Reverse logistics demystified: how it benefits retailers

Getting product into store is no problem, there are hundreds of logistics companies doing that. The headache for retailers comes when goods need to be returned. This is reverse logistics. Revlogs offers the cure to all manner of returns-management ailments.

The Revlogs trucks visit retailers daily to collect returns.

The supply chain doesn’t necessarily end at the retailer. If everything goes according to plan, the product is sold to a satisfied customer and everyone lives happily ever after.

But what happens when a product isn’t sold? Or worse still, when it’s returned by a grumbling customer a few days or weeks after purchase?

In an ideal world it goes back into the supply chain, of course, and makes its way back to the supplier, the original manufacturer or a point of disposal. This is Reverse Logistics, otherwise known as Returns Management. While forward logistics is a neat, organised and gleaming priority of all manufacturers, distributors and retailers, reverse logistics is its messy, chaotic and oft-forgotten sibling.

Reverse logistics is

…the process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal. – Rogers and Tibben-Lembke (1998)

What does this mean for you, the retailer?

  • Instead of having overflowing returns rooms, which take up potential retail space, you could have returns rooms which are emptied on a daily basis.
  • You reduce shrinkage thanks to an up-to-the-minute database which tracks every item as it makes its way back along the supply chain.
  • Instead of having to fork out the cash for a replacement when one of your third-party repair centres reneges on a 7-day promise, you can rest assured that all reparable items will be back at the correct store well ahead of time.
  • You can keep track of which suppliers regularly supply faulty products and avoid from using these in the future.

US and European retailers are reaping the profits

The average retail store has about a 6 percent return rate. In the consumer electronics industry the rate may be as high as 8.5 percent while in the apparel industry it is 19.4 percent. Those retailers which have professional returns management systems “enjoy a 12% advantage in overall customer satisfaction over their competition” (Greve and Davis 2011) “In fact, improving reverse logistics can help a company increase revenue up to 5% of total sales.” (Greve 2010)

In the US and Europe, having an efficient reverse logistics system in place is vital to profitability but very few South African retailers have heard the term or realised how it can positively impact their businesses.

Revlogs was established 5 years ago and has made a major difference to the profitability of South African retailers who have employed Revlogs to handle their returns.

Revlogs caters for all reverse logistics and returns managements needs, and will create a package which is tailor-made to retailers’ requirements. For a basic monthly fee we take on all the hassle and deliver a profound shot in the arm to both customer satisfaction and the bottom line. In a tough economy there is no room for retailers that are carrying excess weight and Revlogs is the miracle cure you’ve been waiting for.

3 ways reverse logistics benefits retailers

  1. Frees up retail space
  2. Reduces shrinkage
  3. Improves customer service

To find out find out how easy it can be to bring dead products and space back to life contact Craig Plowden at Revlogs. You’ll soon be making money you didn’t even know was there.

 

Revlogs offers a specialist returns management service which takes care of the entire process, from retrieving product from the retailer, through to repairing it or returning it to the OEM, and ensuring the new or repaired product is back in the retailer’s hands timeously to ensure the best possible customer service.

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