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05Dec, 2014

Reverse Logistics – A crucial part of your E-commerce

Author Chris Wilson Category

Embracing ecommerce is much more than just putting up an online storefront; it is transformation of your business model, your sales model, your supply chain and quite possibly even your company’s culture. To be successful you have to adopt and master a number of competencies which were not very important earlier.

Ecommerce reverse logistics is one such competence that is an aftermarket activity with far reaching impact on your business. Along with the rise in number of ecommerce transactions, returns have also increased multifold. With returns having a big impact on your business bottom line reverse logistics are even more critical as they define the entire process of how returns are handled. As with any other technological impression, reverse logistics has its own challenges:

  • Often neglected internally as its impact on bottom line or customer satisfaction is not very apparent. Also, most enterprises see reverse logistics as a burden as it is an additional cost to their business.
  • Unlike forward logistics, it is unplanned and mostly unpredictable; there is a high degree of uncertainty on the location and quantity of the recovered items and the time of recovery process.
  • Intricacy in predicting the condition of the recovered items coupled with the high costs of delaying.
  • Lack of reverse logistics management experience
  • Reverse logistics process is still largely undocumented with limited paper trail
  • Misconception that reverse logistics has much lesser impact on the bottom line compared to forward logistics

Returns management is a serious business; as it acts as a decisive factor in holding your existing customers. Customers have ample choice about where they buy products. A study by comScore in 2014 analyzed data from 5,800 U.S. online shoppers and found that 82% completes a sale if offered the options of return in store or ship back for free using prepaid label provided. It implies that your return policy has enormous impact on your sales. Time has arrived when businesses must strengthen attention on reverse logistics. But how do you overcome the associated challenges?

  • Introduce top-down approach to implement returns management; senior management must pay full attention to reverse logistics and returns as businesses can no longer afford to neglect it.
  • Business must strengthen staff’s awareness about impact of reverse logistics and costs associated; proper training on best practices can make them highly useful for your business operations.
  • Returns management has influence on your costs and it is important for you to take the steps to reduce this cost to your business. You need to continually revisit reverse logistics process, design to ensure that they are minimizing costs and maximizing recovery rates for your business.
  • Involve technology; robust ecommerce cart seamlessly integrated with ERP can help manage accurate real time information across systems for everyone in your supply chain.
  • Outsourcing is always an option in case you find reverse logistics costly or difficult to manage. It is always wise to outsource that part of your business which is neither your primary business nor you have core competence in doing it. Better to pay an expert and get the job done efficiently.

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Reverse Logistics – A crucial part of your E-commerce