Returns and Reverse Logistics
Returns and reverse logistics go hand-in-hand. Returning goods is as much a tradition as buying or receiving them. Just as companies must do all they can to ensure their products reach store shelves, so too must they ensure a smooth process when some of those goods inevitably head back the other direction. When a consumer brings an item back to the store or ships it back to the retailer, a successful reverse logistics strategy means returns won't cause companies too much added pain when their merchandise re-enters the supply chain.
What is the reverse logistics process?
Unlike inbound logistics and outbound logistics, the reverse logistics process involves getting goods back to their origin for repackaging, repair, and/or redistribution - or to a method of disposal. In other words, reverse logistics takes the traditional direction of goods - headed toward the consumer - flips it, and reverses it. Though in some scenarios, the product may eventually end up with another consumer. The reverse logistics process can vary by industry, but at its essence, it goes something like:
- Customer returns product
- Return is processed by retailer
- Return is shipped back to manufacturer
- Manufacturer determines status of product
- Product is immediately repackaged - or product is sent for repair/refurbishment - or product is disposed of/recycled
- In the case of repackaging or repair/refurbishment, the product is once again slated for sale to the consumer
Having a smooth reverse logistics system in place reduces stress on the manufacturer, the retailer, and the consumer and makes repeat customers more likely.
What is an example of reverse logistics?
The most commonly thought of example of reverse logistics is the consumer return. But the reverse logistics process is more than that, as it includes elements like recycling, repairing, refurbishment, and more. An example of reverse logistics in action starts with a consumer returning a toy they deem defective to a store. The store then processes the return and ships it back to the manufacturer. Next, the manufacturer evaluates the item and determines it can be fixed. And then the manufacturer sends the product away for refurbishment. Finally, once refurbished and repackaged, the toy can be sold to another consumer, either directly through the manufacturer or through a retailer.
Why do we return goods?
There are a number of reasons why we return goods. After the holidays, people often return gifts they do not want. But throughout the year, returns may come due to product defects, an item being the wrong size/fit, a consumer finding a better price elsewhere, a product no longer being needed, the more abstract concept of buyer's remorse, or for no particular reason at all. Outside of direct consumer returns, a retailer may return unsold inventory to a manufacturer/distributor for credit as well. In most of these cases, the products then begin the reverse logistics process.
Questions about reverse logistics?
Have more questions about reverse logistics, or inbound logistics, or outbound logistics, or anything else freight and logistics? Just let us know! We're happy to get back to you to discuss your company's unique needs, and to help you address whatever freight and logistics challenges you face.
Looking for information on other freight and logistics topics? Take a look through our Learning Center. Here are a few pages to help you get started:
- Domestic Freight Services: Intermodal, Truckload, LTL
- Outsourced Managed Transportation Service Solutions