“If a region has a lot of recycling options, organizations in that region are far more likely to engage in the online material exchanges. In short, regional norms play a big role.” —Kevin Linderman

Over the last decade, state- and county-run online waste exchanges have kept reusable goods in circulation and prevented several tons of waste from crowding landfills. The Internet seems like an ideal venue to connect companies looking to get rid of surplus materials—lumber, cement, and the like—with buyers in need of the items.

But the exchanges tend to function better in theory than in practice. And that prompted Professor Kevin Linderman and Associate Professor Karen Donohue, along with their PhD student Suvrat Dhanorkar, to explore the factors that cause them to fail—and how they could be improved.

According to Donohue, visibility emerged as a big factor. “The listings typically don’t have pictures, so buyers can be uncertain over what they’re getting,” she explains. “And even if there are detailed descriptions, buyers still might not be clear about the quality of the items.”

As Linderman explains, that leads to lack of buyer interest—and seller disengagement. “If there’s no interest, a seller might think: Why not just dump the items in a landfill?” he says. “You can see how that would be easier than holding onto excess inventory.”

Their research also turned this result: In counties with a wide range of reuse options, sellers had better luck on the exchanges. According to Donohue that was one of the most surprising findings. “You might see them as competition for the exchanges,” she notes. “But it appears that those competitors can create more of a market—and even a culture of wanting to reuse and recycle.” 

And that can have policy implications for municipalities looking to kick start their exchanges. “If you can create a community in which buyers are used to buying recycled items, it can help sellers ride out their listing a little longer on an exchange,” she says.

Watch Linderman and Donohue further describe their findings:

 

“Repurposing Materials and Waste through Online Exchanges: Overcoming the Last Hurdle”
Dhanorkar, Suvrat; Donohue, Karen; Linderman, Kevin, Production and Operations Management (2015)