Scaling resale-based circular business models: a study of Swedish fashion resellers

In this paper we present challenges that resale-based circular business models (CBMs) face when trying to scale up, as well as strategic resources that mitigates these challenges and facilitate scaling. The study is anchored in empirical findings from 10 retail companies operating with resale initiatives in the Swedish market. To structure the study, and provide a broader view of scalability that better fit the logic of CBM value creation, we draw on two streams of literature; the notion of novelty and efficiency-centred business model design elements and resource-based theory. The findings show that for resale-based CBMs to scale, these need to overcome challenges related to operational complexity in connection to handling large volumes of unique garments as well as lack of out-of-the box solutions. The study also offers insights into strategic resources and capabilities which can work as guidance for practitioners who want to analyse and manipulate their CBM's ability to scale