A Complete Guide to Reverse Logistics: Benefits, Types and Strategies

What is Reverse Logistics?

Reverse logistics, a part of supply chain management, is all about getting products from the people who use them back to retailers or the people who made them. Once a product has been delivered to a customer, it may need to go through reverse logistics for reasons like returns or recycling.

Reverse logistics starts with the last customer and follows the product back through the supply chain to its first distributor or manufacturer. Reverse logistics can also include steps where the final customer is in charge of getting rid of the product, such as recycling, fixing it up, or selling it again.

When things get to their final destination, the organization uses reverse logistics to move them back through the supply chain to the original seller and, in some cases, the original suppliers. The point is to sell or otherwise dispose of the item. Since online shopping started, returns have become more common and are now worth almost a trillion dollars each year around the world. If you are looking for reliable logistics, then Vimpex is the one for you. Log on to Vimpex and start your journey toward safe and reliable logistics.

Benefits of Reverse Logistics

Most notably, when you use reverse logistics, you gain:

  • Improve the use of existing resources
  • Increase customer satisfaction and repeat business.
  • Generate better ROI
  • Limit waste and unforeseen revenue.
  • Strengthen environmental resilience
  • Establish a standard of excellence as a way of life

Big e-commerce sites are putting pressure on traditional stores to make the return process easier. Making the return process easy has made it more likely for people to send things back. Some industry statistics say that the return rate is between 30% and 40%. Retailers now have easy return policies for customers, which builds trust, encourages customers to buy from them again, and opens up a new way to improve reverse logistics.

All of these retail returns can be good for businesses. The value of returned goods can be seen in the data and insights that help make decisions in the future about how much inventory to keep and how many people to hire. More cash flow from reusing returns and higher customer satisfaction can also come from better returns management.

Types of Reverse Logistics

Receiving Returns

The company that sells the product might have more than one way to take returns. When you buy something from a store, you usually return it to the same place where you buy it from. For online sales or shopping, the returns are sent back through the same delivery channel as the original shipment.

Processing Returns

To make sure that returns are taken care of correctly, all items must be received, written down, and checked. It will find out if there were any problems during transport or storage, so the right steps can be taken.

Resale of Returns 

What does the business do with the goods after it gets them? Let’s say they can be sent back to the supplier without any trouble. In that case, they are sold to other customers, and the original customer can get a refund or a new product.

Refurbishing Returns

If a product has been damaged in any way, it will need to go through some minor repairs before it can be sold again. After that, the company can sell the products again as “like new” or at a very low price. For example, the Indian furniture company Urban Ladder sells slightly damaged or used items on a separate website at very low prices.

Salvaging Returns

For products that can’t be sold as new, salvaging often entails bringing them back to a usable condition so they can be sold as used items.

Donating Returns 

If the supplier can’t use the goods, they can also be given to a charity.

Return Recycling 

Products that are broken or worn out may still have value. They may be unfit for use, but they can be broken down for parts and used in another form or sold for scrap.

Recall Returns

When things go wrong, you can see how important reverse logistics is. Sometimes, a business will ask a customer to return a product because of safety concerns or technical problems. This is called a recall. Here, they can check the products for problems and fix them, send out a warning, or give refunds for goods that are broken.

Reverse Logistics Strategies

Stick return labels on your products

Reverse logistics is easier when you label each product. This will simplify work management. This will also make your customers happier and let you work without making mistakes.

Use Bins to separate them

You can sort products by category and label them. This reduces errors and speeds up workflow. Scan restock boxes back to the warehouse correctly. Disposable tags should not be mixed with other tags when returning.

Categorize your boxes

Separate the items and put them in order of importance. Sort the list so that the most important returns are at the top. You can also keep them separate from the original so that they can be sorted quickly during the last step.

Using tough boxes

Make sure your packages are strong enough that they won’t break on the road. If you pack them right, there will be no chance that there will be damage to the product. Try to use thicker cardboard and bubble wraps that won’t tear to keep the product whole and in the right place.

Process data efficiently

A lot of e-commerce companies are looking for cheaper ways to resell products. Most of the time, people want companies that can process their data and inventory for a price they can afford. Hence, a lot of people outsource them to third-party logistics companies.

FAQ

What are the four pillars of logistics?

Scheduling, Traceability, Communications and Reporting are the four pillars of logistics.

What are the three main logistics objectives?

  1. Capital Reduction
  2. Cost Reduction
  3. Service Improvement

How much does Reverse Logistics cost?

Reverse Logistics is costlier than normal logistics as it includes more processes.

Can Reverse Logistics be outsourced?

Yes and outsourcing may also reduce the cost of reverse logistics.