What Is Reverse Logistics?

With the constant promotion of e-commerce, commodity return has become a necessary process in the logistics process. Reasonable treatment of reverse logistics can reuse enterprise resources and reduce supply chain costs. By reading this article, you will have a clearer understanding as well as the types and importance of reverse logistics. When your enterprise faces the problems of reverse logistics in the future, you will know what strategies can effectively avoid all kinds of troubles and make your enterprise develop smoothly.

What is the Meaning of Reverse Logistics?

Reverse logistics refers to the process that a merchant entrusts a third-party logistics company to deliver goods from the user’s location to the merchant’s location. The merchant drives the process. When the goods are sent out, users don’t need to fill in the sending address and the receiving address, all of which are automatically generated by the system.

1. Types of Reverse Logistics

Reverse logistics is not a simple reverse logistics activity. It has a wide range of types and involves different industries, mainly including the following aspects:

  • From the Channel of Recycling Goods

Recycled merchandise features include reverse logistics for returns and reverse logistics for recycling. Return reverse logistics refers to the customer returning the unsatisfied product to the merchant, and its flow is just the opposite of that of the conventional product. Reverse logistics refers to recycling the waste goods held by customers to all relevant enterprises in the supply chain.

  • From the Causes, Approaches, Treatment Methods, and Industrial Forms

According to the differences, it can be divided into six categories: complaint return, end-use return, commercial return, maintenance return, production scrap and by-products, and packaging.

2. Three Steps to Good Reverse Logistics

Reverse logistics generally includes the necessary steps such as the recycling, transportation, and disposal of commodities, which move in reverse from consumers.

  • Recycling

It is a process of collecting and retrieving goods from customers. This step is different for different recyclers and recyclers. It includes three types of recycling methods: retailer return recycling, consumer return recycling, and recycling center recycling.

  • Transportation

It is the moving process of a commodity returning from one place to another. Because manufacturers are often reluctant to be the final destination of returned goods, transportation steps exist widely in all aspects of reverse logistics. Manufacturers prefer to have a third-party logistics (3PL) company to help deal with these goods. Therefore, transportation companies are often required to keep these goods for further processing.

  • Disposal of Commodities

It is the decision and action made by the merchant when the customer is dissatisfied with the goods. Generally, there are two ways to deal with it, one is on-site, and the merchant arranges special personnel to go to the customer’s location to solve it, and the goods may be repaired or returned. The other is off-site, where defective goods are transported to other places for processing. Off-site treatment includes product inspection, replacement, repair, disassembly, remanufacturing, liquidation and sales, burial treatment, etc.

What is the Important of Reverse Logistics?

Most companies think that returning goods will only increase the cost, but implementing effective reverse logistics workflow will also bring many benefits to the company:

1. Cut the Cost

By formulating a perfect return process in advance, the related costs can be reduced, including operation management, logistics, transportation, technical support, customer service, etc.

2. Improve Customer Loyalty

Clear return principle, reasonable return price, clear return responsibility, avoiding disputes, etc. In short, an effective return reverse logistics strategy in e-commerce will not only not lose customers but can enhance customer loyalty to a certain extent.

3. Secondary Sales

For some unsalable goods or recycled goods with good performance, after proper processing, packaging, and treatment, they can be sold again to increase revenue and minimize the company’s losses as much as possible.

4. Brand Effect

When receiving the instruction of reverse logistics, a quick refund or replacement of goods will help to restore customers’ confidence in the brand. Efficient communication is the easiest way for customers to successfully complete the return process.

5. Improve the ecological environment

Nowadays, people’s environmental awareness has gradually increased, and various countries have formulated many laws and regulations related to environmental protection. The environmental performance of enterprises has become an important index to evaluate the operational performance of enterprises. In order to improve the environmental behavior of enterprises and enhance their image in the public, many enterprises have adopted reverse logistics strategies to reduce environmental pollution and resource consumption of products.

Five Strategies to Optimize Reverse Logistics you Must Follow

1. Attach Importance to Reverse Logistics

Managers should look at reverse logistics from the perspective of the long-term development of the enterprise, consider it by elevating it to the height of the enterprise development strategy, formulate an effective development strategy, and increase the investment of capital, manpower, and material resources.

2. Control the Entrance of Reverse Logistics

While ensuring the barrier-free return of customers, enterprises should control the entrance to prevent some unnecessary reverse logistics. Due to the problems in the company’s own work, it will cause some reverse logistics. Such as errors in product type or quantity during delivery. This type of reverse logistics can be completely avoided.

3. Build a Special Reverse Logistics System

Reverse logistics business often conflicts with conventional logistics in processing, inventory, distribution, and other links. When this happens, enterprises usually don’t pay attention to reverse logistics. Therefore, it is necessary to set up a specialized reverse logistics processing center so that reverse logistics can maintain an independent operating system.

4. Constructing Reverse Logistics Information System

The construction of a reverse logistics information processing system can not only facilitate enterprises to manage returned products, but also greatly improve the processing speed of returned products, coordinate the cooperation between reverse logistics and other businesses, and also save a lot of inventory costs and labor costs. For example, enterprises can add a reverse logistics management module to the traditional ERP system to solve the confusion between normal production and sales and reverse logistics processing.

5. Using the Third-Party Logistics Company to Solve the Reverse Logistics Problem

Because of the large investment and long period in the construction of reverse logistics facilities, and the lack of management experience and professionals in many enterprises, enterprises can use third-party logistics companies to solve their own reverse logistics problems. If you are looking for a third-party logistics company, then Honest FulPhilment should be a good choice for you. Honest FulPhilment is very transparent in communication and pricing. It also has its own internal software, and will constantly innovate and improve according to customer feedback.

Conclusion

Reverse logistics is an important part of the supply chain. Although reverse logistics is relatively complicated to handle, enterprises can choose to cooperate with professional third-party logistics companies to achieve the effect of 1+1 > 2. Honest FulPhilment also has the ability to help enterprises deal with various problems of reverse logistics. No matter where you are, Honest FulPhilment has very competitive prices, so please make your request and we will be very happy to serve you. Contact us now.

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