A logistics operation wouldn’t be complete without reverse logistics. This is the fine art and science of saving money in the process of handling returned products, fixing them, and hopefully pleasing customers with a speedy service. While it sounds easy, it’s actually a hard task to accomplish.
Small businesses and large businesses alike will need a reverse logistics plan, even if they only sell one product. There are no manufacturers out there that can boast a 100% satisfaction rate with all products. Mistakes happen, and consumers will inevitably have to return the product to get it fixed or ask for a refund. Having a plan to handle these claims will ensure your business isn’t losing money on the returns.
Shipping items back to the manufacturer for fixing or refunds doesn’t always mean you will be reimbursed for the shipping charges. This is a good example of why you should consolidate returns when you can, as it cuts down on shipping costs. Consolidating returns may also mean that you should have some extra refurbished products handy, so consumers won’t wait for the original item to ship back.
Instead of replacing a product completely, most business operations will instead refurbish a product and then send it back to the consumer. A refurbished product does take time to fix, but with the right team of developers, most fixes should be fairly quick and easy to conduct. After the warranty for the product is up, the business can also recover costs by charging for the fixes.
The spare parts it takes to fix the items that the consumer may return can be bought in bulk. They should be, but it is sometimes hard to judge how much of each part you might need. To better guess what you will need over the next six to twelve months, you should analyze the amount of returns and what the common problem was. That way you can order more parts that are necessary, and less that aren’t.
There are businesses that exist solely to aid you in your reverse logistics operations. These businesses, referenced as third party logistics companies, are able to easily judge your current operations and see how you can improve. This is because most 3PL companies have been in business long enough to see every type of business model, expand upon it, and save the business owner time and money. Their insight is invaluable for budding business.
Final Thoughts
Don’t forget that business is a long process, of which takes much analyzing and knowledge to master. Over the months and years you will eventually arrive at a better business model, or you can skip the waiting game and ask for help from a logistics company near you.
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