Blubirch: Growing an Auction Platform for Product Returns

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Abstract

Blubirch offered reverse supply chain solutions by automating return processing, improving quality grading and offering an auction marketplace for remarketing of returned products. The increasing trend of customers ordering more items than needed from online marketplaces, so that they could try out the items in the convenience of the home and return the rest, led to an increase in the volume, variety and value of product returns. By extending product lifespan and lowering returns processing costs, Blubirch enhanced the profitability of retailers and original equipment manufacturers (OEMs), and reduced environmental impact. In addition, the auction marketplace enabled retailers to quickly liquidate returned products and achieve better realisations while Blubirch earned a portion of the resale value. A robust design of the auction market enabled Blubirch to tackle bidder collusion, the winner’s curse, adverse selection and moral hazard problems. The co-founders of Blubirch were grappling with challenges and opportunities in growing the firm and prioritising opportunities for international expansion while managing financial constraints and operational bandwidth.

Additional Information

Product Type Case
Reference No. O&DS0009
Title Blubirch: Growing an Auction Platform for Product Returns
Pages 29
Published on Oct 31, 2025
Year of Event 2024
Authors Kankariya, Vedika; Mukherjee, Saral; Rampal, Jeevant;
Area Operations & Decision Sciences (O&DS)
Discipline Economics, Operations Management
Sector Transportation and Logistics
Learning Objective ● Understand the varied reasons for product returns and the negative impact of product returns on retailers and the environment. ● Understand differences between the forward and the reverse supply chain and identify ways of streamlining returns processing to reduce costs. ● Appreciate the approaches adopted by Blubirch to tackle the uncertainty in the quality of returned products and the associated concerns about adverse selection and moral hazard. ● Understand the auction design framework used by Blubirch to optimise resale value extraction. ● Identify and analyse potential expansion and growth opportunities for Blubirch in the reverse logistics industry.
Keywords Product Returns, Auction, Platform, Ecommerce, Logistics, Reverse Supply Chain
Country India
State Karnataka
City Bangalore
Organization Blubirch (Green Enabled IT Solutions Private Limited)
Courses MBA (PGP), MBA-PGPX, EEP, BPGP, AFP, FDP
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