Today Colin is joined by Peter Whitcomb of Tersus Solutions, one of the players working to enable a thriving secondhand marketplace in the outdoor industry.
Tersus Solutions acts as a backbone for brands striving to establish sustainable practices by managing their re-commerce efforts. Throughout their conversation, Colin and Peter examine the complexities and challenges inherent in fostering a circular economy for outdoor apparel, as well as the necessity for brands to embrace responsibility for their products beyond the point of sale.
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Episode Transcript
Colin True
00:00:00.240 - 00:03:17.158
All right, everyone, before we get started today, I need to tell you about our amazing teammates at Darby Communications.
If you run an outdoor, an endurance or an active lifestyle brand, there is no better PR or digital marketing belay partner or drinking buddy than Darby. They can help your business reach new heights. And you know, they might just keep you from falling on your ass.
I mean, since we started working with Darby, more and more people have been reaching out to us here at the Rock Flight because of that messaging. Look guys, if they can help us, they can help anybody. Hit them up@darbycommunications.com do it today.
Welcome to the Rock Fight where we speak our truth, slay sacred cows, and sometimes agree to disagree. This is an outdoor podcast that aims for the head.
I'm Colin True and today we're talking with someone who is making the outdoor Second Hand marketplace possible. But before we get to that, it's been an action packed week here on the Rock Fight. Monday we ranked the top five outdoor gear brands going in 2025.
And on Wednesday, Justin Hausman and I talked about conservation versus Recreation before diving into the latest layoffs to hit outside.
And hey, if you subscribe to News from the Front, Rock Fight's official newsletter, head over to Rock Fight Co and click Join the mailing list to sign up.
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And lastly, have you checked out Doug Schnitzman's Open Container, the latest podcast on the Rock Fight Podcast Network? You can find Open Container wherever you're listening to the Rock Fight. So find Open Container, follow Open Container, give it five stars as well.
And all right, let's start the show. Last fall, news was coming out fast and furious from brands who are launching their own recommerce platforms.
And recommerce is second hand goods sold by brands who made the stuff originally and are selling it exclusively through their own second hand online store. I was pretty critical of many of these brands because it felt kind of box checky, a little green washy.
But after having folks like Baruch Benzekri from Out and Back on the show, as well as Aaron Provine from Gear Trade, he came on as well, both of whom are prominent online secondhand retailers, I learned a couple of things. Number one, the secondhand revolution isn't coming. It's already here.
And number Two, the there are still a lot of folks out there trying a lot of different things to create a more circular world when it comes to the outdoor stuff that we like to buy. Now, one other person reached out to me and that was Peter Wickham of Tersys Solutions. Tersys has a really interesting backstory.
They operate kind of behind the scenes. They use a new technology to clean outdoor gear and apparel, but they also help brands manage their own recommerce.
And when the book is written on how we finally solved our stuff problem, it's going to be folks like Peter and companies like Tersa Solutions who are the reason we finally figured our shit out. And Peter is here today to talk about not just Tera Solutions, but also to weigh in on how we do finally get to that more circular world.
So welcome back to the rock Fight where today it's a peek behind the sustainability curtain with Peter Wickham of Tersa Solutions. All right, well, we're here today with Peter Wickham from Tersa Solutions. Kind of one of the, I hope I'm describing this correctly.
I'm going to call it one of the kind of behind the scenes players working to create a more circular world when it comes to apparel. Welcome to the show, Peter. Great to have you here.
Peter Whitcomb
00:03:17.314 - 00:03:28.846
Thanks, Colin. Excited, excited to be here and yeah, I think that's a fair description. We actually call ourselves the backbone of recommerce.
So behind the scenes is fitting as well.
Colin True
00:03:28.998 - 00:03:40.718
I actually went a little doing a little digging in preparation for this and I did find you guys do have a YouTube channel and there were three YouTube videos on it. They're all about 10 years old at this point, but it was pretty public unveiling when you guys launched about 10 years ago, I guess.
Peter Whitcomb
00:03:40.774 - 00:04:01.966
Yeah, you clearly went deep. I actually didn't even know those videos were still up on YouTube.
I know, I know there are a few floating out there that sort of unpack the technology and I'm sure we'll get into the history and what we do. But you're the first person to reference those YouTube videos since I've been in this role in three and a half years.
Colin True
00:04:02.118 - 00:04:04.782
Well, we're well researched here on the rock fight, I guess.
Peter Whitcomb
00:04:04.846 - 00:04:05.182
Love it.
Colin True
00:04:05.206 - 00:04:18.670
Yeah, it was old enough that because you did, some of the partnership stemmed from some work, I guess with Patagonia and they were still referencing their old tagline of build the best product cause on no unnecessary harm. I'm like, ah, that was such a better tagline. I really liked that one.
Peter Whitcomb
00:04:18.710 - 00:04:22.906
Good, good one. They're, they, they. Who knows, maybe they get back to that anyway.
Colin True
00:04:22.938 - 00:04:53.276
But you reached out to me actually last fall when we started covering the flurry of branded recommerce sites that were announced here on the Rock Fight. And then that conversation led to, you know, Aaron from Geartrade coming back on the show and Baruch from Out and Back joining the show.
