Used product resale through a manufacturer-operated customer-to-customer platform: Profitability and environmental impacts under third-party competition

Abstract

The growing use of third-party customer-to-customer (C2C) platforms has transformed secondhand markets by enabling consumers to trade used goods with ease. Alongside these third-party platforms, some manufacturers have launched free, self-operated C2C platforms to facilitate the resale of their own used products and support sustainability goals. We examine the economic and environmental impacts of encouraging secondhand trade through such manufacturer-operated platforms in the presence of a third-party platform. Using a two-period product lifecycle embedded in an infinite-horizon framework, we analyze three scenarios: no C2C platform, a third-party C2C platform, and the coexistence of a third-party and a self-operated C2C platform. Our findings reveal that when a third-party platform exists, self-operated resale platforms enhance profitability for manufacturers with strong brand recognition, given viable resale activity. Strong brand recognition enables these firms to attract a sufficient volume of secondhand transactions to their own platform. In contrast, manufacturers with weaker brand visibility incur profitability losses from such initiatives. For low-durability products, self-operated platforms can simultaneously deliver higher profit and lower environmental impact, aligning financial and sustainability outcomes for firms with strong brand recognition. However, introducing a self-operated C2C platform alongside a third-party option is not always environmentally beneficial. For moderate-durability products, such platforms worsen environmental outcomes even though profitability may increase. From the consumer perspective, sellers benefit from higher resale prices, while buyers face increased costs for used goods when a self-operated C2C platform is introduced alongside a third-party option.