The Importance of Reverse Logistics

Reverse logistics is one of the most frequently overlooked elements of the complete business operations cycle, yet it presents enormous opportunity for companies skilled in it.

Reverse Logistics can be defined as a study on the movement of a returned product or batches of products to recapture value by swiftly deciding how to deal with the product so that is can re-enter the supply stream as soon as possible in a predetermined form.

As E-Commerce grows at an extremely rapid rate and more consumers are now shopping online, this growth is also resulting in the growth of online returns. A large number of online marketers are encouraging consumers to buy and return products by means of “free returns shipping” or “open returns policies”. This is creating an even bigger challenge to Reverse Logistics teams who are seeking to extract value from those returns.

In a survey conducted by Harris Interactive it was found that 85% of customers will not shop with your company again if the returns process is not convenient, however 95% of customers will shop with you again if your returns process is convenient.

This is presenting a new and more challenging environment for Reverse Logistics professionals as well as opportunities for companies who recognize the competitive advantage that can be gained from effectively managing their returns.

It’s extremely important to implement processes that streamline returns so that sales and repeat customers aren’t lost forever. For companies that utilize in-house logistics, there are some very important factors to consider during the returns process:

  • Make the returns process as easy as possible. It used to be that companies made consumers jump through hoops in order to “earn” a return. But with the stakes being so high, it’s extremely important to make the process painless. (Making returns easier can be accomplished by generating return labels, tracking the return shipment, and scheduling return shipments.)
  • Create an actual return policy. The easiest way to control the entire process is to create a concrete game plan regarding the returns process. Document this entire process both for your internal team as well as for customers.

Of course, some companies utilize outsourced fulfillment services. Many of these companies offer returns processing as well. However, don’t just assume that all companies offer “professional returns processing” services. Companies that truly specialize in returns processing will be able to show a track record of success with these types of programs. For example, Links Warehousing and Fulfillment, is a Toronto, Canada based 3PL and is an experienced partner who understands the importance of reverse logistics and provides a streamlined service and customized solutions to generate maximum recovery for our clients. They can assist you by providing a centralized return centre; manage the flow of returned product, manage product recalls, and will inspect, test, repair, cannibalize parts for re-use as well as repackage products in preparation for resale. They will also take care of end of life recycling as well as regulatory-compliant disposal, and will also consolidate returns for shipment back to your facility in the US or directly to your vendor. As you can see, companies that specialize in returns handling provide very professional and sophisticated services.

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