Secondary Markets in E-commerce


Whenever you buy a used product from a third party, you use the secondary market. Consignment shops and garage sales are both considered to be secondary markets, but secondary markets are not limited to traditional brick and mortar retail. Secondary markets have taken over many industries, in fact, the sneaker industry itself has a secondary industry that is estimated to be worth more than $1 Billion.


Reselling Tickets

Concerts, plays, and important sporting events can sell out extremely quickly, which means only a small percentage of people even get a chance to purchase a ticket. One of the reasons these tickets sell out so quickly is because they are actually supposed to sell out quickly. When a particular event has a significant amount of buzz around it, people who have no interest in the event itself will buy tickets in order to resell them at a higher price. They know the tickets are pricey as it is, and the exclusivity makes them all the more valuable.


On the other hand, websites like StubHub let people make the money back on their tickets when they realize they’re unable to attend an event or want to make a quick buck.  The ticket scalping game is no new market, just rebooted and further reaching with technology.


Various goods on sale


Reviving Special Sales

Limited time sales do a good job of urging your customers to take action quickly, but what happens if you still have products left over? If you want to take hold of your own secondary market, your business can create a separate platform for items that weren’t claimed during these special events. This way your leftover inventory doesn’t continue to take up space in the warehouse and your customers get another shot at the products they missed out on at a marked-up price. You can make it a truly “secondary” market by allowing customers who did receive these official products to resell them on your platform, which can also be reassuring to the new consumers.


Reusing Vehicles

If you’re looking for a car that’s more affordable than the brand new vehicles at the dealership, the secondary market is the way to go. Used cars are popular among young people who are just starting to drive, and some can be just as effective as brand new ones. It’s not uncommon to see a young person driving a car from a previous decade, and modern cars are so durable that they often work perfectly fine.


Automobile manufacturers typically release a new line of vehicles on a yearly basis. Every year’s model is subtly—or sometimes vastly—different than the model that came before. This means that every model of vehicle is only created for a limited amount of time before manufacturers move on to the next project. If a customer falls in love with a specific model from a certain year, he or she will have to look to the secondary market in order to acquire one.


There are plenty of used car lots where you can look around for a car that piques your interest, but the internet makes things easier. Dealerships that use their websites to help sell their used cars will provide online search tools that let you browse through what’s available. You can search by year, make, and model, and you can filter by factors like price and mileage as well. Some automotive companies will also sell new and used car parts and accessories via their websites.


"A secondary market is essentially a form of recycling:  A person buys a product, uses it, and then sells it to someone else, and the  cycle continues on from there."  -Click to Tweet-


Identifying Counterfeits

While the secondary market has its advantages, there are also some risks involved. Fortunately, you can avoid them if you know what to look for. One of the main problems with the secondary market is counterfeiting. There are shady businesses out there that try to trick customers into thinking they’re buying an original piece when they’re really looking at a knockoff. When you can only see a couple of small images on an e-commerce website, it can be difficult to confirm that you’re getting what you’re looking for. Be careful when you browse secondary e-commerce markets and look into the sellers to make sure they’re legitimate.


Holiday Returns

Thanks to an abundance of significant sales and lengthy shopping lists, the holiday season is a spending frenzy. Unfortunately, not everyone likes what they get as gifts, which means the post-holiday season weeks are more of a returning frenzy. Some products will have been opened from their original packaging and some will still be sealed; some will be returned to the original seller, and others will be sold through the secondary market. The time following the holidays makes significant contributions to the secondary market, especially on the e-commerce level.


Benefits of the Secondary Market

  • Attractive Deals — Informed consumers are always looking for the best deals, and the secondary market is often where to find them. Used products command a smaller price than brand new products, even if the used ones are still in mint condition. People browse through online resell websites like eBay, Amazon, and Etsy to find the best deals on the products they’re looking for. There are also physical retailers like consignment shops and thrift stores where people can find used materials at low prices.


People near boxes


In the reverse direction, the secondary market can be beneficial to businesses that specialize in reselling rare or limited edition items. Collectible items go up in value over time, and the secondary market provides a platform for sellers to connect with collectors who might be interested in these hard to find products. These same sites like eBay and Amazon offer attractive deals for both buyers and sellers.

  • Greener Practices — Believe it or not, the secondary market does good things for the environment. A secondary market is essentially a form of recycling: A person buys a product, uses it, and then sells it to someone else, and the cycle continues on from there. When existing products remain in circulation, it takes less virgin material to create new ones and keeps useful materials from going to landfills. This minimizes our impact on the planet and reduces our carbon footprint, all while providing consumers with better deals.

  • Better Brand Image — There’s a lot that businesses can do to influence the secondary market, particularly regarding their own products. Some companies will even create their own outlets where customers can buy used or returned products at discounted prices. Buying from a trustworthy source is preferred, and it makes customers more confident in their purchases. There are few things more frustrating than purchasing a product online only to find out it’s a knockoff and doesn’t work nearly as well, and this method eliminates the chances of that happening.


Being involved in the secondary market also looks good for your brand. It shows that environmental friendliness is part of the company’s philosophy, and it never hurts to have your business associated with green practices. Some customers specifically seek out companies that care about the environment and exclusively work with green companies.


Whenever something is bought and then sold again to a new buyer, it’s the secondary market that’s in action. Secondhand tickets, leftover promo products, and used cars are common examples, and e-commerce plays an important role in getting them back into circulation. The secondary market may offer consumers better deals while protecting the environment and bolstering your brand’s public image, so it’s a win-win across the board.

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