What is Reverse Logistics?

Posted by Port City Logistics on Jun 29, 2020 8:00:00 AM

Reverse logistics is an industry term that refers to the flow of goods or materials from a delivery point back through the supply chain to its original location. Though this may seem like a simple process, this reverse flow can be extremely troublesome for a mismanaged supply chain. The typical purpose is to capture value (i.e refurbish damages, remanufacturing, redistribution) and proper disposal. In this article, we’ll explain what is reverse logistics and how it is implemented for eCommerce businesses.

Return of Goods Sold

Some businesses think that once a product is delivered, everything is done with that invoice order; however, that is far from the case. These few examples are instances that a reverse logistics model should be used to:

  • Product Returns
  • Return of unsold goods by distribution partners due to contract terms
  • Package Reuse
  • Item Refurbishment
  • Repairs and maintenance as per guarantee agreements
  • Return of Defective Items
  • Selling of goods to a secondary market in response to returns or overstocking
  • Recycling and disposal of end-of-life goods

Naturally, market dynamics influence these instances. According to a Shopify study, 90% of customers “highly value” free returns. This data point means one thing: customer satisfaction and freedom to return items in some shape or form drives the buyer’s decision in purchasing your product or not. This forces a business owner’s hand at implementing a solid reverse logistics plan. Though it may come at the expense of some sales if you offer free shipping, the benefits of 90% of customers wanting free returns makes the risk worthwhile. They’ll be more likely to buy from your business because of your no-hassle return policy.

What is Reverse logistics?

Why Is It Important?

If you’ve ever received a defective, wrong, or ill-fitting product, you don’t want to be stuck with something you don’t want, nor fight tooth and nail to send it back. Reverse logistics makes this process as simple as possible so that you can repair, replace, return, or recycle the original item.

Additionally, you’ll learn ample information about your products. You’ll be able to analyze why returns happen, what issues you have with your product, and customer tendency. This allows you to reassess your product’s production and overall durability.

Streamlined Service Costs

Partnering with a 3PL logistics company like Port City Logistics can help you reduce overall reverse logistics costs by streamlining your storage, reducing transportation/return costs, and improving your overall supply chain. By moving toward a 3PL partnership, your business will enjoy the benefits of experienced shipping at a lower than expected cost. This means you’ll be able to realign your energy toward expanding your core business instead of wasting time jumping through the many hurdles of shipping.

Contact Port City Logistics

Reverse logistics are a necessary tool for any eCommerce business. As one of Savannah's top logistics companies, Port City Logistics leads the way for those who need top-tier customs bonded warehousing. Our experienced team will keep your goods safe, secure, and ready for transport. If you think you may need to learn more about customs bonded warehousing, please contact us today.



Topics: Single Source Logistics, Third Party Logistics (3PL), Supply Chain Efficiency