How to Build a Successful Reverse Logistics Strategy

Investing in return infrastructure and reverse logistics can drive value for your business and yield invaluable data on consumer behavior.

Investing in return infrastructure can drive value for your business and yield invaluable data on consumer behavior.

The rise of ecommerce is creating some unexpected opportunities for shipping and logistics professionals. The more often consumers do business online, the more often returns will need to be considered when designing shipping, inventory, and processing solutions. In turn, this creates a need for “reverse logistics” solutions that address these challenges. With the right planning — and the help of an established third-party logistics (3PL) partner — this “U-turn” can create value even when products need to be returned and provide companies with key insights into consumer behavior.

Return Transparency Drives Consumer Trust

Building a successful reverse logistics strategy begins with earning your customers’ trust. By offering easy returns, consumers are more likely to develop a long-term relationship with your business. Going one step further — investing in free returns — can boost consumer spending by as much as 357%, according to CNBC. Put simply, online shoppers with positive return experiences are much more likely to make repeat purchases, more than compensating for the cost of making the return process worry-free.

Standardize the U-turn

Standardization lays the groundwork for a cost-effective and accurate return process. By providing customers with standardized return shipping labels, you can simultaneously make life easier for consumers while ensuring that products are sent to the right location, thus avoiding expensive delays. The value of creating standardized labels isn’t just an added convenience for the sender; it also helps facilitate efficient processing whenever your facilities receive unwanted goods, driving additional savings for your business.

Evaluate Returns Accurately to Avoid Headaches

Once products have been successfully returned, it’s up to your reverse logistics team to process the items accurately. First, you’ll need to examine the goods and identify the sender. This makes it possible to credit customers for the returned goods, update your inventory, and prepare the product for future sale. Mistakes at this stage can be costly — incorrectly identifying the sender or improperly checking the product to ensure it matches what was originally sent, for example. These hiccups can delay return credits or exchanges for customers and complicate resale or liquidation.

Create Value from Consumer Behavior

In addition to helping guide your customers through a seamless return process, a strong reverse logistics infrastructure should enable you to glean valuable insights about your customers’ preferences and habits. Learning why consumers make returns, which products are most likely to be returned, and which demographics most often take advantage of easy returns helps to drive down costs in the long run. Not only will data collection from reverse logistics infrastructure help you manage your inventory — it will allow you to better predict consumer behavior and adjust your business models accordingly.

Participate in the Circular Economy

An item’s sales life isn’t over just because it was returned. Your reverse logistics team should be able to identify the possibilities for unwanted goods: resale, consignment, liquidation, or disposal. By creating value for a product where other retailers may see the end of the line, you can drive down costs and reduce waste in the process.

Forge Strategic Partnerships

The growth of ecommerce means that you shouldn’t ask if you’ll develop your reverse logistics strategy, but when and how. As with other businesses, it may be advantageous to partner with a 3PL, many of which are strategically positioned to help companies manage returns and scale in the circular economy. With professional networks through the shipping and logistics industry, international reach, and the expertise to efficiently operate in the niche space of reverse logistics, 3PLs are an increasingly convenient solution for companies in the age of ecommerce.

At Primary Freight, we have extensive experience in crafting bespoke reverse logistics strategies for our ecommerce partners. By taking the time to understand the unique values of your business and your customers, we can help you develop a custom returns strategy that helps you meet evolving consumer expectations in the most cost-efficient manner possible. As an integrated logistics provider, we have the expertise, resources, and partnerships to handle any and all aspects of your ecommerce program, including warehousing, order fulfilment, distribution, and of course, returns.

If you’re interested in learning more about our ecommerce and reverse logistics services and solutions, contact us today at (800) 635-0013.


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