With hassle-free shipping services increasingly becoming an integral part of the customer buying experience, more and more shippers are outsourcing their supply chain to third party logistics companies. 3PLs are known for their flexibility and scaleability and these traits are key in e-commerce today- particularly when it comes to product returns. As it affects everything from budget spending to sustainability, learn how outsourcing reverse logistics functions can benefit your business:
What is reverse logistics?
We often say “last-mile delivery” when we talk about supply chain solutions. But as we know, the supply chain is cyclical. Reverse logistics includes services that involve transportation, repurposing, and disposal of goods. You know, processes that happen after the customer receives the product. Think:
- Damaged goods
- Product recalls
- Warranty returns
- Inventory returns
- Reusable containers/packaging
- Reusable goods
- Seasonal items
- Hazardous material
The customer experience doesn’t stop after the sale
We all have our go-to preferred online retailer. Whether it’s apparel, pet supplies or airfare, we tend to give our loyalty to the company that doesn’t just offer the superior product and price but we stick with the company with the superior service. We’re willing to pay more for amenities or reliable customer service. When it comes to online retail, consumer expectations are at an all time high and the supply chain is rapidly evolving to meet them.
Consider return policies. Companies are finding that a customer’s positive experience with a retailer’s reverse logistics operations is key to loyalty and conversion. That means that comprehensive reverse logistics management can be a competitive advantage because if one company doesn’t offer free returns, reusable packaging and provide shipping labels, another company will.
Further, some online retailers without physical locations are outsourcing to 3PLs who partner with brick and mortar stores to provide service for customers to send back online returns by dropping them off at a kiosk. For example, third party provider Happy Returns is partnered with Rothy’s, an online retailer. Don’t want to print a shipping label? Simply return a pair of Rothy’s shoes to one of Happy Returns’ brick and mortar partners, like Sur La Table. Amazon has a similar partnership with Kohl’s.
Reverse logistics performance is a measurement of overall performance
Historically, companies might have looked at supply chain costs as second-priority items on the balance sheet. But today we know the importance of investing in supply chain management. Having disjointed and fragmented shipping operations is detrimental to the customer’s experience. And in turn, detrimental to the company. It’s true that about a third of online sales are returned by consumers, but this doesn’t have to be a business’s value recovery nightmare. Smart reverse logistics solutions facilitate efficient returns so customers are more likely to exchange or buy again. Efficient re-sell, recycle, and disposal solutions also help retailers and manufacturers recoup product value.
3PLs maximize your company’s value and minimize costs by coordinating your supply chain segments end-to-end, incorporating expert logistics services and adding value to your product. Read more about 3PLs, here.
- Reduce costs: Using a 3PL to manage your supply chain end-to-end ensures integrated and seamless operations from one segment to the next. 3PLs offer experience and insight that allows them to forecast and make adjustments to operations to eliminate inefficiencies. These adjustments could affect spending on things like bulky underused assets or intangibles like manpower.
- Customer conversion and retention: 3PLs are known for long-term customer-provider relationships. The longevity of customer-provider relationships is dependent on trust. With transparency into shipping operations being a major component of today’s buying experience, it’s important that both you and your customer trust in the reliability of your shipper. 3PLs are uniquely modeled for exceedance in customer retention.
- Increase sales: Companies quickly become somebody’s go-to retailer when shipping operations are quick and effortless. A 3PL’s transparency and reliability eliminate common shipping gripes so customers buy more product, more frequently knowing that returns are easy. This in mind, customers are more likely to return goods for credit and exchanges.
- Product improvement: 3PLs use optimized logistics software that produces data and analytics that can help to identify quality control issues. Collecting information on returns can give you a granular view of trends and patterns in orders or returns. Data and expert interpretation can expose shortcomings in a product and influence manufacturing to improve the product itself or marketing strategies to adjust the products presentation onine.
- Reverse logistics is inherently green: 3PLs use a network of providers that can offer eco-friendly expertise in varying services like
- Recycling parts and materials
- Reuse or restock
- Efficient transportation
The best of both worlds
The supply chain is becoming a customer-facing component of the buying experience. In order to meet today’s e-commerce standards, companies need to incorporate shipping policies that are equal in quality to their product. 3PLs offer supply chain expertise and bespoke solutions to companies so they can focus on their core competencies so they don’t sacrifice the quality of their product while also offering today’s gold standard in end-to-end shipping.
Give your customers a promise of reliability by emphasizing the quality of both product and service. Ensure your company’s reverse logistics process are professional, complex and consistent with a 3PL’s services.
Learn more about 3PL services and how they fit into your shipping functions at RTDLogistics.com