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Rental or Flexible Product Ownership: A Guide for Product Reuse

The recommerce business is growing 20x faster than the retail market. Most merchants are missing out on the gains by not offering circular product ownership solutions.

Hendrik Roosna, CEO at Fairown
Hendrik Roosna, CEO at Fairown
Rental and flexible product ownership with a buyback service enable merchants to grasp these benefits.

Both are circular product ownership models. Both with their own twist.

Let us break it down for you, fair and square.

  • Why is this relevant for merchants right now?

  • How do rental and flexible product ownership endorse product reuse?

  • What value do these solutions create for consumers and merchants?

Merchants as a Hub for Product Reuse

The current practice works like this: merchants only offer a purchase option and then leave the customer alone with the product they won’t need after a while. This doesn’t build loyalty nor support sustainable behaviour.

Merchants should be the hub, where consumers get and return products.

That type of product reuse model actually solves consumers’ problems. Let’s say that someone needs an entry-level drone for a new hobby or for only a few days for filming a wedding. Making both solutions available at the checkout is critical for standing out from an old-fashioned retail model and introducing the circular economy approach..

Rental and flexible product ownership with a buyback service both deliver on this front. Let's clear the air on the main differences from consumers’ and merchants’ point of view.

Rental from Consumer's Perspective

Rental is a good fit for consumers who want to use products for a short time, and already know this at the moment of purchase. For example:

  • renting a car for a weekend trip;

  • renting a drone to capture the best views of this trip;

  • renting a wide-screen TV to get an immersive experience of their favourite sporting event.


Rental is not a good fit if the consumer is in between, and isn't sure if they want to use the product for longer or eventually buy it out. In that case, flexible product ownership with a buyback service guarantees the freedom between using or owning, and better value for money through lower monthly payments.

Rental from Rental Provider's Perspective

There are two main issues that rental providers run into in the current economic state.

1. High Interest Rates Increase Prices

Money is expensive, hence the rental payment for the consumer is relatively high. Higher monthly payments only make sense in a short term. For example, renting a car for a week for €200 might be tolerable, but for three months, it's a different story.

Consumers who choose rental for longer periods are more likely to have poor credit behaviour patterns, as renting for a high fee becomes the only alternative they have. Why? They don't qualify for long-term financing programmes with lower interest rates that require better credit rating. This increases credit risk for the rental provider.


2. Short-Term Rental Doesn't Serve a Mass Market

Most consumers want to use products for their useful life cycle, and then switch to a new one. In these conditions, the rental offering becomes too expensive as the unit economics of the rental model don't support longer usage periods at these price points. Long-term rental becomes the only alternative for people who can’t afford to buy, which makes the rental portfolio riskier.

Flexible Product Ownership from Consumer’s Perspective

The advantage of flexible product ownership with a buyback service is lower monthly price for longer periods.

Flexible ownership with a buyback service fills the market gap between rental and one-off purchases. Above all, it suits consumers who seek flexibility and sustainability.

Thanks to the buyback, consumers can return their products at the end of the usage period, decided upon the moment of purchase. This eliminates all the hassle around getting rid of used products: looking for a buyer, setting a price, organising transportation, etc. Therefore, contributing to sustainability and product reuse.

handing over a smartphone

What about flexibility? With the flexible product ownership model, consumers can decide whether to return, upgrade, or keep using their products. They get the best of both worlds.

Flexible product ownership with a buyback service is a good fit for:

  • technology devices, which have new models coming out often, such as smartphones, laptops, or gaming consoles;

  • products that inherently have a short life span and must be switched in a few years, such as kids products;

  • products where energy efficiency matters, such as home products;

  • products where merchants can create additional value by bundling up services with products, such as maintenance, winter storage, installation, insurance, etc.

Flexible Product Ownership from Merchant’s Perspective

Flexible product ownership with a buyback service is a risk-free, competitive, and scalable payment plan.

The flexible product ownership model delivers lower price points thanks to lower interest rates. Fairown offers this payment plan and takes care of product financing for you by negotiating the rates with banks. You get paid upfront and your customers enjoy lower prices for longer periods.

You can improve the checkout experience by offering rental and flexible product ownership side by side. This brings more value to both types of consumers:

  • who seek a short-term rental;

  • who are interested in flexible product ownership across an entire useful product life cycle.

Flexible product ownership with a buyback service is a win-win partnership to extend your offering.

There's no capital drag, and you can instantly distribute a completely new and distinctive offering across your partner network, who already use your rental service. Thereby, accessing the same consumers with a more competitive offering.

As a merchant or rental provider, you can easily integrate Fairown's white-label software into your existing system.

If you have convinced customers to take products through a rental offering, and have partnerships with large merchants and brands, what sounds better than affordable prices and long-term customer relationships? Fairown has the experience of launching such offerings in cooperation with rental companies.

Also, check out our complete guide for merchants on product or hardware subscription models.

Did this spark your interest? Reach out and let’s talk about how we can help your business grow.


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