What’s Reverse Logistics and Why is it Important?

Posted by Port City Logistics on Oct 16, 2019 10:42:10 AM

REVERSE-LOGISTICSAs consumer buying habits have continued to evolve, the logistics industry has also had to adapt and improve. The ability to easily return unwanted items and receive a refund is one of the key factors fueling consumer sales and customer loyalty.

Because of the importance of returns in the modern shopping landscape, finding ways to streamline the return process has become an important part of the retail business model. This is where reverse logistics comes in.

The field of reverse logistics has emerged as companies seek to establish best practices for handling the large numbers of goods that are returned for reasons ranging from damage during shipping to a change of plans by the consumer.

What is Reverse Logistics?

Simply put, reverse logistics encompasses all of the activities required to process the flow of merchandise returned by consumers to the point-of-purchase and on to their final destination. While many companies simply view returned products as an unavoidable loss they must absorb as the cost of doing business, more and more companies are realizing that creating systems to not only deal with but learn from returned products can actually become an asset to their overall business model.

Since returns are a necessary part of the retail business, it is important for companies to assess what percentage of the items they sell are being returned, what is the reason for those returns, and what will happen to the product after it is returned. By having systems in place to analyze the return process, companies can quickly determine if there is a pattern to the types of items being returned, which could lead to adjustments in the way the item is manufactured or even a product recall. For items returned due to a change of consumer preferences, companies can create additional revenue streams by identifying ways to make returned products available to consumers for resell.

Reverse logistics also deals with the recycling of defective merchandise. Companies must determine if it is more cost effective to repair an item and sell it as refurbished, break the item down and sell it for parts, or discard the item and absorb the loss. In addition to determining what happens to the returned items, companies must also factor in the costs involved in transporting the item back up the supply chain to its final destination.

Dealing with the growing tide of items being returned by consumers is becoming an essential part of business for many companies. Creating a plan to effectively and economically process and re-purpose returned items is a good way to both satisfy consumers and maximize business profitability.

Choose Port City Logistics

When you need a single-source logistics company in Savannah, Ga, then Port City Logistics is the company for you! We pride ourselves in our knowledgeable and friendly staff that will help you through the entire distribution process so you don’t have to worry about a thing.

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Topics: Single Source Logistics