

So what’s the solution? Unsurprisingly, it is not simple, nor linear. In order to be viable the secondhand market cannot continue to operate in isolation from the primary. Equally, primary markets can learn to milk value from their own waste--gaining control of their past hits, their backlists, instead of having their old stock interfere with their own market penetration. In other words, no reseller is going to solve the ROI gap within their own warehouse; we have to look at the whole supply chain as a system, integrating old with new. For that to happen we need a combination of assets: databases, smart systems, and support services.

A useful model for a scaled up secondhand market is the used car industry. It is organized and efficient. The accurate resale value of any vehicle is available to all, resetting continuously as the crowd-sourced dynamic database updates. And for car manufacturers, a higher-than-average resale value is an important selling tool—the secondary market enhancing the primary. Of course, a Kelley Blue Book-style Fashion (or furniture, or toy) database is a complex proposition, and yet there are existing price matrices—plus millions of consumers shopping for secondhand clothes online, with some 44 percent of them already buying-to-flip —to kick start it. Past a certain point such a resource—I call it the Valuator—could become indispensible, making sense of a completely chaotic market and providing granular data sets for all sides: Shopper, seller, and even the original manufacturer who can track their own products’ afterlife (just like Subaru does). The used book market also has a Valuator, accidentally caused by Amazon—though, unfortunately, instead of supporting the industry that feeds it, this one is disrupting, if not killing, book publishing (a monopoly will do that). But that’s another story.

It’s not hard to see how a Valuator would help in developing smart systems for secondhand selling: inventory trackers, universal SKUs, regional sales trends, you name it. And with enhanced logistics, needed services—listing, PPS, storage—can grow to enable goods to reach market more efficiently. Currently such services exist, individually operated (Ebay Valet, The RealReal’s Consignment Kit, ThredUp/Target’s Cleanout Kit...), which cannot be cost efficient. To scale the entire resale sector, it’s got to be centralized. We need a whole new support industry to be able to extract maximum value—from the stuff trapped inside all our homes.

Finally, to address the elephant in the room: yes there is an element of idealism in this scenario. Perhaps it calls for more cooperation between competitors than exists in the land grab currently on display. But idealism... pays. Streamline the whole system and in the shakeup entirely new revenue streams and sub-industries materialize: in data mining, in storage and disposal, in recycling, in customization, in logistics—even in courier services. Just picture the potential in this market and consider: Resale is only going to grow. So let’s do it better.