By Charles Corbett
The ReUse People[1] is a non-profit organization dedicated to keeping building materials out of landfill. It does so (among others) by deconstructing buildings step-by-step, rather than demolishing them, and selling the salvaged materials through their warehouses. Ted Reiff, the President of The ReUse People, once commented to me that there is no contractor in the world who likes to throw stuff away, and that for any item that might appear to be waste on one construction site, there is always someone somewhere else who can use it. The challenge is to effectively match the demand with the supply.
That same principle underlies the emergence of waste exchanges for other kinds of waste. “Reuse” is the middle option in the “reduce, reuse, recycle” hierarchy, but, just as in construction, one person’s waste can be someone else’s resource. The challenge, again, is matching the existing (but often latent) demand with the available supply. The emergence of online waste exchanges creates intriguing opportunities to study what factors contribute to the likelihood of being able to match a “buyer” and “seller” (with quotes, as often these excess materials are available for free to anybody who is willing to pick them up).
The concept of an online waste exchange is simple enough: encourage people with materials they no longer have a use for to post them on the exchange rather than send them straight to landfill or recycling, and hope that someone will see the listing and take the materials off their hands, for free or for a price. The practice is not quite so simple: sellers may not be aware of the opportunity or not think it’s worthwhile to put together the listing, while buyers may be unsure about who they’re dealing with or what they’re getting. What makes an exchange more likely to happen?
An interesting paper by Suvrat Dhanorkar, Karen Donohue and Kevin Linderman[2] examines that question, by looking at transactions through the Minnesota exchange, MNExchange.Org, which has been in operation since 1999 and today has thousands of registered users (buyers and sellers). Quoting the authors’ description of the exchange: “At any given time, the online exchange may host hundreds of listings by different waste categories. [...] When a user submits a listing, the exchange displays item-specific information such as the quoted price, product description, frequency (whether one-time or recurring) and location (by county and zip code). For example, a construction company (seller) might list its surplus stormwater concrete pipes [...] on MNExchange.Org with accompanying product and transaction information. This information allows potential buyers to browse the listings and sort on specific criteria. Interested registered buyer(s) can then contact the seller directly (through seller-provided contact details) to get more information about the product, price, logistics etc. before negotiating an exchange. The terms of exchange are mutually decided offline by the transacting parties.”
Even though the exchange itself is online, buyers and sellers who are further apart geographically are less likely to conduct a transaction. This is a useful reminder that even seemingly online marketplaces are still tied to an underlying geography. The ReUse People finds the same thing (although not online): there’s a demand for everything they salvage from a building, the challenge is getting it from where it’s salvaged to where it’s wanted.
Dhanorkar and colleagues also find that past familiarity does help: buyers and sellers who are more familiar with each other are more likely to conduct an exchange. This is another useful reminder that online markets, though they may help connect far more buyers and sellers than before, are not entirely impersonal match-makers but still contain a human element.
In short, online marketplaces have real promise when it comes to finding a new welcoming home for one person’s waste, but we should not fall into the trap of forgetting that while the marketplace may be online, the underlying transaction is still every bit as physical as ever.
[1] Disclosure: I am a member of the Advisory Board of The ReUse People.
[2] “Repurposing Materials & Waste through Online Exchanges: Overcoming the Last Hurdle”, forthcoming in Production and Operations Management.
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