Most companies fail at becoming more circular not because of poor intentions — but because they won’t touch the one thing that actually matters: their product portfolio. Adding a repair service, a takeback programme, and a refurbished shop sounds like progress. In practice, it multiplies complexity. And complexity costs.
This is the “additive bias” in action. A well-documented cognitive tendency: when faced with a problem, people reach for addition almost by reflex. Adding feels like solving. Removing feels like losing something. Studies show this again and again — people add rather than subtract, even when subtraction is the obviously better answer.
The problem for circular economy: it only works economically when the portfolio stays manageable. With thousands of SKUs, a repair service becomes an operational nightmare. Each additional model needs its own spare parts, processes, quality standards. Companies with a lean portfolio integrate circularity faster — and cheaper.
A reduced range as the prerequisite for a circular business model
Step one: a smaller assortment. What do we actually need to offer? What needs to be produced at all? Which variants still exist simply because no one has made a call yet? This is where circularity offers something that’s often missing in internal discussions: an objective criterion that cuts through gut feeling and historical market share logic. If a product can’t be designed for repair, isn’t modular, can’t re-enter material loops — or if its lifespan is too short for repair to ever make economic sense — that’s a legitimate reason to question whether it should exist.
The result: low-margin products leave the range. What remains earns twice or three times over, through circular services that open up additional revenue streams.
Cat Reman is a useful reference point. Remanufactured components are typically sold at 45–85% of new part cost, while saving 80–90% of the raw materials that new production would require. Lower price, higher margin — because material and energy costs drop dramatically. The model also opens new markets: lower prices reach customer segments that new parts never did.
Product design comes second
Step two is design: modularity, standardisation, fewer distinct components and materials. Less complexity now, and in the next phase, a genuine decoupling of resource consumption from revenue. Margins come from efficiency, not volume. Fairphone makes this concrete: fewer models, longer support cycles, standardised modules. A spare part that fits three device generations makes sense — ecologically and economically.
Circular economy is a growth strategy. But only for those willing to focus and reduce first. Less is more.