Realise the Importance of Reverse Logistics and Save Money
Reverse logistics or reverse supply chain management is nothing new, in fact, it has always been considered a necessary evil for product returns and recalls. Reverse logistics has been synonymous with extra costs and liability, as a process that brings expense rather than profit. However, in recent years there has been a shift in mentality regarding the importance of reverse logistics and reversing supply chains, and businesses are now discovering that ordinary wasteful occurrences are now an opportunity for profit.
Reverse logistics covers a multitude of processes in the aftermarket sector, from refurbishment, replacement, remanufacturing and scrapping. It is a key system needed to manage the end of life process for your business, allowing you to clear the supply chain path by removing existing products to make way for new season/new era products.
Why The Importance Of Reverse Logistics Is Undervalued
Reverse logistics is commonly known as the ‘Green Strategy’ as it lessens the environmental impact through reducing waste and recycling. There is a substantial profit to be made from reusing parts, but as the costs are not visible and clearly defined, organisations will ignore them.
Without a clear-cut solution, it is very easy for organisations to avoid reverse logistics problems and indeed, the reverse supply chain can be difficult to manage. Forecasting and estimating are essential for any business investment, but while it’s possible to record and plan for returns, it is impossible to reach exact numbers.
To counteract the unforeseeable returns, there is an opportunity for businesses to focus on the end of life strategies for their products, which therefore justifies the expense of faulty and unexpected returns. With an end of life plan in place, it is possible for businesses to predict the total volume of sales and therefore measure the savings and return on investment for reverse logistic programs.
How Reverse Logistics Can Save You Money
Asset Recovery and Avoiding Fines
By having a reverse logistics process for product returns, you can recapture the value of the product or ensure correct disposal, both of which will affect your bottom line. Running products through the supply chain in reverse will ensure maximum value from your product, whether it is through resale, repairs, or using the parts in another product. It is an excellent asset recovery system, and if the product has no value left, then at least, you can ensure a disposal that will avoid hefty fines from the authorities for incorrect disposal.
Second Return on Investment
The more value that you can extract from returned goods, the better. Instead of wasting time, costs and resources on raw materials, you can focus on a greener and cheaper solution. Through reusing or, at least, extending the life of a product through repair gives you a second return from one sale. For example, in the furniture market, customers will look for re-upholstery and repairs to extend the life of the investment, if not, second-hand and refurbished sales will give profits a boost.
Customer Satisfaction and Incentivisation
While not strictly saving money, improving customer satisfaction will improve your profits through business growth and increased sales. By having a liberal and easy returns policy, you will boost the trust and satisfaction of your customers. By taking faulty products seriously and offering repairs and replacements, you will see a significant increase in customer satisfaction through your proactivity and care.
Your returns policy will help to secure a strong customer base through trust and your commitment to ensuring good quality. With a returns policy that showcases how ‘green’ your business is, you incentivise customers to buy your products, giving increased consumer confidence and a base of new customers.
Three Ways To Profit After Realising The Importance of Reverse Logistics
1. Offer a trade-in program for new season products.
2. Increase your warranty and protection sales.
3. Mark down and sell damaged goods cheaper through other website but maintain a full charge for delivery.
How To Avoid Losses Through Reverse Logistics
To make sure your product retains the maximum value possible, you need to ensure that the returns system is robust and seamless. Careful handling and transportation are essential to keep the maximum value of your products and reduce the risk of damage or further damage. If your product is in unharmed with pristine new packaging, you can make sure your product can return to the shelf quickly.
Ribble Restore is an innovative packaging solution that enables returned goods to be repacked in a bespoke perfectly size box allowing retailers to regain the maximum value possible from returned items.
It is predicted that returns cost retailers £20 billion every single year, to ensure your business capitalises on reverse logistics, saves money and even profits from them, bespoke, protective packaging and timely returns are essential.