- Jessica I. Marschall, a CPA with 24 years of experience, has spent the last five years working as a deconstruction material appraiser and business management and supply chain consultant along with maintaining a tax consultancy focused on business revenue and operational modeling. Drawing on her extensive experience in finance, valuation, and supply chain systems, Jessica examines the persistent challenges facing the secondary market for reused building materials. This article explores the reasons why this market remains underdeveloped, despite significant investment, and offers a pathway to building a viable, competitive marketplace.
The Unfulfilled Promise of the Deconstruction Market
Two decades after the inception of the "deconstruction" movement, the secondary market for reused building materials remains underwhelming in both demand and value. Despite tens of millions of dollars awarded to individuals and organizations for regional assessments, feasibility studies, model programs, and attempts to create uniform sales practices, the fundamental issues persist:
- Low Relative Value: Used building materials hold significantly lower relative value compared to new materials.
- Lack of Demand: Demand for these materials has not been adequately cultivated.
- Sporadic Supply: Supplies of salvaged materials are inconsistent and fragmented.
Efforts to address these problems have largely focused on research and study, with little tangible progress in building a functional, self-sustaining market. The result is an industry that is still viewed by many as niche and unreliable, despite its environmental benefits.
The challenges outlined here are echoed in research by the Urban Sustainability Directors Network (USDN), which highlights logistical complexities, inconsistent supply, and concerns about the quality and structural integrity of salvaged materials. Additionally, a lack of standardized grading systems and material certifications further limits the market’s scalability (Urban Sustainability Directors Network).
Urban Sustainability Directors Network (USDN)Barriers to a Thriving Secondary Market
Numerous experts have pointed to the key obstacles impeding the growth of the secondary market for building materials:
- Inconsistent Supply Chains: The sporadic and siloed availability of salvaged materials makes it difficult for buyers to rely on them for large-scale projects or ongoing needs.
- Perceptions of Quality: Builders and contractors often perceive reused materials as lower-quality or less reliable than new materials, creating hesitation to incorporate them into projects.
- Logistical Challenges: Transporting and storing bulky, diverse salvaged materials can be expensive and complex.
- Lack of Standardization: Without uniform grading systems or certifications, it is difficult for buyers to evaluate the suitability of salvaged materials for specific applications.
- Market Awareness: Builders, contractors, and consumers are often unaware of the availability or benefits of reused materials, resulting in limited demand.
The pricing of salvaged materials is often too low to attract serious investment or sustain profitable operations, further discouraging market participation.
These barriers align with findings by Zocco et al. in their study on thermodynamical material networks, which underscores the importance of addressing inefficiencies and inconsistencies in material flows to achieve greater circularity (Zocco et al., 2024). Their work suggests that standardized metrics and better coordination within supply chains are critical to optimizing the reuse of building materials.
Enhancing building material circularity: A systematic review on prerequisites, obstacles and the critical role of data traceabilityMisallocated Investments
Over the past two decades, millions of dollars in grants and private funding have been poured into studying the potential for a secondary market. These investments have produced reports, pilot programs, and feasibility studies, but they have not translated into tangible market growth.
While these initiatives have brought some awareness to the concept of material reuse, they have not addressed the fundamental need to build demand and establish the market as a viable competitor to new materials. The focus on research has overshadowed the practical steps required to grow a sustainable industry.
A New Approach: Building the Market, Not Studying It
To create a viable secondary market for reused building materials, we must shift our focus from analysis to action. The market must be developed with the same strategies and vigor as its for-profit counterpart—new building materials.
While these initiatives have brought some awareness to the concept of material reuse, they have not addressed the fundamental need to build demand and establish the market as a viable competitor to new materials. The focus on research has overshadowed the practical steps required to grow a sustainable industry.
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1.Expansive Marketing and Advertising
Launch comprehensive campaigns to raise awareness about the benefits and availability of reused materials. Highlight their environmental and economic advantages to builders, contractors, and consumers. Advertising budgets for burgeoning markets often require aggressive budgets of 10-15% of gross revenue. If this market were to be aggregated to reach $250M, this would require an advertising spend of $37.5M.
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2.Corporate Buy-In
Collaborate with major retailers and distributors to integrate salvaged materials into their supply chains. Show these companies how they can achieve similar profit margins through increased sales volumes and economies of scale.
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3.Incentivizing Volume Sales
Promote the idea that profitability lies in volume. Demonstrating that salvaged materials can yield competitive gross margins when marketed effectively will attract more stakeholders to the industry.
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4.Building a Dual Market
Create a marketplace where materials can be both sold and donated. This dual-option system would provide material owners with flexibility while increasing overall market activity.
Long-Term Benefits
As demand grows, the value of salvaged materials will naturally increase. Higher prices for reused materials will benefit donors, as appraised IRS defined Fair Market Values for charitable contributions will rise. More importantly, the existence of a thriving market will ensure that materials are not wasted and can be easily sold or repurposed.
This approach does not rely on endless grant funding or theoretical studies. Instead, it focuses on actionable steps that align with market principles to create a self-sustaining industry. The success of such a market will not only reduce landfill waste but also create jobs, stimulate economic activity, and promote sustainable building practices.
Conclusion
The current secondary market for reused building materials is underdeveloped because it lacks the fundamental characteristics of a thriving industry. Millions in additional funding will not create demand for sporadically supplied materials often dismissed as "junk." Instead, we must focus on building demand through strategic marketing, corporate partnerships, and clear economic incentives.
By treating the market for reused materials as a competitive business rather than a charitable endeavor, we can unlock its full potential. A well-constructed market will make reused materials a practical and profitable choice, ensuring their widespread adoption and creating a sustainable future for the building industry.
The Green Mission Inc. has expanded our services, merging the tax and fractional CFO expertise of MAS LLC with secondary market participants to contribute toward moving the secondary market not only toward functionality but also profitability. We are working closely with secondary market participants, studying what works and what does not, and moving towards larger marketing and outreach. Most importantly, we aim to integrate suppliers across the United States and Canada by demonstrating profitability models that will benefit every link on the supply chain.
By aligning financial strategy with market development, we aim to demonstrate that reused materials can compete with new products, ensuring long-term sustainability and economic viability in this crucial sector.
