Key Drivers in the Market for Remanufactured Products: Empirical Evidence from eBay

Abstract

Measures, such as remanufacturing, to extend the economic lives of products are receiving increasing attention in theory and practice due to a variety of economic and regulatory factors. In this paper, we complement the predominantly analytical closed-loop supply chain (CLSC) research by empirically examining seller, buyer, and product-related factors pertinent to remanufacturing operations. We analyze a sample of over 700 purchases of remanufactured products spanning nine product categories on eBay to examine the drivers of differences between the prices of corresponding new and remanufactured products. Additionally, we investigate a sample of over 5000 transactions to understand the differences in buyer experience and post-purchase buyer satisfaction between remanufactured and new products. Our analysis reveals that seller reputation plays a very significant role in determining the differentials between reference prices of new products and purchase prices of remanufactured products. We also observe that price differentials vary considerably by product category, suggesting the potential significance of factors such as product technologies and sales volumes. Contrary to our hypothesis, we find that buyer experience is lower overall for remanufactured products in comparison to new products. However, we find that there exist certain product categories where buyer experience is indeed greater for remanufactured products as compared to new products. In addition, we observe significant variations in buyer experience across product categories for remanufactured products. Finally, in comparing buyers' post-purchase feedback for remanufactured and new products, we find that remanufactured products are significantly more likely to be associated with positive feedback than new products.