And both of them are two prominent online secondhand retailers who you reference, you have worked with in some capacity, you are continuing to work with today. I guess, just broadly speaking. I mean, like I said, you guys are a little behind the scenes. You're the backbone.
So what is the role of a company like Tersis? Like ultimately, what do you guys do? What does Tersys do? Let's just start.
Peter Whitcomb
00:04:53.348 - 00:07:20.020
Yeah, yeah. I mean, so.
And I'll unpack kind of the full history, but in some, we're operators and we handle used product and clean and repair it to make it resellable, ideally. And so our fundamental purpose is to get more use out of stuff that already exists.
And we operate out of three warehouses and then around Denver, Colorado. And we've developed a waterless cleaning technology that uses liquid CO2 to clean textiles.
And it's really the most effective way and most environmentally friendly way to clean, period. And the genesis of the business, just to touch on it.
So our founder, Steve Madsen was running a dry cleaner here in the Front Range of Colorado called Revolution Cleaners. And he was a very early adopter of the CO2 cleaning technology that actually had spawned out of military application.
So they were using it to clean hard to clean stuff like bomb parts, body armor, funky stuff that's just, you know, you can't throw in a washing machine. So Steve actually purchased an early CO2 machine thinking, you know, hey, this is like the new way to kill dry cleaning. Basically.
I think that was sort of his aim was like, let's kill dry cleaning. It's environmentally damaging.
A lot of dry cleaners end up as Superfund sites because they use PERC and other harmful chemicals in the cleaning process. And the machine actually didn't work well.
So he rebuilt it and through that process, patented the technology, ended up selling the dry cleaner, kept the technology, and fast forward to today. We use that to deploy across three different industries.
One is enabling brands such as the North Face, arc'teryx, Cotopaxi to power their resale businesses. The second is we have a down recycling business. We were just talking about that. I'm wearing a Crescent. Down works best.
They buy post consumer CO2 clean down that we've extracted from other brands products. And then lastly we have a firefighter gear and PPE decontamination business.
And you know, I've really unlocked sort of how firefighters care for their gear in that business with our technology.
Colin True
00:07:20.320 - 00:07:36.020
Why isn't the technology supplanted dry cleaning like en masse?
Is it just like, is it just, is it because it's proprietary and you guys aren't selling it off or is it more of a, oh, it's a little more costly to run. So it's a scale issue more than it is like an individual dry cleaner really couldn't handle this.
Peter Whitcomb
00:07:36.720 - 00:10:05.800
Very good question.
So the, the first decade of the business, it was founded in 2009, was really aimed at that, this notion of, hey, let's kill dry cleaning, let's sell the equipment into industrial laundry, commercial laundry. They had middling success. Patagonia actually had a machine, a handful of different sort of industrial cleaners across the world bought the equipment.
But you know, this is 2009, 2010, the dry cleaning industry is incredibly, especially at that time, antiquated. So they're going to, they buy, you know, they call them extractors, washing machines and they beat them up, use the heck out of them for 20 years.
And, and so there's, there's sort of a cost perspective and then the environmental thing quite frankly, didn't matter.
And so even though we're saying, hey, you're going to save water, you know, every cycle you run in this machine, you're saving 3, 400 gallons of water. It's the most energy efficient way to clean anything.
You're using about a tenth of the kilowatt hour, you know, in terms of energy output relative to high efficiency washers and dryers. And are you recapturing microfibers which otherwise get spit into the wastewater stream?
So all those things seemed obvious, but they just didn't have a huge amount of adoption.
And I think some of the things you said, they're pretty big, they're like 10 by 10 foot cubed, they're pretty expensive, they're not terribly hard to run. But you do need sort of off storage of CO2, so you're talking pressure vessels and all that stuff.
So coming out of that, we basically pivoted the business in 2018 as Patagonia was launching Warnware.
I was at REI at the time leading their resale and circularity efforts and both businesses were looking for an industrial scale cleaner who didn't use water because we had tons and tons of used stuff and you know, we came across Tersys and sort of that propelled the business into this business to business model. We're like, hey, let's make the equipment for ourselves, service different industries, help these brands, you know, stand up. Resale businesses.
Um, and you know, fast forward to today. I think we're from a branded resale perspective and I don't think we are, we are the leader sort of operationally.
Colin True
00:10:05.960 - 00:11:26.128
So if you track kind of sustainability efforts, just broadly speaking in the outdoor space, like particularly when it comes to apparel, right.
You start getting in the 1993, like, you know, you get recycled polyester for the first time and you know, like that's where that kind of launches and taking plastic bottles and putting them back into garments and you know, then recycled fibers becomes kind of like the, the story for a long time. This, the, the idea around circularity, which is not a new concept.
I think the, the circular economy is something that was coined maybe even in the 1960s or 70s. That's, it's, it's been a while.
So people have been thinking about how to kind of keep things in circulation, but that becomes sort of more the focus. So sustainability becomes one of like those words that people don't really like, but we don't have a better option so we use it anyway. Right.
And then so now we're at a point where again these recommerce efforts by brands are, you know, are coming up and on, on the, on face value makes a lot of sense. Like hey listen, we make a lot of stuff. Our stuff is really durable. How do we keep it in circulation longer?
