Trade In the Old One, Get the New One – All at the Same Store

01 /The Concept

Most upgrade cycles stall at the same bottleneck: you can't buy the new thing until you've dealt with the old one.

The need to upgrade comes up constantly – a kid outgrows a bike, a more powerful laptop drops, Apple releases a new iPhone and the old one suddenly feels embarrassing.

But to buy something new, you first have to deal with getting rid of the old one.

Fairown's key insight is that the item can be returned to the same store it was purchased from, at a price guaranteed at the time of purchase. A smartphone bought for €799, for example, can be handed back after 24 months for €249. A mountain bike purchased for €3,899 returns €1,500.

There's a catch: the buyback amount isn't paid in cash. It's applied as credit toward a new purchase at the same store.

This creates roughly 60% return customer rates for retailers – minus those who broke the product, kept it, or chose to sell it themselves.

Fairown's role in this is providing the underlying platform and services: payment processing, purchase financing, buyback pricing, and resale of returned goods. Returned items are shipped to Fairown, which wipes data, repairs damage, refurbishes them to sellable condition, and lists them on secondhand marketplaces – or sends them for recycling if nothing else is possible.

Stores get a white-label mini-site with their own branding and only need to keep the product catalog current. Or they can integrate Fairown's functionality directly into their existing store via API.

Fairown started in Estonia but now operates in 9 European countries, where more than 100,000 purchases have been made under this model. The company just closed €5.7M in new funding to strengthen its position in Germany – its second round, following €1.3M raised at launch in 2021.

02 /Why It Matters

In late August, [a review covered](/review/vygody-nastolko-ochevidny-chto-tak-ono-i-budet) a very similar model from German startup Topi. The key difference: Topi implements this for B2B – businesses buying through the same model. In that context, what would otherwise be a consumer installment plan becomes an equipment rental payment that companies can book as an operating expense, reducing their taxable income. Topi has raised $103.6M, including €50M in debt just this August.

The elegance of both Fairown's and Topi's model is that they don't own inventory or run storefronts – their retail partners do that. Of course, the trade-off is that retailers capture the bulk of the margin.

So naturally, some startups have decided to go direct – building their own stores operating on the same model.

Grover ([related review](/review/vzjat-v-kredit-ili-v-arendu)), operating in Europe, has raised $2.3 billion, the vast majority of it as debt – which signals the model actually works, since these companies are comfortable taking on debt to fund it.

In Southeast Asia, Singapore, and Australia, Y Combinator 2022 graduate Circular ([related review](/review/shans-poka-drugie-ne-prosekli-fishku)) runs the same owned-store model and raised $7.6M last fall.

Notably, guaranteed-buyback models aren't limited to electronics. Croissant ([related review](/review/reshaem-staruju-problemu-no-vryvaemsja-na-novyj-rynok)) built a platform for clothing retailers that offers customers a guaranteed buyback price within 12 months of purchase. Returned items get refurbished and listed on secondhand marketplaces. Croissant raised $24M in its very first funding round last summer.

03 /Opportunities

Guaranteed-buyback models only work because more people are buying secondhand. Without robust resale demand, the whole model falls apart at scale.

In several major markets, 50–60% of consumers surveyed had bought at least one used item in the past 12 months.

According to eBay research, 77% of their buyers say purchasing secondhand has become more normal and acceptable to them. The drivers: saving money, environmental awareness, and access to premium brands at lower prices.

The secondhand conversation usually centers on clothing, footwear, and accessories – and for good reason. The resale apparel market is growing three times faster than the broader clothing market, and is projected to reach $350 billion annually by 2028.

But refurbished and secondhand electronics are also accelerating. UK retailer Currys reported late last year that a third of British consumers planned to buy refurbished electronics that winter – which turned out to be more popular than buying secondhand clothing. Globally, the refurbished electronics market is expected to roughly triple over the next decade to reach $124 billion.

This means the scalability of the buyback model will keep growing across all product categories – making platforms built on this model an increasingly attractive opportunity.

The most interesting approach remains the Fairown / Topi / Croissant model – because it doesn't require building your own store, managing inventory, or acquiring customers from scratch.

The key is getting into existing stores before the competition does. Because once something is working well, most retailers won't bother ripping it out and replacing it – and that same stickiness that works in your favor today will work against you if someone else gets there first. So who's ready to move?