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The increase in online shopping over the past few years has made a reverse logistics process essential for returning as much value as possible to inventory for reuse. How that process can flow best will depend on the industry. Brick and mortar stores tend to have fewer returns because customers can try on clothes, touch and feel products in person and ask questions that lead to a sale. Confidence in a business’ return policy and greater leniency in returns has led to more online sales and, consequently, more returns.
When a customer returns an item, it should not be heaped in a pile in a warehouse and written off as a loss if it does not need to be. The company should have a reverse logistics plan in place to return goods to inventory; dismantle products and return raw materials to inventory; return items to a manufacturer; send items to a liquidation center; or dispose of the items as required. There may be many steps involved to ensure the company can recover as much value as possible. However, these steps take place, having a plan is just as important for the business’ profitability as delivering finished product to market.
Think about what happens when you return an item to Amazon. You fill out a form, choose a method for return, either bring the item to UPS or someone appears at your door with a label and your credit card is immediately credited. No fuss. No worry. Knowing the return will be simple and will not cost you money gives you confidence in making the purchase to begin with. But all of this takes careful planning and knowing the least expensive way to make it seamless for your customer.
Can your business be profitable while accepting free returns? Well, that is what you need to know and what a reverse logistics expert can help you uncover. You need professionals like LJM Group to examine what you are paying for shipping expenses, how you are shipping products and where you can save money. Without looking at the full picture from production to delivery and back again, it is impossible to plan a cost-effective approach.
If an item is returned to the manufacturer by the seller, that movement is called reverse supply chain. This can happen when an item is returned by the customer to the store because of a defect. Since the item cannot be resold, it is returned to the manufacturer who might choose to refurbish it, dismantle it and use parts, or dispose of it.
The reverse supply chain process can be a part of a business’ reverse logistics process depending on the type of product involved. If the product is a food product, it cannot be dismantled and returned to its original raw materials. Machines, computers, electronics, and vehicles are good examples of products that might be returned to the manufacturer.
If you want to increase your business reverse logistics efficiency, decrease waste and increase profitability, let LJM Group assess your current workflows and recommend a more efficient plan to increase revenue and reduce expenses.