Page 7 - Logistics News - September - October 2021

TH O UGHT LEAD ERS HIP

How reverse logistics

software streamlines returns

By Matt Lhormer: Vice President, Solutions at G2 Reverse Logistics

The growth of e-commerce during the COVID-19 pandemic saw online returns double in 2020,
underscoring the importance of a solid returns management programme that serves both retailers
and their customers.

everse logistics is a form of returns
management. It tracks products from
Rpoint of return by the customer and manages
where they end up. Once returned, they can be resold,
repaired, refurbished, recycled or simply scrapped. The
cost of reverse logistics might seem prohibitive, but the
money that businesses can save or recover from activities
such as ‘re-commerce’ and employing effective returns
management more than makes up for the initial cost.

Reverse logistics has a direct impact on profit margins.
As sales grow, companies can see margins eroded by the
cost of managing the accompanying increase in returns. By
employing a returns management strategy, businesses can
recoup some of that money. on sales growth, leaving them with little visibility into
potential revenue losses. Having products tied up in the
Many retailers and manufacturers choose to use a warehouse can severely impact a company’s cash flow and
third-party logistics (3PL) provider to increase their reverse expose credit issues. An inefficient returns process can also
logistics profit margin. Relying on such a service can affect the quality of customer interactions, costing future
streamline the process, save money over managing returns sales if customers are left unsatisfied and don’t continue to
in-house and free up resources so that companies can focus make purchases.
on other areas of the business.
Reverse-logistics software automates the process
Retailers and business-to-business companies typically of identifying the path for returned products that will
deal with high processing costs for handling returns. generate the highest cost recovery. From the time the
Expenses are incurred by the need to assess returned goods customer starts the returns process, the software can use
for damage, repack and send the items to another location machine learning to analyse products, returns rules and
for resale and refurbish products, resulting in a loss of sales demand. It can be tailored to the unique needs of the
resale value. In some industries, recycling can be a costly business to meet specific challenges.
and time-consuming process that requires companies to
follow strict safety regulations to ensure items are disposed Advantages of reverse logistics software include:
of properly. Certain products that can’t be resold end up in • All-in-one returns management portal.
landfills. • Automatic returns tracking.
• Cloud-based technology for easy access and sharing.
Many companies are unaware of the true cost of • Visibility into reasons for returns. L O GI S T I CS NEWS
product returns. Even if they collect data on returns, they • Data insights to help manage future returns.
lack the means to analyse it, and spend little time assessing • Forecasting data.
the role of returns in the supply chain. Instead, they focus • Increased brand credibility and customer retention. •

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