How do we keep things out of a landfill, understanding that we're going to continue to manufacturing, manufacture things largely the same way. So where does a terse is enter into sort of the sustainability or circularity like ecosystem? Like you mentioned your work. It's more of a B2B play.
So how does that, you know, from where you were 10 years ago to where you are today? Like how do you, what are your efforts to support on the, on the, the outdoor apparel side of things?
Peter Whitcomb
00:11:26.264 - 00:11:33.216
Yeah, and I, I agree. I mean we can unpack sort of the claims around circularity and sustainability here in a bit.
Colin True
00:11:33.288 - 00:11:34.464
I mean that's a whole other episode.
Peter Whitcomb
00:11:34.512 - 00:15:34.220
That's a whole nother. Yeah, yeah, but, but, but yeah. I mean it's sort of like is circularity truly possible? I mean, we'll, we'll talk through that.
I mean, so, I mean, sure, as, as I define it, I think of sort of three stops on a. On and let's just use like, like this vest's journey, right?
So you have upstream the point of manufacturing and is the manufacturer, the brand, the retailer thinking about, call it the tenets of circularity when they make that thing. So Back to the 90s, recyclable materials, is it durable? And that's just a key tenant. How long can this thing last?
And does it have multiple lifetimes in it? And then when it's done, what do you do with it? And are you building in sort of is it repairable, is it recyclable, is it resellable?
And I think a lot of that's reflected in of course, the price point and also the desirability of the product. And so I think there's the brands doing, I'd say better and better work there. But if you look at entire catalogs, nobody's checking all those boxes.
No one's like, boom, boom, boom. Like, yeah, we've thought through all of this.
We take full ownership of this item and know exactly what's going to happen to it after we sell it, where we come in.
And this is a second stage, is sort of a post consumer phase where, hey, when you're done with this vest from Crescent Downworks or from North Face or Patagonia, what kind of choices do you have? And is the brand enabling that or is our marketplace enabling that?
And Tersa sits in, hey, we're going to help brands do this in a profitable and really seamless way and be the most efficient sort of one stop shop for used products.
So if you're in North Face and you're like, hey, you're done with that, you know, whatever Nuptse jacket, you can bring it into our store, you can mail it in and we've got a partner in Tersys who can inspect it, they'll repair it, they'll sanitize and clean it and we're going to resell it and we're going to recapture the value in that item.
And so we're kind of sitting in this again, the backbone space of if you're making durable product and it's resellable and you're a brand and you want to build a resale channel, we are your partner and we have a suite of services who can do that. The third stop is this call end of life stream and we dip our toe into that because we have a recycling business specifically for down.
That's maybe one area where you could say, hey, Tersys is sort of solving circularity where we can take a post consumer down item we can extract the down, not the face material. We don't quite know what to do with that yet. And put the down back in another garment. That's really cool. That's high value material.
As you look at the broader landscape though, it is super fragmented. There's mechanical recyclers, there's chemical recyclers, there's emerging companies like Reju and Cirque on the chemical side.
Lots of money going into that space. And then there's just outright liquidators. Waste energy. That's a nice name for incineration. And a lot of brands still use that method.
And the reality is on this sort of end of lifestyle, a lot of brands also just skip the middle step and they're like, hey, we've overproduced. We have too much stuff. Send it to mechanical recycling or waste energy.
And this stuff's new with tags on like in the poly bag off the manufacturing floor. I mean, you know, I'm not. Don't want to share sort of specifics but you know, we see that to some degree as well. And you just go, holy cow.
Like, you know, and I have to tow a line here.
But, but you know, there's some brands who are kind of working towards all three of those steps and there's some who sort of talk about them and are not actually working to.
Colin True
00:15:34.660 - 00:16:12.550
I mean, the disease of more is real. Right? And that's.
I have a note for another topic about like, I don't know how we really get to anywhere at a larger scale until things are legislated and people are told you just can't do that anymore. But then also like these stories are particularly demoralizing when you think about the growth of a. And not to take a shot.
But I have in the past of like a Sierra where it's like, you know, they're growing exponentially because they have so much stuff they can sell. And I know they're making their own and things as well. But the bottom line is there's still a closeout business for the most part.
And then to think like you, did you even try or you couldn't even sell it to Sierra, so now you're just going to sell it and have it torn apart while it still is brand new with tags on. Like that's, that's. That's rough to hear.
Peter Whitcomb
00:16:12.850 - 00:18:07.240
It's. It's. So I think, I mean there's, there's a lot of fragmentation.
There's a lot of opportunity for, you know, somebody to roll a lot of these players up into this whole Whole sort of supply chain, call it, and think about, hey, the ownership and provenance and responsibility of a product. We're a long ways off from that. And I agree with you.
I mean I'm not, I think as it relates to kind of the consumer space, I'm not a huge sort of legislation, first period person, but I am in this case. I agree.
I think you're fighting human behavior, incentive systems that, you know, basically reward, make more stuff based on last year's demand, change the color and sell it once and never see it again and comp, you know, better numbers. And I think that is inherently unsustainable. The resource extraction and a big scale is inherently challenging. And so this idea of hey, you brand.
