How well do you understand your reverse logistics strategies? Do you know if you have the most cost-effective outbound shipment plan in place? Understanding the costs within your supply chain is just as important as reducing them. The more details you know and the more you understand about your reverse logistics strategy, the better you can manage efficiencies and maximize ROI.
Many B2B and B2C companies struggle with this aspect of business, yet it is essential to profitability. Managing high-volume returns and remarketing can consume valuable time and energy, and often we spend our time putting out fires rather that locating the source of those challenges. So, how can you improve your reverse logistics plan starting today? What questions should you be asking?
Here are the top 3 questions to ask yourself:
- What Are Your Goals? According to SupplyChainBrain, the most effective strategy is implementing a reverse-logistics solution that capitalizes on the synergies between the provider and the customer. One of the first things you must know is where you would like to see improvements occur within your supply chain. Also, unanticipated costs and unexpected delays can negatively impact your profits, so you must identify what most often causes them, and then create a strategic plan to address the issue. Essentially, set a goal of greater efficiency, being specific where change must occur, and then devise a plan to obtain it.
- How Well Do You Manage High-Volume Returns? According to a study by Forrester Research Inc., much of the growth in S. e-commerce sales comes from online retailers improving their websites and customer service experience. With the growth of e-commerce comes the growth of returns. You need reliable ways to manage, track, and quickly resell those returned goods. A well-planned and customized reverse logistics plan can reduce storage and distribution costs, improve brand reputation, and lead to an overall better customer experience, which supports greater customer loyalty.
- How Well Is Your 3PL Working For You? Your third-party provider should be a partner that creates a fluid plan that is tailored specifically to the changing needs of your business. Your provider should give high-volume returns continuous oversight, and even offer sales expertise and execution of an optimum omni-channel marketing strategy that fits your business. The fewer times inventory is handled in the reverse logistics process, the faster it can reach its end destination, and that is where value is recouped. Resale and ROI cannot be realized if your inventory is not marketed correctly, professionally, and through the online marketplace channels where your customers are shopping.
Here are a few must-haves to look for in your 3PL provider:
- Your 3PL provider should be lowering your logistics costs and handling, using a centrally managed location.
- They should provide sales reports that allow you to determine your ROI, breaking down the information by individual item, model number, category, or price point for analysis.
- They should swiftly handle any returns or warranty returns, while allowing you to see the results of the product testing and to follow the progress of the product as it gets refurbished, remarketed, or sent back to you. They should provide you with detailed status reports that convey in-depth technical information, including quantity, condition, serial number, defect (if applicable), and included and/or missing accessories.
- Also note that the ease in which customers can make returns or purchases will be reflected in your revenue. Your provider should have an excellent rating and offer superior customer service in which to draw more traffic to their storefronts and increase your sales.
- Your provider should partner with you to identify the disposition channel that yields the highest return for each asset. Online channels like eBay, Amazon, Rakuten, and other popular platforms are effective for resale. According to MIT Sloan Management Review, an average-sized company can lose up to 50 percent of its returned inventory value if it fails to effectively take advantage of the correct secondary sales channels.
These reverse-logistic fundamentals can either support success or keep your company struggling for growth. By turning the focus on value recovery and improving your reverse-logistics strategies, product returns could actually become a positive aspect of doing business — a source of profit. But, improving reverse logistics requires taking a close look at whether your current strategy is working for you or against you.
By partnering with the right experienced reverse-logistics partner, you will receive customized solutions to manage your returns efficiently and to achieve the maximum possible ROI, allowing you to focus on other important aspects of your business.