A recent survey of industrial decision-makers globally revealed that 92% of industrial businesses are grappling with resource scarcity, particularly in raw materials, labor, and electronic components, leading to increased costs and supply chain disruptions.1 The survey found that 67% of businesses plan to boost investments in circularity initiatives over the next three years. In addition, 84% agree circularity drives innovation and competitiveness.2
Given these results, it is instructive to consider manufacturing companies that have launched circular initiatives. A valuable example comes from the iconic motorcycle manufacturer Harley-Davidson.
In 2021 Harley-Davidson launched an online marketplace called H-D1 Marketplace on its H-D.com website.3 The H-D1 Marketplace allowed customers across North America to browse, purchase and even sell certified pre-owned Harley-Davidson motorcycles directly from the company's dealer network. Each used bike was subject to Harley's inspection and reconditioning process before being listed, backed by their certified warranty program.
The decision to open a marketplace for pre-owned motorcycles was part of the company’s five-year "Hardwire Strategic Plan" designed to reimagine its online presence and become an integrated digital hub for the brand's products and experiences.4
The strategy had several benefits. It promised to:
Capture more of the sizeable pre-owned motorcycle market, which was previously dominated by third-party dealers.
Provide a new revenue stream by facilitating sales of used bikes and taking a portion of each transaction.
Create a digital platform that drives customer engagement and brand loyalty beyond new bike sales.
Potentially attract more price-conscious buyers who can't afford a new H-D motorcycle.
Keep riders within the H-D ecosystem throughout the ownership lifecycle from new purchase to resale.
Customers can browse nationwide inventory of certified used Harleys through the online platform and home delivery is available. Each H-D Certified pre-owned motorcycle is thoroughly inspected and reconditioned by a certified H-D technician and is backed by a limited warranty. A 110-point Quality Assurance Inspection includes an extensive list of checks and function verifications to ensure H-D mechanical, functional, and cosmetic standards are met. The H-D Certified pre-owned motorcycles are only available at Harley-Davidson dealers.
In January 2023, the platform was expanded to include private-party sellers.5 This move opened the platform to private individuals, who can now list their Harleys for sale on the H-D1 Marketplace website. Interested buyers can contact sellers directly through the site, and Rider-to-Rider financing options are available for private party sales. The platform's nationwide database offers significant traffic potential for sellers and makes it easier for buyers to find specific motorcycles across the country.
There are important lessons that manufacturers can learn from HD’s initiative.
Embracing Distributors in the Launch Phase
Harley-Davidson's approach of involving participating dealers in the initial phase of launching the H-D1 Marketplace was strategic. By leveraging its dealer network, the company ensured a comprehensive selection of pre-owned bikes was available for customers to browse and customize online. This collaboration with dealers not only expanded the marketplace's inventory but also facilitated a seamless purchase experience for customers, showcasing the importance of distributor partnerships in launching successful marketplaces.
Simplicity in Branding and Market Fit
The H-D1 Marketplace could be considered a circular marketplace as it promotes reuse, but it was not branded this way. Instead, the management team decided to keep the branding simple and not focus on circular economy aspects of the initiative, which might not align with its demographic. By understanding its target audience and staying true to its brand identity, Harley-Davidson avoided diluting its messaging and maintained a clear focus on providing a platform for buying and selling pre-owned motorcycles. This strategic branding approach ensured consistency and resonance with their customer base.
Enriching the Marketplace with Value-Added Services
The enrichment of the H-D1 Marketplace with services like inspection, reconditioning, and financing options demonstrates how manufacturers can enhance customer experience and add value to their marketplace offerings. By offering a detailed inspection process for each listed bike, the marketplace offers quality assurance to buyers. There is more. The marketplace also offers financing, insurance, home delivery, and even riding lessons through the Harley-Davidson Riding Academy. This emphasis on service quality and customer support contributes to building trust and loyalty within the marketplace ecosystem.
Residual value upgrade effects
A commonly voiced concern about resale is that it will cannibalize new product sales and erode brand value. When buyers have the option to purchase used goods, especially if they are in good condition and available at a lower price, it can reduce the demand for new products. However, as Rich Bulger points out in his book Going Circular, there are ways to overcome these fears.6 For example, buyers can be encouraged to apply funds obtained from selling a used item towards the purchase of a new product. This approach encourages customers to upgrade to newer models or different products within the same brand ecosystem. It can also increase customer loyalty and retention by providing a seamless way for customers to upgrade their products, triggering a residual value upgrade effect. Additionally, can help to ensure that the resale market for the brand's products remains active, as customers are more likely to sell their used items if they know they can easily use the proceeds towards a new purchase. With over 25,000 used bikes now on H-D1 Marketplace, Harley-Davidson has found a path that embraces the value of secondary market sales.
Conclusion
Circular marketplaces come in various types, including product & material exchanges, reuse & resale marketplaces, sharing platforms, circular supply chain networks, and sustainable logistics platforms. These platforms facilitate the exchange of surplus materials, extend product lifecycles through resale, promote efficient asset utilization through sharing, enhance supply chain traceability and transparency, and optimize logistics to reduce carbon emissions. Manufacturers can learn from Harley-Davidson's experience by prioritizing distributor partnerships, maintaining brand alignment with target demographics, and enriching their marketplaces with valuable services to enhance customer satisfaction and drive marketplace success.
References
John Sprovieri, “Manufacturers Are Embracing the Circular Economy,” Assembly, March 13, 2024. https://www.assemblymag.com/articles/98400-manufacturers-are-embracing-the-circular-economy
Circularity: No Time to Waste, ABB Report, January 1 2025, https://resources.news.e.abb.com/attachments/published/111923/en-US/B890993BA0E5/ABB-Circularity_No_Time_To_Waste_.pdf
Dan Berthiaume, “Harley-Davidson roars into online used vehicle vertical,” CSA.com, July 21, 2021. https://chainstoreage.com/harley-davidson-roars-online-used-vehicle-vertical
“Harley-Davidson Resets Business to Execute the Hardwire Strategic Plan,” Harley Davison, February 2, 2021. https://investor.harley-davidson.com/news/news-details/2021/Harley-Davidson-Resets-Business-To-Execute-The-Hardwire-Strategic-Plan/default.aspx
Janaki Jitchotvisut, “Harley Invites Private Parties To Sell Used Bikes On H-D1 Marketplace,” RideApart, Jan 24, 2023, https://www.rideapart.com/news/632929/harley-hd1-marketplace-private-sellers/
Rich Bulger, Going Circular: The Evolution of Reverse Logistics into a Competitive Weapon, Brown Books Publishing Group, Dallas, 2024.