Toronto-based retail and logistics startup SecondShop has officially launched the B2C side of its re-commerce platform, which aims to make shopping for secondhand goods as easy as buying from mainstream retailers.
The launch comes roughly five months after the Toronto-based startup closed a previously unannounced $2-million CAD seed financing led by Harvest Venture Partners. Several angel investors also participated in the round. However, SecondShop declined to disclose their names to BetaKit.
“We immediately saw the opportunity to build what we think is a new vertically integrated opportunity in Canada.”
SecondShop’s “re-commerce” platform is designed to use reverse logistics to give new life to over returned goods. The startup is incubated out of Harvest Builders, the venture studio affiliated with Harvest Venture Partners, that is known for building startups like Neo Financial, OneVest, and Walnut Insurance.
After finding early success with its B2B offering for wholesalers and retailers, Alex Gold, founder and general partner at Harvest Venture Partners, believes SecondShop has a first mover advantage in the secondary retail market.
“We do believe this is the creation, effectively, of a new vertical,” Alex Gold, founder and general partner at Harvest Venture Partners, told BetaKit in an interview.
SecondShop is led by CEO and founder Cedric George, who is no stranger to the retail and logistics markets. In 2005, he started the Calgary-based home delivery company Custom Delivery Solutions (CDS), which specialized in the white-glove delivery of bulky items, such as furniture and appliances.
CDS provided warehouse services, including reverse logistics, and over-the-road long-haul transportation, with the final mile being the primary focus and biggest driver of its operations. After scaling in the Canadian market, CDS sold to third-party distribution and warehousing company Metro Supply Chain Group in 2019 for an undisclosed amount.
George said his experience working with large national retailers gave him a unique perspective on the entire supply chain—not just the transportation of goods, but their full life cycle. He noticed that once a product becomes undesirable or loses its brand-new, factory-fresh appeal, its journey through the supply chain can become complicated and inefficient.
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“In high value, big and bulky items, the logistics side of it is really cost prohibitive, so retailers that don’t have a really robust ‘keep it sold’ type of program end up eating a ton of transportation cost,” he explained. “Even when those retailers try to sell, the repurchasers of those products have to deal with the same problems.”
After developing a logistics network that initially focused on the forward movement of goods, George saw an opportunity to apply his knowledge to reverse logistics, which refers to the process of managing the return, housing, and resale of products that are no longer in brand-new condition.
But George wasn’t just looking to solve logistics problems for wholesalers and retailers. While secondhand shopping has increased in popularity dramatically thanks to platforms like Facebook Marketplace, the buying experience is not always seamless.
“If you’re a Facebook Marketplace type of purchaser, you’re not getting any bells and whistles, and you might not even get the product you set out to get,” George added.
Seeing the need for a more efficient reverse logistics solution and a better secondhand marketplace experience, George reached out to the team at Harvest Builders to begin building SecondShop. The startup is the third internally incubated business from Harvest Builders.
“We were connected through one of our investors with Cedric, and we immediately saw the opportunity to build what we think is a new vertically integrated opportunity in Canada,” Gold said.
“From our standpoint, everything needs to find a home that doesn’t include a landfill.”
Cedric George, SecondShop
Gold explained that changing consumer sentiment is making second-hand purchases a first choice for Canadians due to sustainability concerns and rising prices. He said winning in this market requires a comprehensive solution: combining logistics and warehousing with accessibility features like warranties, financing, and loyalty programs to attract a broader consumer base.
That’s what George and Gold believe SecondShop can offer. The startup sources overstock, open box, “scratch and dent” and like-new products directly from Canadian retailers and manufacturers, and offers consumers access to deals on these products from an online marketplace. SecondShop’s current offering encompasses appliances, such as dishwashers or laundry machines, as well as furniture, electronics, and tabletop appliances.
SecondShop’s B2B side has been in operation since January and has moved over 1,000 tons of merchandise. While building its tech platform, the team focused on wholesale operations, allowing the startup to generate cash flow early.
George said the startup quickly became revenue-generating by capitalizing on George’s established relationships with major Canadian retailers, allowing them to secure inventory and launch reverse logistics operations. The startup claims it is currently growing revenues by over 40 percent month over month.
However, George sees becoming a solution for retailers and wholesalers as only part of the overall strategy.
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SecondShop is also focused on providing Canadian consumers with a trusted secondary marketplace, offering features like secondhand warranties, buy-now-pay-later options, and loyalty programs—benefits not typically found on reselling platforms like Facebook Marketplace. Gold believes these offerings are key to mainstreaming secondhand shopping for consumers.
With the B2B and consumer-facing sides of SecondShop’s product now live nationally, the startup is using the March equity investment to scale, focusing on growth through consumer acquisition and hiring—the company’s headcount includes 18 employees, with plans to reach over 50 by the end of the year.
Gold noted that “cash flow positive dynamics emerged very quickly” with SecondShop. However, the startup is not yet profitable as it is currently still looking to invest in growth. George explained that if the startup chose to pause on those growth investments, “we could be a profitable business today.”
“It’s the fastest growing business in the history of Harvest,” Gold said, adding it is “growing faster than Neo Financial or any of the other companies in our portfolio.”
While George and Gold believe SecondShop holds a first-mover advantage, they also acknowledge that reverse logistics isn’t new. Companies like Toronto-based ReturnBear are also tapping into the re-commerce space. However, George pointed out the key difference between companies like ReturnBear and SecondShop is the underlying logistics network.
ReturnBear focuses on small-parcel, conveyable products like cosmetics, apparel, and footwear. “It’s really turnkey, and there’s not a lot of barriers as far as space and transportation are concerned,” George shared.
“In the big and bulky and the non-conveyable [market], you can’t just plug into a preexisting network to warehouse and circulate those goods,” he added. “You have to build it yourself.”
George believes his experience in creating cost-effective logistics solutions is what sets SecondShop apart as it looks to mainstream the secondhand market. He and Gold see a larger opportunity for the platform—not only could it relieve the price pressures on consumers in a period marked by high inflation and shrinking purchasing power, but it also helps keep millions of returned goods each year from ending up as waste.
“From our standpoint, everything needs to find a home that doesn’t include a landfill,” George said.
Feature image courtesy SecondShop.