This startup just raised $16 million to help keep returned items out of landfills

Entrepreneurs

Arrive Recommerce aims to help retailers resell returned products, helping them save money and keep merchandise out of the dump.
Cemetery for used clothes in the Atacama Desert
A landfill filled with clothing in the Atacama Desert. Image: Getty

Every year, retailers lose some $212 billion to online merchandise returns, according to the National Retail Federation. That’s because people end up returning about one in five products they purchase, and 30% of those aren’t in good enough shape to be resold for their full price, according to the cofounders of Arrive Recommerce, Rachelle Snyder and Ross Richmond.

Today, Arrive Recommerce, which aims to help retailers manage and streamline the process of re-selling returned items, announced $16 million in funding to address this problem, bringing its total funding to $25.1 million. The Santa Monica-based startup has already amassed a list of clients that includes Yeti, Burton Snowboards, the maternity brand Blanqi, and the premium home goods brand The Citizenry.

This latest funding round was co-led by Javelin Venture Partners and Climatic VC, with participation from other funds including Maersk Growth, Sidekick VC, Cosmic Venture Partners and Freestyle VC.

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Arrive Recommerce Co-Founders Rachelle Snyder and Ross Richmond

Daniel Brittain Photography

To help retailers to resell their returned items, Arrive Recommerce’s software assigns a unique serial number to every returned item, which allows the retailer to store data about the condition in which it was returned and the corresponding price. The item is then linked back for resale in the brand’s storefront.

As online sales of goods in the U.S. have boomed, so have their returns. The National Retail Federation estimates that 16.5% of online sales were returned – that is approximately $212 billion out of the $1.29 trillion in online purchases made in 2022. The losses for retailers, experts argue, is even bigger, as those figures don’t include the cost of shipping. “Retailers know that they need to move returns through their supply chain quickly in order to increase the possibility of a resale,” said Tom Enright, a researcher at Gartner who focuses on supply chain in the retail industry.

But retailers sometimes see little point in wrangling the process required to resell them at less profitable, “pre-owned” prices. That’s where Arrive Recommerce comes in. The re-sales they help process average 60% of their original price. That’s great for retailers and for Arrive Recommerce, which says that kind of success rate has increased revenue by some 430% compared to this time last year.

When retailers decide not to both resell returned items, there are additional climate costs. “We’re filling up landfills with fast fashion that’s returning at a higher rate than ever,” said Tony Sciarrotta, executive director of Reverse Logistics Association.

By reselling products, Arrive Recommerce’s technology can also help retailers reduce this waste. Retailers “are able to divert these products from landfill to now being sold again,” said Arrive Recommerce COO and co-founder Ross Richmond.

With the new capital injection, they plan to expand its small team and further scale its technology and customer base with an eye towards sustainability and profitability. Said Snyder, “Our vision for the company is a world without waste.”

This article was first published on forbes.com and all figures are in USD.

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