Reverse Supply Chain and How to Embrace it

 
Reverse Logistics, as we know, is the backward logistics system that starts with the return of purchased goods by the consumer. It is the movement of the goods away from their final destination, which is the customer, back to the warehouse for proper disposal or for reselling purpose based on the good’s condition. Taking this back step in the supply chain cuts down on shipping costs. A report projects that by 2028 the global reverse logistics market will likely exceed 958 billion U.S. dollars.
 
eCommerce businesses, especially when starting, might completely focus on their forward supply chain to ensure timely and effective product delivery to the end customer, often ignoring reverse logistics. However, reverse supply chains play a significant role in ensuring eCommerce fulfillment.

 
Efficient handling of the reverse logistics process is crucial for most eCommerce businesses. Your customer is always more likely to choose a brand that enables them to return a product if it’s either faulty or not as per their requirement. You can only make it possible if your business has efficient reverse supply chain logistics. The absence of smooth reverse logistics can hamper the credibility of your business for your consumers.
 
A reverse supply chain with minimum errors is essential when organizing the collection of faulty products, picking up empty packaging for recycling, or collecting used commodities for exchange. To add to this, if your competitors are offering exchange deals, then you cannot afford to lag.
 
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Often the process involved can be more daunting than the forward supply chain. Research has found that companies in the US are spending 100s of billions annually on the reverse supply chain. In fact, the cost involved in processing a return can be two to three times more than the initial amount spent on sending it to the customer. However, an effective reverse supply chain can also help a business to cut down its expenditure in various ways.
 
In a reverse supply chain, the product comes back to the supplier or retailer from the customer. The reverse supply chain logistics doesn’t just involve returns management but also, in many cases, cleaning, sorting, and repackaging the product to make it shipment-ready. Given how elaborate reverse logistics can get, outsourcing 3PL might be the prudent way to go about it. So, it’s needless to say that a competent reverse logistics system has its benefits, making it imperative to embrace it for your business growth.
 

 
Use of the right software for route optimization and efficient collection scheduling might be your first step towards ensuring that your reverse logistics are planned efficiently.You can try to use the same resource for both your forward and reverse supply chains to ensure that you are doing multiple tasks with the same resource, thus saving on costs. Scheduling pickups and deliveries on the same route will reduce mileage and help you better utilize your workforce without significantly increasing their workload.
 
By incorporating the pickup of reusable packaging, you will save enormously on your packaging cost and contribute towards a lesser polluted environment. Remember, a business committed to the cause of sustainability readily becomes a more endearing and credible brand in the minds of the consumers.
 
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You can ensure better customer service if your reverse logistics are in place. According to a report, 30% of all products ordered online are returned as opposed to 8.89% from the brick-and-mortar counterparts. Your business can earn brownie points when your customer requests a return or exchange simply by ensuring that your reverse supply chain runs efficiently. Convenient scheduling of the pickup and fast delivery of the product they want in return will earn you the trust and confidence of your customers.
 

 
If your business can swap its forward and reverse supply chains seamlessly based on seasonal requirements, it will make your business model highly flexible and dynamic. So, to handle reverse logistics smoothly, here are six practical steps to follow:

• Ensure Smooth Vendor Relationship. If your eCommerce business involves selling products you are not manufacturing or producing, maintaining a good vendor relationship can impact a reverse supply chain. Your vendors must accept the disrupted products and make the necessary replacements.
• Timely Retrieval of the Product is Crucial. Whether you are facilitating vendors to sell their products through your eCommerce model or you are internally producing, this is the most critical step when it comes to effective handling of your reverse logistics.
• Effective Inventory Management. Many businesses make the mistake of ignoring the value of returned products. You must avoid doing that. A competent team of inventory managers can ensure that the returned products are properly sorted and stocked for reuse. A study by J. Andrew Petersen of the University of North Carolina at Chapel Hill and V. Kumar of Georgia State University has brought to the fore how a business can grow and outperform its competitors by ensuring robust reverse supply management.
• Returned Items Must be Reviewed. Often, the items customers return can be reused and even resold. However, you must check the items returned thoroughly for damages or defects and then revise the price if required. The inventory manager must also ensure they restock the products as soon as possible.
• Returned Goods, if not Resold, can be Refurbished. Returned products, even when they aren’t immediately reusable, can be refurbished and given a second life. With timely retrieval and access to the right process, these products can be upcycled to derive more profit from them. So, think twice before you consider a returned item undervalued.

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So, to sum it up, the reverse supply chain is equally critical as the forward supply chain, more so for an eCommerce business. After all, when in a survey, 92% of consumers said that they would buy again from a brand if they had an easy return process; you can’t afford to ignore reverse logistics. However, the smartest option would be to hire a professional supply chain vendor to handle it while you focus on your business.
 
Make your return policy and process easy and keep your customers happy.
 

 
Not just another 3PL provider, XPDEL is a growth enabler. We are a leading hi-tech Fulfillment and Logistics company supporting Direct to Consumer (D2C) and Business to Business (B2B) supply chains. Data analytics is at the heart of our 3PL services, powered by advanced technology and led by industry experts.