The role of logistics for profitability in circular business models

A key step toward sustainable trade involves introducing and scaling up circular business models, particularly those close to consumers, such as used sales, rentals, and repair services. Interest in these models has surged in recent years, leading many Swedish companies with traditional linear models to expand their operations by incorporating circular initiatives. Alongside this shift, a growing number of companies now operate exclusively with circular business models, further driving momentum and interest in sustainable practices. 

 However, the logistics underpinning these circular business models—whether managed internally or through external logistics partners—presents significant challenges. High costs related to handling, storage, and transportation are frequently cited as key barriers to introducing and scaling profitable circular business models. Achieving profitability is essential for driving the long-term shift of the trade sector toward a circular economy. Therefore, a foundational aim of this project is to deepen understanding of the logistics operations supporting circular business models. This knowledge is critical to overcoming logistical barriers and fostering sustainable growth in the industry. 

Project Goal

The primary goal of this project was to identify the key challenges to achieving profitability within circular business models. By addressing these challenges, the project aims to provide a solid foundation for designing more efficient—and consequently, more profitable—circular business models.

Purpose

The purpose of this project was to investigate how logistics operations within various circular business models can be structured to maximize profitability.