.png)
Refurbishment is at the heart of recommerce, transforming used or returned products into valuable inventory. But how do businesses determine what can and should be refurbished? How do they optimize their operations for maximum efficiency and profitability?
In the latest episode of the ReCommerce Podcast, Tuomo Laine, CEO of TWICE Commerce, breaks down the entire refurbishment process—from receiving and sorting to grading, repairing, and reselling. He shares how businesses make critical decisions, such as when an item should be refurbished, when it’s better to repurpose it for spare parts, and how data-driven tracking can optimize the entire process.
This article builds on that conversation, offering a structured framework for understanding refurbishment flows and practical takeaways for circular commerce businesses looking to improve their operations.
At its core, a well-functioning refurbishment flow follows a logical decision-making process to determine the best path for every returned product. The process can be broken down into three major phases: identification, initial sortation, refurbishment decision(s), and unique listing creation.
Before refurbishment can even begin, each product must be properly identified and tracked. Without clear tracking, businesses risk inefficiencies, misplaced inventory, and lost profitability. As Tuomo explains in the podcast, the earlier a business starts tracking items individually, the better they can optimize their processes and measure operational performance.
Many companies rely on RFID tags, QR codes, or serial numbers to follow each item through its refurbishment journey. This enables them to monitor how long an item spends in each phase, track costs associated with repairs, and ultimately improve their margins. Some manufacturers are already integrating durable tracking solutions, making it easier for refurbishers to process returns without additional labeling.
By moving from aggregate inventory tracking to item-level tracking, businesses gain deeper insights into how each product performs over time, helping them make more informed decisions about repair, resale, or recycling.
Once a product is received, the first step in the refurbishment process is sorting and assessing its condition. This phase is crucial, as it determines whether an item can be immediately resold, needs cleaning or repair, or should be broken down for spare parts.
Sortation is often different based on the product category. Electronics, for example, may arrive individually with some declaration of their condition from the sender. Clothing, on the other hand, often comes in bulk, requiring sorting teams to separate items based on wear and tear.
A well-optimized sortation process helps businesses quickly route products to the right refurbishment path, preventing unnecessary delays and maximizing efficiency.
Not everything that can be refurbished should be refurbished. This is where businesses must weigh physical feasibility against economic viability.
Physically, an item may be repairable, but if the refurbishment costs—spare parts, labor, and time—exceed its potential resale value, it may not be worth the effort. Market demand also plays a role; an older smartphone that was profitable to refurbish last year might not be worth it after a new model launch.
In the podcast, Tuomo highlights how businesses use data to continuously adjust their refurbishment decisions, tracking real-time costs and resale values to ensure profitability. By integrating inventory data with pricing insights, businesses can make smarter calls on whether to refurbish, repurpose, or recycle a product.
When refurbishment is too costly or impractical, businesses must decide on the Next Best Use for the item. This can mean:
A great example of this is the electronics industry, where refurbishers often salvage components from water-damaged or broken phones to use in future repairs. Similarly, some apparel companies repurpose unsellable garments by breaking them down into fabric fibers for new production.
Tuomo shares how businesses that optimize this process can turn potential losses into secondary revenue streams, making even non-refurbishable items valuable in a circular business model.
Once an item is successfully refurbished, it needs to be marketed effectively. One of the biggest mistakes businesses make is using generic product listings, rather than showcasing the actual item for sale.
Customers buying refurbished goods want transparency. Unique listings with actual product photos and detailed condition descriptions build trust, reduce return rates, and improve conversion rates. Some businesses, like refurbished bike marketplaces, have perfected this by photographing each individual bike and noting any wear and tear—ensuring buyers know exactly what they’re getting.
For rental businesses, this process is slightly different. Since the same item is used multiple times, the focus is on maintenance tracking rather than resale. Companies need a system that records each rental cycle, maintenance history, and condition updates to determine when an item is ready for final resale or decommissioning.
A well-structured refurbishment flow is not just about bringing products back to life—it’s about balancing efficiency, profitability, and sustainability. Companies that track their refurbishment process carefully can:
As Tuomo emphasizes in the ReCommerce Podcast, refurbishment is where margins are made or lost. Businesses that master these processes—by leveraging tracking technology, optimizing sortation, and refining their resale strategies—gain a massive advantage in the growing circular commerce economy.
To hear the full conversation and get deeper insights from industry leaders, listen to the latest episode of the ReCommerce Podcast on Spotify, Apple Podcasts, or YouTube.