Reverse Logistics: The What, Why, and How!

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Reverse Logistics: The What, Why, and How!

Customers love shopping online but don’t always love what they buy. The average rate of return for online purchases is 20.8%. Returns can pose a nightmare for businesses that must figure out what to do with the merchandise. 

Returns are an important part of the customer experience, so your business needs to have an efficient way to handle them. One method businesses use to deal with returns is reverse logistics. Reverse logistics can help your business deal with more than just returns. 

So what is reverse logistics? Read on to discover how reverse logistics solutions can benefit your business. 

What Is Reverse Logistics? 

Reverse logistics is a supply chain management process that moves goods and services from customers back to companies. Its goal is to make the movement and management of finished products as cost-effective as possible. 

Returns are a perfect example of reverse logistics as they involve managing inventory returning to you. Other reverse logistics examples include reselling, refurbishing, and recycling. Managing leased items and the movement of your business equipment also falls into reverse logistics.  

Reverse Logistics Process 

In the traditional logistics process, goods flow in a straight line from manufacturers to customers. The reverse logistics process is more complicated. Your company has several options regarding what to do with goods coming back from customers.  

Reverse logistics begins by processing the return. Customers say they want to make a return, and then your company must approve it. You should determine the item’s condition and plan for it to be shipped back. 

Once the product arrives, your company needs to keep products moving. If the product is still good, you can try to resell it or donate it. Damaged products might be sent to be refurbished or recycled.

Reverse Logistics Optimization Strategies

Your company should have return policies that outline how and when you do returns. These policies help customers understand their role in the return process. Clear return policies can set your company apart from competitors.

Next, review your relationships with suppliers and shipping companies. Determine if there are steps that need changing to make moving goods more efficient. Companies like LTL Freight Company can deliver your goods to final customers and pick up returned and damaged goods in one trip.  

Lastly, your business should use centralized return centers. Shipping goods to one place reduces costs. A specialized return center can better sort products and determine the best way to get value out of them. 

Benefits of Reverse Logistics Management

Reverse logistics boost customer satisfaction and retention. Good reverse logistics allows you to process returns faster and get customers their money back. Making things right can win back a customer’s faith in your brand. 

Reducing costs is one of the most attractive reasons to do reverse logistics. Reverse logistics can help your business reclaim value from returned and damaged products. Planning for returns makes your whole supply chain more efficient and reduces costs. 

Reverse logistics helps reduce your company’s environmental footprint. It allows your brand to efficiently and safely recycle dangerous materials. 

Don’t Overlook This Process 

Reverse logistics is an essential part of every company’s supply chain. It helps you take care of returns and reclaim value from them. Failing to plan for these scenarios will hurt your business’s bottom line. 

Do you want to increase your business’s efficiency? Check out the business section of our website for more guides like this one.