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Reverse Logistics. How to return goods for maximum profit
In the world of commodity business, returns management is becoming not just a necessity, but a strategically important task. It is an entire system that allows you to efficiently return goods back into circulation, reducing the loss of time, money and customers.
What is reverse logistics?
Reverse logistics is the process of returning goods from the customer to the manufacturer with a subsequent refund of the purchase price.
Key steps in reverse logistics:
Reverse logistics is the process of returning goods from the customer to the manufacturer with a subsequent refund of the purchase price.
Key steps in reverse logistics:
- Returns management: involves handling returned goods to maintain customer loyalty. Make sure the returns process is convenient for customers and resolves their issues quickly - this will improve the overall impression of your company.
- Repair and refurbishment: fix broken items and then resell them. This will help you save money.
- Recycling: extracting valuable parts from faulty goods to create new ones. For example, if you sell motherboards, it's inefficient to throw away non-working ones, as they contain up to one and a half grams of gold.
What the reverse logistics process looks like with a simple example
Imagine your customer has bought headphones but they are faulty. Here's what the reverse logistics process looks like in such a case.
In this way, even defective goods can be given a new lease of life or disposed of with minimal loss.
Imagine your customer has bought headphones but they are faulty. Here's what the reverse logistics process looks like in such a case.
- Returns: the customer sends the headphones back to the shop and they go to the returns department. The customer is reimbursed.
- Transport and inspection: the headphones are delivered to the shop's warehouse where they are inspected for damage and discrepancies.
- Sorting: after inspection, the goods are sent to one of the departments, either for repair or for disposal if the damage is severe.
- Processing: in the repair department, the headphones are repaired and put back into working order so that they can be resold as refurbished goods. If repair is not possible, the headphones will be sent for recycling to recover valuable materials.
In this way, even defective goods can be given a new lease of life or disposed of with minimal loss.
Examples of reverse logistics from major manufacturers
Electronics: Apple and Dell recycle old devices, recovering valuable materials such as gold and rare earth elements. These are used in the production of new goods, which helps to save on raw materials.
Automakers: Toyota and Ford are actively repairing and reselling parts, which generates extra money and reduces car waste.
Electronics: Apple and Dell recycle old devices, recovering valuable materials such as gold and rare earth elements. These are used in the production of new goods, which helps to save on raw materials.
Automakers: Toyota and Ford are actively repairing and reselling parts, which generates extra money and reduces car waste.
How to optimise the reverse logistics process
If you want your business to not just survive, but to continually increase profits, -tunalise your reverse logistics processes. After all, if a customer is disappointed in you, he will not come back and will not recommend you to his friends. And this risks losing money.
- Pay attention to packaging: poor packaging can cause damage to goods during transport. Use sturdy materials.
- Quality control: check goods before dispatch to minimise returns.
- Employee training: train employees so they know how to handle returns and deal with irate customers.
- Partnerships: partner with firms that specialise in reverse logistics to delegate tasks and reduce costs
If you want your business to not just survive, but to continually increase profits, -tunalise your reverse logistics processes. After all, if a customer is disappointed in you, he will not come back and will not recommend you to his friends. And this risks losing money.
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