And we've talked to like credit to some brands, North Face arc'teryx, who genuinely are having these conversations and saying, hey, we make X amount of stuff a year. Let's say we're selling billions of units of products. We've sold a billion units over the last 10 years. They're in consumers closets today.
Half of them, whatever the number is, are not even used. They're just collecting dust. That's a supply chain that exists for us today.
How do we actually bring that back into the brand and not produce more and get more out of what's already made? And that, that's, you know, back to your question. That's what Tersis is trying to enable.
You know, not on that grand of a scale yet, but we're working down that path.
Colin True
00:18:07.980 - 00:18:42.156
Yeah, I'm right there with you. Like my, my gut instinct in most things isn't immediate legislation. I just feel like this is.
But I'm also, you know, realistic about how people consume things. I mean, this is, this is 99 of this and I am including the vast majority of the technical outdoor enthusiasts out there. These are passion purchases.
These are, these are, I want this purchase, not I need this purchases. Yeah. And to say that, you know, you want to let consumer demand fix things, it's like, no, they're not. It's not going to happen.
I mean, I do it, I do it. I'm more educated than most people. Other stuff. And I see something like, I'm totally.
Peter Whitcomb
00:18:42.188 - 00:18:43.772
Going to buy that later. Yeah.
Colin True
00:18:43.836 - 00:19:35.070
But then, but then you also see when you have successes and this is where, you know, creating the secondhand market marketplace and kind of elevating secondhand as to be more, I think, present in front of consumers, that's where you, you can win over the consumers. I've talked about on the show before about Being in a shop and I want to ask you how small can Teresas go? Right.
Because there's a independent specialty shop I saw in Montana earlier this past fall and they've developed a really meaningful part of their business. And this, the secondhand market, it's not just like a nice to have. We have some like used stuff that we sell too.
I was like, no, it's like 20% of their business now. And I think there you go. There's where like commerce and you know, and capitalism can actually help solve some problems as well.
And when you think of like an independent specialty, is that a market that could be served by Tersys or is it just simply like too small of a. Just you need that doesn't really work with how things actually work, how these things get cleaned and the processing that you guys do.
Peter Whitcomb
00:19:35.690 - 00:19:51.040
Not at all. I mean in fact.
And although you know, we're largely B2B with brands, we have worked with, you know, local independent retailers and secondhand stores to clean and repair for them.
Colin True
00:19:51.420 - 00:19:52.164
Awesome.
Peter Whitcomb
00:19:52.292 - 00:20:22.942
You know, and I think we actually like in many cases smaller mid sized players because there's a lot of autonomy, there's sort of more agile decision making. They're very collaborative and you know, I mean we, we and we work with you know, everything from betting companies to brands.
I think if you were to ask my team, they'd say we like, like the small brands because we, we know the owners, we know the decision makers. Yeah, yeah.
Colin True
00:20:23.006 - 00:20:25.646
And they're usually founder led and they're passionate, right?
Peter Whitcomb
00:20:25.718 - 00:21:30.390
Totally, totally. And then you move a notch up to like the Steos and the Filsons and they're also incredible to work with.
And I think, you know, they have their own challenges. You know, they're always balancing the sort of viability and fiscal like so call it sustainability on that side with trying to do this thing.
It's, it is important. But I think your question's spot on. I mean we think, you know, and we've been really intentional about this.
We don't want to be just an enterprise service provider. We've always said, hey, if you come solutions is a very intentional part of our name. Like we're going to work with you.
We still have people call who are like, hey, I've got like this 1970s down, you know, we just repaired a 30 year old sleeping bag for somebody who, you know, and I don't want to get into the B2C business at scale. But if they call, you know, if you're like calling, you're like, hey, I've got. Will you guys CO2 this? Absolutely.
Like, you know, we want to, we want to kind of keep this stuff in use. Again, that's sort of a fundamental purpose for us.
Colin True
00:21:30.510 - 00:22:03.186
So when you look at then kind of the two main players I mentioned earlier in the show, like the out and backs and the gear trades, which are I think probably you know, the two most prominent, you know, secondhand outdoor secondhand retailers that are really making some noise about, you know, driving more awareness and business to secondhand. How do you interact with guys like that?
Is that a, is that something where like they so much stuff comes in in such quantities that you're just helping the process? Is there something you mentioned, you know, your solutions is in your title of the title of the company.
So are there ways, other ways that you are participating sort of in the secondhand as it pertains to the outdoor apparel market?
Peter Whitcomb
00:22:03.338 - 00:25:59.370
Yeah, so they, their, their models are on one hand sort of fundamentally at odds with what we're trying to do with brands, which is, you know, if you were to take a very strict view of our services, we're enabling brands to own their resale channel. And the thesis being, hey brand, you made that product, you have a right to resell it.
You should go recapture the value in that item that already exists, retain that customer, acquire that new customer and build an experience that's in line with your brand and is additive and authentic. I kind of equate back to your Sierra comment and assuming everything's used, this is kind of an authentic off price channel.
Like this thing's actually been used, it's been refurbished and you get it for 50% off.
