Reverse Logistics

Reverse Logistics: The Principles, Processes & Potential Profits

Returns hurt – but knowing they could be prevented hurts more.

Many retailers attempt to shy away from the fact, but returned goods can
be expensive, frustrating, and detrimental to your sales. Without proper
management, an influx of returns can cripple your profits and ultimately
tarnish a potential relationship with existing or future consumers.

However, there is a way where you can convert these returns into
something sustainable and profitable.

This is where reverse logistics can become your greatest ally. But what
exactly is reverse logistics? ? And how can you adopt it to become a more
profitable business?

What Is Reverse Logistics?

Reverse Logistics is a part of supply chain management where goods
move from the consumer back to the seller, distributor, or manufacturer
— think of it as a backwards supply chain.

Some different types of reverse logistics are:

– Returns Management: dealing with returned products or avoiding
returns in the first place
– Unsold Goods: handling returned products from retailers and
distributors back to the manufacturer
– Packaging: reusing packaging materials to prevent waste
– End of Life (EOL): handling of returns that are no longer able to be
sold or serve a use
– Delivery failure: returning a product to a manufacturer via a
postal service due to failed delivery

The goal is to recoup the value, recycle or dispose of a product in the
most efficient way possible while keeping your customers happy, even
when they are dissatisfied with a product. Returns are a significant
expense for retailers but can also be a big factor in creating repeat

The Processes

Reverse logistics is important because it maintains an efficient flow of
products. The process creates value, reduces costs, improves customer
satisfaction and brand sentiment, and enhances sustainability with waste

The basic reverse logistics processes are returns, refurbishing,
repurposing, repairing, and recycling. It’s best practice to apply metrics to
each option to track improvement and success. Some examples of the
metrics to measure include:

Volume and value of the product being resold
Percentage of materials being recycled
Total energy cost for handling returns
Percentage of cost recovered and barriers to recovery
Waste Costs

In addition, your business may want to look at these processes to
streamline its reverse logistics processes and reduce losses.

It’s used to manage many processes such as:

Returns – when the consumer signals they want to return a
product, this requires a return authorisation and shipment, approval
of refunds, and identification of the product’s condition
Refurbish or Repurpose – once the product arrives at your
location, inspect it and assess its condition. This can be organised
into one of five categories: fix, resell as new, resell as a return,
recycle, scrap or refurbish
Repairs – reviewing the returned product and determining whether
it can be repaired. If it can, move it to the repair area. If not, sell any
sellable part
Recycle – if any products or parts of the product cannot be
repaired, refurbished or repurposed, they should be sent to an
appropriate area for recycling

Potential Profits

Did you know that 92% of consumers surveyed said they would buy again
if the product returns process was easy?

Effective reverse logistics management helps improve the returns process
and adds value by converting returned goods back into sales – whilst also
minimising storage and distribution costs.

Also, people are more likely to buy products from you if you have a unified
reverse logistics management in place and are even more likely to
become repeat customers if they’ve had a good returns experience.
Basically, everyone benefits.
Get In Touch With HUBBED Today
Having a seamless returns solution in place should be essential to your 
business model. At HUBBED, we enable retailers to have a returns solution
that requires no integration and provides a ready-made network of
locations for parcels to be dropped off. Please visit our website for more
information on how HUBBED can enable your business with the right
Returns solution.

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