Reverse logistics refers to the management of product returns. Just like dealing with unsatisfied customers and counting stock, it is part and parcel of the online retail business.
Online shoppers return goods for a variety of reasons. Products may be broken or damaged, not as expected, or of new era black and white caps
Although returns account for a large proportion of online sales in many industries, companies fearing bad publicity are reluctant to talk new era black and white caps about them. As a result, reverse logistics gets little discussion. However, it can have enormous implications to the smooth and efficient running of a business.
Key components of reverse logistics
There are a number of key components to effective reverse logistics. To keep customers happy, online stores (known as e-retailers) must have a good returns policy in place, and ship exchange items/issue credit notes or refunds quickly and efficiently. According to research, eighty-nine percent of online buyers say return policies influence their decision to shop with an e-retailer.
It is also important to minimise the cost of reverse logistics to a business. One way to achieve this is to manage the retention or disposal of returned products. This is known as asset recovery.
Asset recovery
E-retailers place returned products into action categories to recover costs. These usually include:
1. Restock - unopened products that can go straight back into inventory
2. Repackage for sale - opened goods in "as new" condition suitable for repackaging and resale
3. Repair/recondition for sale - faulty products suitable for repair and resale at a lower cost
4. Return to vendor - items to be returned to the original vendor or manufacturer for credit or exchange
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