And by the way, instead of, it's hard to say it's a one for one offset to a new item, but the math is roughly call it 50 to 80% offset of manufacturing a new item in terms of the life cycle assessment. So all those things are like, hey, this is brand, why you should do this. This is credibility, trust building.
The marketplace is so out and back and gear trade are basically saying, hey, we're building a marketplace effect where we want as much supply as we possibly can get from consumers. Brands doesn't really matter. And as a result we can kind of drive more eyeballs to our marketplace.
I think many brands are sort of cautious around what that means for their brand and they can't really control the pricing or the experience. But it's powerful.
And you've talked to these guys and they have real traction, they have significant audience, they're building credibility in the space, I think it's an amazing on ramp for customers who don't want to buy the new DPS skis for 1200 bucks. And there's a real sort of authentic value proposition. So that's just to sort of lay the landscape as we work.
You know, in the past we've actually done cleaning and repair work for out and back. You know, they have opted to bring some of that in house as they scaled, and rightfully so given their cost structure.
And then on the other side, gear trade, you know, roughly in aggregate, and this is sort of a misunderstanding of branded resale. We sell through about 80 to 85% of all the products that we process for our brands. That's on average.
And so let's say we get a thousand items, we'll sell through 80, 800 to 850 in a year. So we don't have a lot left over after sort of full selling cycle.
But that stuff, instead of saying, hey, let's liquidate it or donate it or recycle it, let's, let's get in on a marketplace. And that's where sort of collaboration with Aaron at Geartrade, you know, has been really valuable.
And for brands like Steo, where steel wants to own and sell the best of the best, they say, hey, take the 15, 20% and let's just put it right on gear trade. We're going to get more eyeballs.
And it's so that that type of collaboration, I think is going to emerge and grow here, where they're solving a problem on sort of scale and traffic and matching the right consumer with that item. While we're kind of saying, hey brand, we're creating a really great experience via software.
Other software integrations with companies like Trove and Archive. So there's like a frenemy element here, I guess, going on.
Colin True
00:25:59.910 - 00:27:05.444
I mean, I think that makes the most sense. I do question, and I have questioned some of the recommerce efforts that have been put out there because it feels very box checky at times.
It also, when you look even the ones who have partnered, a handful of them that partner with folks like, you know, like a gear trade or maybe even with yourself, you know, like you, it doesn't get promoted on the front of their website. It's clearly a secondary effort at best. And I understand the inclination towards, I want to control everything that has to do with my brand.
But if you're not promoting it and you don't want, you really are much more invested in creating first quality product and it's a secondary site altogether. Why not just outsource that and know that it's getting done well, better than you probably ever could have.
You're probably going to get some money from it. Maybe not as much as you thought, but now it's being handled and it's something more you can point to and say, hey, look what we're doing.
We're doing this partnership with these people who really know what they're doing versus let's just try and hold on to it and make it our thing. And then now, okay, now we got to hire like six people to process stuff and they probably end up working with someone like yourself anyway. Anyway.
It just seems like so much more simpler that way.
Peter Whitcomb
00:27:05.612 - 00:28:44.194
Yeah. And that is, I think a serious frustration is.
And there, and there's, I'd say there's sort of those who are doing it well camp and those who are trying to figure it out.
You know, you look in an arc'teryx front, you know, homepage like rebird is universal nav and they have a VP of E Commerce and we do all their logistics and cleaning and repairs in the US and they're supply constrained. So where Aaron's like, hey, I want your supply. I'm actually like, I sell through or we do with Arc'teryx, 98% of ArcTeric supply in a month.
So If I get 10,000 units, those things are flying off the shelf. And they're unique. They're maybe a handful of brands like that and they promote it.
If you follow regear, you're going to get retargeted on Instagram, you're going to get the weekly email. So that model is a far end of the spectrum. They're the others where you go, holy cow, yeah, you wanted to do this. Everybody was excited.
Three people have turned over and it's totally homeless and nobody's talking about it. And you've checked the box and you're not taking this seriously. And so, and I think that's also honestly a.
There's sort of a generational and back to this incentive systems of how, you know, the whole kind of retail ecosystem works. A lot of these leaders are still just incentivized to sell more stuff.
Colin True
00:28:44.322 - 00:28:44.786
Oh yeah.
Peter Whitcomb
00:28:44.818 - 00:29:53.218
And so the CEO is never going to be like, yeah, that thing like go, go, go, make that 10x bigger. You know, and when I, when I was at rei I was leading the resale business and you know that that's a real including their garage sale business. Right.
And you're probably familiar with that. They're in store. You know, so I oversaw that and then what they call now resupply. We're well on our way to nine figure business.
So it's not, you know, it's, it's certainly, you know, it's their $4 billion brand.
It's still sort of a drop in the bucket, but sure, you know, there are those examples where you're going, okay, this is actually becoming significant. And you know, from a brand perspective, it's an amazing customer acquisition tool. Back to this. Hey, on ramp outdoors is for all.
And we saw that, I mean, at Aria and we see that today. It was like, you know, one in five of our consumers through used gear was millennial or Gen Z. You know, I think it was. Or sorry, sorry.
One in five in our core membership as millennial and Gen Z. 50% of the used buyer was Millennial or Gen Z.
Colin True
00:29:53.274 - 00:29:53.826
Right.
