A distribution network is simple enough when it goes in one direction: The manufacturer makes the product, the retailer sells the product, and the customer receives the product. Yay, everyone is happy! Right?
Well, not always. Sometimes, the customer is unhappy, and then you have a much bigger challenge on your hands.
Reverse logistics is the process of receiving returned products from the customer. It has become a major problem businesses have to deal with in what economists are calling “The Era of Returns.”
Indeed, these days customer demand leans toward a free and simple return process that many businesses are simply not equipped to handle. That being said, when the reverse logistics process is optimized, there are many benefits you can expect. This includes increased sales and customer loyalty, all while minimizing cost of operations.
Here are a few tips on how you can better manage reverse logistics:
Rely on Modern Delivery Technology
The best part about working in logistics today is that we have advanced technology to make our lives a lot easier.
If you haven’t already, make sure you are utilizing an advanced delivery software program. This kind of technology can provide increased visibility on the delivery and return process. It will let you know when a product is received, when it is returned, where it is during transit, and when it can be expected to return to the hub.
It can also help you optimize a delivery route which minimizes unreceived packages and the time trucks spend on the road. This is not only good for business, but good for the environment as well. Win-win!
Balance Costs
Like any other aspect of a business, reverse logistics is all about balancing costs.
Many consumers expect free returns like the major retailers provide. But for some businesses, this simply isn’t possible.
Taking on the cost of returns can put pressure on your bottom line, especially on a product which is already costing you money.
To save money on the return process, automate any part of the process that does not require manual labor. This could include scanning returned products and designating them to the correct location of the warehouse.
If a few small changes can make free returns an option for your business, you should definitely go for it.
Prioritize Communication with the Customer
If free returns are not an option for your small business, there are other ways you can cater toward customer satisfaction.
You should aim to prioritize communication with customers at all points during the sale and return process. This includes having an understandable and accessible return process, and a survey which asks them why products are being returned.
You can also empower the customer by using technologies which give them power to control their return pick up. Convenience is the key.
Customers appreciate transparency, especially on the topic of how they will receive their money back. Being open and communicative with the customer is not only good business, but it will also help facilitate your reverse logistics.
Learn From Returns
In reverse logistics, it is not enough to simply receive the returned packages. You should also learn from your returns, and take this data into consideration moving forward.
This is why collecting information from customers is so important. If the product was simply not their size or style, it can easily be resold to someone else.
However, if the product was broken or not what they expected, there may need to be some changes made on your end. For example, consider adding more pictures or a better description to your website in order to give customers a better idea of what they are buying.
Broken or dysfunctional products can either be repaired and resold, or sent back to the manufacturer to be recycled back into parts. Products that break easily or are generally not satisfactory to customers should not be restocked.
Your Trusted East Coast 3PL Provider
Are you struggling to keep up with the shipping and returns for your growing business? Cannon Hill Logistics can help! We are a trusted third party logistics provider with access to nearly half the US population with our economical ground shipping. Allow us to deal with storage, distribution, and reverse logistics, so you can focus on running your business. Call now to learn more!
