The Green Mission Inc. has spent the past five years deeply involved in examining and reporting on the valuation metrics of the secondary market for building materials. As industry leaders in deconstruction valuations and sustainability practices, we have seen firsthand the significant untapped potential within this market. Through our work, we have identified strategies to maximize the value of salvaged materials while promoting sustainability. This article delves into how transforming the secondary market can create a more efficient, value-driven supply chain that benefits consumers, businesses, and the environment, unlocking new opportunities for growth and innovation.
Value of Items in the Secondary Market
There is an insanely large difference between the value of items on the primary versus the secondary market. For instance, high-end appliances at most retain 40-60% of their original value compared to new, while basic appliances hold only 20-35% of their value. An appliance simply in the “open box” condition can lose 35% of its value new.
The table below provides metrics for typical deconstruction property types, including appliances, building materials, millwork, lighting, and furniture. It compares average primary market prices across low, mid, and high ranges with median values observed in the secondary market, concluding with the percentage of secondary market costs relative to the primary market.
Below are just a few examples.
Miele Dishwasher:
New $2,149
Used offers from Mercari for $300 and $850.
eBay for $259.99:
Rebuilding Exchange in Chicago for $500:
Another prime example is cabinetry. High-end manufacturer Poggenpohl cabinetry can cost anywhere from $100,000 to $250,000 for a full kitchen setup. On the secondary market, through retailers such as Aurora Circularity, consumers can purchase showroom sets that include brand-new, high-end appliances at a fraction of the cost with offers below for $85,000 and $60,000.
Or not looking to spend a mint on cabinetry? The offers below of cabinetry from Community Forklift range from $393.75 to $2,950.
Similarly, a new Kohler Memoirs Whirlpool Tub, originally priced at $10,101, can be acquired in the secondary market from sources like Revolvs for as low as $600.
Kohler Memoirs drop-in tub in new condition:
Kohler Whirlpool tub in used condition from Revolvs $600.
Door sales
Door sales are abundant on the secondary market from reuse retailers like Second Chance in Baltimore, Construction Junction in Pittsburgh, Habitat for Humanity ReStores, Community Forklift in Washington, DC, RePurpose Savannah, Rebuilding Exchange in Chicago, Building Value in Cincinnati, BARC in Traverse City, Michigan, Princeton Reuse in Princeton, NJ, Sustainable Warehouse in South Carolina, Revolvs in Waupaca, WI, Better Futures Minnesota, and other retailers working on improvements to the functionality of the secondary market.
New door with side lights:
Used door from Columbus Architectural Salvage for $750.
Or an antique leaded glass solid oak door from Construction Junction for $2,250.99:
Economic Motivation and Challenges
While the economic incentive to shift towards the secondary market is clear—allowing consumers to purchase items for as low as 10-25% of their original cost, there are significant challenges. These include issues with predictability of branding, volume availability, and convenience, all of which deter consumers from regularly utilizing the secondary market. For example, a builder is unlikely to visit multiple reuse retailers, often located more than 100 miles apart, to source materials when a one-click solution is available through platforms like Build.com. This is especially true for materials such as structural lumber, doors, windows, and roofing.
Tax Deductions as a Key Driver
Tax deductions remain a major driver of donations to the secondary market. However, the complexity of the process, involving Schedule A of tax filings and a detailed appraisal and valuation process, can be a hurdle. To be eligible for a tax deduction, donations must be made to nonprofit or governmental organizations. In some cases, this results in nonprofits holding large quantities of materials, such as $200,000 worth of building materials, that may not be needed in their local area.
For-profit organizations could play a significant role in developing better product lines and inventory management, working with nonprofits to act as the tax deduction umbrella. This would allow them to sell these items at deeply discounted prices to organizations more capable of moving the inventory, ultimately benefiting the final seller and ensuring a more efficient flow of goods.
Improving Supply Chain Efficiency
To increase the appeal and functionality of the secondary market, it is essential to improve supply chain efficiency. Increased cooperation between for-profit and nonprofit retailers is key, allowing them to develop established distribution networks and share products. This would also enable better use of just-in-time inventory systems and maximize the volume and quality of available goods, ultimately increasing profitability for all parties involved.
As supply chain efficiency improves, the demand for secondary market items will increase. From a financial perspective, consumers will be more inclined to choose a $600 tub over a $10,000 tub when it meets their needs. This increase in demand will also raise the value of secondary market items and that tub may eventually creep closer to $1,000 in value once the consistent supply is able to create the demand shift from primary to secondary.
Role of Valuators in a Functional Secondary Market
As the secondary market becomes more functional, the role of valuators will become increasingly important. Consistent and reliable valuations of donated goods will allow for more substantial donations and larger tax deductions. Additionally, as tax rates increase on January 1, 2026, when the Tax Cuts and Jobs Act (TCJA)expires, more taxpayers will be motivated to itemize deductions, due to the halving of the Standard Deduction, providing a renewed incentive for donations.
Conclusion
To ensure the success of the secondary market, it is essential to make it the go-to source for consumers and businesses alike. If salvaged materials remain in nonprofit warehouses without end-users, they are merely taking a longer path to the landfill. The Green Mission Inc. is committed to tracking and analyzing trends in the secondary market, collaborating with industry professionals to close the gap between the primary and secondary markets. As we move forward, improving the secondary market’s functionality will play a crucial role in fostering sustainability and economic efficiency in building material reuse.