Peter Whitcomb
00:29:53.978 - 00:30:09.170
More diverse, more females, more like. And so you're like, okay, this is, this is actually what we all say we want to do. It's happening here.
And so let's go talk to that future generation who actually cares about this stuff and impact and how they consume.
Colin True
00:30:09.250 - 00:30:43.196
Yeah, no, it's, it's amazing. It is. Is another extension of the.
We have a, you know, the, the two of us, you know, the old white guy, you know, problem, skinny white guy on top of the mountain problem.
It's an extension of that because now we're the skinny, outdoorsy white guys who are running the companies who are just our Gen X or older and don't recognize that. I mean, obvious things.
Like we had Andrew who founded lives in designs on the show a couple of months ago, and he's talking about how, you know, his head of product and head of sustainability are the same person. And I'm like, that's freaking genius. How come nobody that should be everywhere. Right?
Peter Whitcomb
00:30:43.268 - 00:30:43.516
Smart.
Colin True
00:30:43.548 - 00:31:19.420
Because I talked about, I've definitely been places where, you know, the here comes the sustainability person and the head of product is like hiding because they don't want to be told no. Right. There's just, you know, there's all these like, dynamics. It's like, no, make them the same position. You know, like that makes a ton of sense.
So I'm not saying that would work everywhere, but like, that just was something like nobody would have thought of 10 years ago. Right. Younger company being much more nimble. Like that makes a lot of sense to do. And I think that's exactly your point.
Is well founded of the younger generation has to. Is going to. Are going to be the Ones who come through to make this the norm and make and grow this category. Without a doubt.
Peter Whitcomb
00:31:19.580 - 00:31:34.440
Without a doubt. And it's, it's, I mean I will say. And we've made, you know, so we've launched a bunch of footwear brands in the last call year.
New Balance, Doc Martens Car, who's kind of emerged. They used to be a ski brand.
Colin True
00:31:34.820 - 00:31:35.532
Yeah.
Peter Whitcomb
00:31:35.676 - 00:32:40.482
And I initially, I honestly was like, can we do like, can we pull off footwear and see meaningful sell through? And they are absolutely crushing it. Like sell through rates above that 80% that I quoted. And you know, some of it I think is that tersis.
And they do a fairly good job of saying, hey, this is like a certified pre owned shoe. Like it's been sanitized, you can feel really good about it. But you know that like bowling rental shoes or something.
Yeah, yeah, yeah, yeah, yeah, yeah. You're like, ooh, get the spray out.
But so, so that's another where you go, okay, like the consumer's out there, you know, and it's, it's like, yeah, they, they are looking for this. It's never been a demand constrained business. It's actually more supply constrained. We're always sort of saying how do you drive more trade in?
How do you tap into your customers closets? And it is, it's disproportionately that younger customer and they're demanding it. They're like, this is how I want to shop. I'm on Poshmark.
I'm looking at all like I, I'm, I do peer to peer and I want to buy used from the brand.
Colin True
00:32:40.586 - 00:33:12.700
So kind of last thing on the, on the branded side of it, you know, they are, it is sort of like the move du jour right now. Like we need to have a recommerce piece of it. We got to have it, everybody else does.
And you know, with certain levels of success, it does feel like very box checky in some instances, like I mentioned. When you sort of look at it though, is, is it a good business decision?
Is it a, could it, can it be a profitable thing for someone either to manage on their own or should they only partner with someone like yourself?
Like, you know, as you look at it as a whole, the recommerce business as a whole, is that going to be a profitable arm of outdoor apparel brands in the future?
Peter Whitcomb
00:33:14.120 - 00:34:10.428
The short answer, which I think it gets sort of also misconception out there is a misconception is that it is profitable. I think one of the things we've done really well amongst a few is we are a profit center for every brand we work with.
And so we say if you have used stuff and it could be like the dark, nasty stuff that's been returned in your D.C. you don't know what to do with. And by the way, every brand has that. They're like, oh yeah, biohazard. Yeah. We have 40 pallets.
Side note, we actually on North Face, we're going through this exercise, they found two pallets of their early 90s Summit Series product. It was like the, like bright neon colors. Yeah. And so it's shipped to us and we were like, this is a gold mine of stuff. Oh yeah, neon.
Colin True
00:34:10.524 - 00:34:12.188
She's got the ebay account, you know.
Peter Whitcomb
00:34:12.244 - 00:34:17.356
Yeah. And so they actually. It was so such a rare find. It's in there. It's in there.
Colin True
00:34:17.428 - 00:34:21.132
Did they know they sent it to you? Don't they have a historian that's like pissed off right now?
Peter Whitcomb
00:34:21.156 - 00:36:26.518
No, no, it's like literally often that, you know, the ops guys like, oh, this is like far in the deep corner. Get that out. And so, so when we cracked it open, we're like, you guys have to come see this.
It's in there like their library of like historical pieces now, which is kind of amazing. That's an aside. But so whether it's, it's, you know, from, from a return stream or a trade in stream, those are the two primary sources of product.
You know, we ensure that hey. And we've put guardrails in place with, with our software providers like Archive who are saying, hey, optimize every touch of this item.
