Ben Whitaker, director for EMEA for B2B online auction platform B-Stock, which specialises in reselling liquidated, overstock and returned stock and works with some of the world’s largest retailers, explains how the secondary market is set to make huge gains from Brexit
Can you explain how B-Stock differs from other auction platforms?
We are a Silicon-Valley based company that provides a secondary market for retailers to access for e-commerce returns. In simple language, that means that when someone returns something to a website or retail store, that stock can’t always be resold as brand new, at the same time it can’t just be thrown away. So, there is now a very significant secondary market out there for all sorts of products, in all sorts of conditions. What we do is connect B2B buyers and sellers together. Our buyers buy off our clients to resell to consumers.
How does B-Stock stand to gain or lose from Brexit?
No one knows what Brexit is going to look like yet, unfortunately, but potentially there are a couple of really interesting scenarios for us as a business. Scenario one is that supply chains for new products coming in from Europe get disrupted. Let’s use the example of washing machines, a large proportion of the washing machines that are sold in the UK are not manufactured in the UK, they come in from central Europe. If someone’s washing machine breaks down in the UK and there is a disruption in the supply chain, they won’t want to wait six weeks for a new one to turn up, they are going to have to get a replacement from somewhere. If there is any disruption to the supply of brand new inventory, people will look to other sources and consequently what could happen is that the prices of secondary market products could increase significantly, just through pure supply and demand.
We’re already starting to see a trend away from the brand new anyway. Millennials and Generation Y tend to not be as brand conscious. They want to buy things that provide a service and they want it immediately. Brexit could further exacerbate changes in consumption patterns that are starting to happen already.
The second scenario that could happen is that the UK could actually sit outside of the European Economic Area (EEA). There are a lot of brand owners who have got agreements with distributors in and around Europe that state that if their inventory gets returned to them it can’t be resold within the EEA. From the end of March next year that could potentially exclude the UK. If the UK sits outside of those distribution areas then that puts the UK in an interesting place, potentially the UK could sit between the EU and the rest of the world as a gateway for products.
So, you’re one of the few firms that we talk to that could really benefit from Brexit?
We really could do very well from Brexit. Brexit could potentially be huge and a really, really big opportunity for us. The global secondary market is probably worth this year around $800 billion. It’s an absolutely massive hidden market that a lot of people don’t think about when they send their shoes back, when they send a piece of furniture back, when they order a mattress that doesn’t fit, they just think well it’s free returns. All of that stock has to go somewhere.