Amazon presented two new Fulfilment by Amazon (FBA) programs designed to give more products a second life while making it easier for its third-party sellers to resell customer-returned or overstock items.
The goal is to move towards a circular economy. Once in full motion, the ecommerce giant expects to give more than 300 million products a second life each year.
FBA Liquidations, available in US, Germany, France, Italy and Spain, and soon the UK, gives sellers the option to use Amazon’s existing wholesale liquidation partners and technology to recover potential losses on returned and overstock inventory.
The second program, FBA Grade and Resell, is now available in the UK and will be in the US by end of year; and in Germany, France, Italy and Spain by early 2022. This program gives third-party sellers the option to sell returned products on Amazon as “used” items, instead of having the items sent back to them or donated.
“Customer returns are a fact of life for all retailers, and what to do with those products is an industry-wide challenge,” said Libby Johnson McKee, director of Amazon WW Returns, ReCommerce and Sustainability. “These new programs are examples of the steps we’re taking to ensure that products sold on Amazon — whether by us or our small business partners — go to good use and don’t become waste. Along with existing programs like FBA Donations, we hope these help build a circular economy, maximize reuse, and reduce our impact on the planet.”
Just two months prior to the announcement, British broadcaster ITV reported that destroys millions of items of unsold stock at one of its 24 UK warehouses every year, including smart TVs, laptops, drones and hairdryers, causing a lot of backlash. Unfortunately, Greenpeace points out, the practice of destroying unsold stock isn’t new.
In response, Amazon says it is working toward a goal of zero product waste and that no items are currently sent to landfill in the UK.
Currently, about 50% of items purchased in the US alone are returned, costing almost $350 billion a year, with 5 billion pounds of clothing and textiles going to US landfills each year. Additionally, more than 50% of people don’t return products since the return experience is too burdensome, making it a $700 billion problem.
Thankfully, consumers are becoming more aware of the environmental impact of conventional retail and are in demand for circular models. This has pushed a growing number of brands, particularly in apparel, to deal with their own resale and repair offerings. The second-hand clothing market is expected to top $77 billion in the next five years.
“With its size and scale and proper follow-through, Amazon has the potential to make a significant dent in global product waste and offer models for other retailers to follow.”