So for North Face publicly owned VF Corp, they came to us and were like, listen, this has to be margin accretive or in line with our mainline margin or it doesn't work because we have to report. And so three years in now we're at. And I can't share the exact number, but it's a healthy net margin business.
And you go down the list, every brand is saying, yep, like we're making money on this or we're recouping profit depending on how they account for it. And so I think that's a very, very important note is there is a model out there, it works.
And you as a brand, you know, this is sure it's not a billion dollar business but you know, our biggest brands are doing 8, 8, 9 figure resale businesses and at a healthy kind of 15, 20% net income and a lot some of the accounting because I'm sure it'll get scrutinized some of the returns are written off. And so reselling it is just sort of like a profit recapture mechanism. Whereas. And not to knock out and back, but they're buying inventory.
We don't own inventory.
And one of the mandates I've kind of pushed in the team is like, I don't want to be the bank, I don't want to be a Sierra trading post and kind of take that risk. I think the brand they've made the product should, should hold that balance sheet risk.
Colin True
00:36:26.654 - 00:36:29.510
Yeah. You guys could have solved this by ordering less from the factory, you know.
Peter Whitcomb
00:36:29.550 - 00:36:31.606
Yeah, exactly, exactly, exactly.
Colin True
00:36:31.718 - 00:36:34.422
Why, why do I have to carry your inventory for you?
Peter Whitcomb
00:36:34.526 - 00:36:40.038
Yeah, yeah. Well, it's like this goes back to the, like, let's think about what you're making and how much you're making.
Colin True
00:36:40.174 - 00:36:40.614
Right.
Peter Whitcomb
00:36:40.702 - 00:36:55.150
You know, and, and so, yeah, that all to say, we try to be a very efficient first and last touch on that item before it gets to the customer. Like, boom. We know the margin on this feel good. Let's rock and roll.
Colin True
00:36:55.490 - 00:38:32.316
I guess the amount that we're making is a good segue into the last thing I wanted to talk to you about because I think when it comes to these kinds of things, consumers, we all just want the silver bullet. Right? And the one example I always give is like organic foods of like, oh, there's a label on this apple. There's not one on this apple.
Who cares if 90% people are wrong and think that the organic one is healthier when it's not? Bottom line is it's better for the world if you buy the organic one. Sure, I'll pay the extra $0.30 to buy the organic one.
Boy, my conscience has put at ease because at Ralph's today, I got six organic apples. And I think people want that for apparel, right? They want to know that that's why the hang tags and everything, I feel like are mostly greenwashing.
It's like, hey, there's a recycled fiber in this. You're solving the problems of the world. It's like, no, they still polluted a river making it doesn't matter kind of thing. Right. So.
So I think when we, when we look back on this time, if we're able to kind of have a positive outcome to kind of our climate situation and making things, the making things situation we find ourselves in, I'm sure it'll be a mix of solutions that kind of lead to, you know, a better way that we make stuff. But that being said there, in addition to what you guys do, there are lots of other folks out there now who are trying different things.
And I wanted to kind of ask you specifically about, you know, you mentioned Riju earlier. Right. Which their goal seems to be to take existing polyester and to be able to, I believe, recycle it or upcycle.
I'm not sure what the phrasing they're using is, but to kind of make it back into yarn to make more recycled polyester things, kind of creating a closed loop stream of being able to take polyester and continue to make things out of it. What are your thoughts when you see things like that? Did I get that wrong? Sorry, I saw you.
Peter Whitcomb
00:38:32.388 - 00:38:34.892
No, no, no. Yeah, you got it. You nailed it. Yeah.
Colin True
00:38:34.956 - 00:38:51.560
Okay, so like what do you see that like a solution like that? Are you optimistic? Are you like, okay, well look, fingers crossed.
I mean, like, you know what, when I'm just curious your point of view on stuff like that and we to have Patrick Frisk on the show at some time in the future to talk about that specifically. But I'm curious of what you think of those efforts.
Peter Whitcomb
00:38:51.720 - 00:41:26.342
Yeah, I mean I have two frames of mind on it. On one, taking it at surface level, I'm kind of like that's a cold fusion esque problem, right.
That scale of textile to textile and you're going to have viable market and buyers for the finished product. I'm like just called go Go. Yeah, go sell cold fusion. Like it's like that big, right? I mean we're making more and more stuff.
We use less and less stuff. You know, you the, the maturity of the markets and the buyers to kind of like get there is a long ways off.
And there's, there's unfortunately a lot of. There's some history, you know, on. And this is in the chemical recycling space.
You know, the textile to textile, you know, of companies that haven't made it and they're certainly pioneers. On the other hand, I go, sure, it might be cold, but it needs to happen because we're simply making too much stuff. We use it less.
To your point earlier, we're not going to stop consuming. That's just like. We're like cave people. It's just wired into us. And like Amazon. I worked at Amazon before rei.
I left Amazon because it's like, holy cow, I'm just filling landfills. Basically. It was my job. And so I love that it seems like an incredibly talented team.
There's a ton of venture money going into the rejuice of the world. Siric is a polycotton chemical recycler. There's Evernu.
