E-commerce companies looking to scale in the age of Amazon need a comprehensive reverse logistics strategy that controls costs and earns consumer loyalty.
For your online business to thrive, it’s essential that you develop a reverse logistics strategy that works well for your customers, drives value for your company, and saves money for everyone involved. Without a hassle-free returns policy, customers may very well take their business elsewhere, stunting your online growth and causing you to lose favored status in Amazon rankings. Indeed, Marketing Land reports that 9 out of 10 consumers point to free shipping as their number one incentive to make more online purchases, meaning that the time to build a better returns process is now — not later.
Haphazard Reverse Logistics Balloons Costs and Causes Headaches
Compared to reverse logistics, “forward” logistics seems orderly and intuitive. Purchases are prepared for shipment, sent out for transportation, and delivered to customers. Items typically travel with similar products until they’re sorted for final delivery, allowing for cost-effective bundling that offsets costs and prioritizes speed.
The nature of modern shipping and logistics and shifting consumer preferences, of course, makes it inevitable that unexpected issues will sometimes crop up and force customers to return products. Fortunately, it’s possible to methodically craft a “reverse” logistics strategy that makes life easier for your customers, gleans valuable insights for your business, and extends items’ shelf lives.
At its best, reverse logistics can be just as orderly, simple, and cost-effective as traditional forward logistics. At its worst, however, it can become unnecessarily complicated. Without a standardized process in place to guide customer returns and streamline work for your team and business partners, a mishandled return can drain your resources and demand more attention from personnel than the unwanted item is ultimately worth — not to mention sapping your customers’ goodwill.
The Right Strategies Drive Insights that Can Improve Your Business
While your primary concern in designing an effective reverse logistics process is to receive customer returns and credit them back and/or turn replacement goods around as quickly and efficiently possible, the most useful strategies also derive key insights into consumer behavior that help shippers pinpoint areas for improvement.
For example, if your reverse logistics strategy reveals that a large number of products are being returned due to damage, you’ll be gaining useful information that may compel your business to improve packaging design, outbound order guidance, and carrier partnerships. Ineffective reverse logistics infrastructure may only prioritize guiding the product back to your facility and refunding the customer in order to avoid critical reviews, but a more robust network will notice trends that can, hopefully, reduce returns in the future and help you better understand consumer behavior over time.
Well-Coordinated Returns Lengthen Shelf Life and Save Money
The ability to derive value from returned items is another reason to invest in a reverse logistics strategy. While conventional wisdom holds that damaged or unwanted items are sunken costs for businesses, the rise of e-commerce has given enterprising companies the opportunity to generate revenue from returned products.
Through a comprehensive returns process, it’s possible for your team to maximize the value of unwanted goods by designating them for resale, consignment, liquidation, or disposal. Breathing second life into these assets reduces operational waste — all while improving your bottom line.
Experienced Partners Can Boost Your Reverse Logistics ROI
In the age of Amazon and its FBA program, it’s vital that you maintain a reverse logistics strategy that’s optimized to save you money and provide your customers with peace of mind. Whether you ship to individuals or to businesses, the right returns process will require a steady hand to develop and implement it so that it yields the greatest benefit. If building out reverse logistics infrastructure on your own seems daunting, partnering with a qualified third-party logistics (3PL) or integrated logistics services provider (ISP) may be just what you need to improve your returns process.
With more than 20 years of experience, Primary Freight has the necessary expertise to help you craft an optimized reverse logistics strategy in order to increase operational efficiency and maximize profitability. E-commerce is an incredibly fast-paced industry with little to no margin for error. By teaming up with an experienced partner like Primary, you’re not just outsourcing your shipping and logistics program — you’re giving yourself a serious competitive advantage.
If you’d like to learn more about Primary Freight’s warehousing, packing, and distribution services, give us a call today at (800) 635-0013 — we look forward to hearing from you!