There's a litany of them and we haven't worked directly with Redu, we've worked with others in terms of trying to like I said, 15 ish percent of what we handle may go to a next best use path. They're all a long way away in my view and I don't know kind of like the roadmap or anything related from true sort of industrial scale.
And I think they're facing a couple of challenges.
One is they need a significant amount of seed feedstock that is somewhat homogenous and then on the other side they need a significant offtake agreement for the finished yarns and can they get a price that's comparable to the virgin material? And right now the answer is I think no. But more and more brands are stepping up to kind of dip a toe into that space.
Colin True
00:41:26.526 - 00:41:29.250
Maybe Sierra could donate a store or two like you can have.
Peter Whitcomb
00:41:29.870 - 00:42:30.160
Yeah, yeah, well I know, I mean and you're seeing, you know we just actually talked to Goodwill yesterday, their national office and you look at that network, how much stuff they get and a lot of his textiles. They want to be a provider and sorter into this.
I just visited waste management facility last week where they have this automated sorting technology that uses infrared, sort of near end infrared tech to detect what is in the makeup of that textile. So there's like oh this is 100% poly or this is 80% poly and then it sorts by that.
So as that technology emerges I think the reduce become more viable. But there's so much, I think you mentioned this, it's still so fragmented.
Like how do you piece all this together when the fundamental source is going to be your closet? Right, like in my closet, 360 million closets. And how do you kind of path all that stuff the right way?
Colin True
00:42:31.100 - 00:43:52.920
And it's more complicated than the outdoors.
We have an environmental journalist, a fashion journalist who joins us every once in a while on the show and she, you know, she and I talk a lot about because she covers mostly, you know, the Sheens and the Temu's of the world.
And sometimes I'll be, you know, complaining about something that I complain about on the show and she's like, you know, you guys really don't have it that bad in the outdoor space compared to a lot of these fashion brands who are truly like, like nefariously things up. You know, like they're really like it's just a profit centers and they do not care about anything else.
At least in the outdoors you have to present like, you care, even if maybe you don't, but most people generally do. And I think the. So I like, I think it's a great answer of like, you know, we have to keep pushing the boundaries on this stuff as well. Right. It's.
It's. A scale is always a problem. Right. I remember when I learned that at. At Timberland.
Excuse me, at Polar Tech, when we were, you know, we kind of learned that even on a pretty small scale you can own. There's not. There's incredible things you can make. I mean, there's a couple years there, we felt like spider silk was going to be the next thing.
And lots. I'm sure you. I'm sure you sat in that chair like spider silk, man. We gotta. But nobody could ever.
They could maybe make a little swatch of fabric, you know, and it's also like, where are you gonna get all the raw materials? And how are you gonna then again make it at a scale that it is profitable? It's like, great.
Yeah, it's 100 bucks for, you know, a tiny little piece of fabric. You know, like, that's not gonna work.
So I think it's going to be the same thing, but unless people are pushing forward and trying and trying and trying, we don't get anywhere.
Peter Whitcomb
00:43:53.580 - 00:44:10.820
I am most, you know, this is just my personal view. Definitely skeptical of. Yeah. Kind of these efforts right now. I think the next decade there will be winners. And I like your con.
I mean, listen, the outdoor and, And I love what you're doing. I love the podcast, I think.
Colin True
00:44:10.860 - 00:44:11.380
Oh, thanks, man.
Peter Whitcomb
00:44:11.420 - 00:45:10.860
The. The. The industry needs a little irreverence, a little self reflection. You're filling a massive gap there. But the industry does a lot of good things.
And you kind of take an aggregate. Our partner base and we work with luxury fashion, footwear, outdoor sports. Outdoor is far and away off the front here.
And, you know, there's a lot, A lot of. A lot of good things happening. And I think a lot of honesty, like, emerging, you know.
You know, I think of people like Annie at Cotopaxi lead sustainability, like, you know, super honest, like, you're not gonna have a better conversation than kind of her, what they're doing well and what they're not. And she's taking it to the board, so it's cool to see that. And yeah, I'm glad, you know, like, you're out here kind of telling these stories.
Colin True
00:45:11.360 - 00:45:25.432
Right on, man. Well, I appreciate you coming on. Let's definitely have you on again, especially we have some more of these stories.
I'M sure will come up with lots of other things to discuss. Maybe you can be our sort of our head detector on environmental efforts in the outdoor apparel space.
Peter Whitcomb
00:45:25.616 - 00:45:31.940
Yeah, I have plenty of stories to tell. Not publicly yet.
Colin True
00:45:33.260 - 00:45:35.620
All right, man. I appreciate it. Thanks so much for coming on.
Peter Whitcomb
00:45:35.740 - 00:45:36.920
Yeah, thanks, Colin.
Colin True
00:45:38.380 - 00:46:02.430
All right, that's the show for today. Send your feedback on this and every episode of the rock fight to myrockfightmail.com the Rock Fight is a production of Rock Fight LLC.
I'm Colin True. Thank you for listening. And here to take us out is one of the lead singers of Lustin Jake. It's Krista makes who composed the rock fight fight song.
And lucky for you, he's gonna play play the rock fight fight song right now. We'll see you next time, rock fighters.
Chris DeMakes
00:46:02.510 - 00:47:03.130
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