Meaning
Management processes for moving goods from their final destination back to a point of origin or disposal govern the flow of returns. Effective reverse logistics systems allow companies to recover value from products that were sold but later rejected by the consumer. This includes the handling of seasonal overstock and defective units.
Product Return
Retailers provide various channels for customers to send back unwanted items, including mail-in programs and in-store drop-offs. The cost of this transportation is a major expense for e-commerce firms. Efficiently consolidating these small shipments into larger loads reduces the impact on the bottom line.
Asset Recovery
Refurbishing returned electronics or repackaging goods for sale in outlet stores provides a secondary revenue stream. Parts from broken machines are often harvested to repair other units. This circular approach extends the life of the materials and reduces the need for new production.
Sophisticated sorting at the point of receipt determines which items have the highest potential for resale.
Circular Flow
Strategic planning involves deciding whether to repair, recycle or destroy each category of return. This decision is based on the remaining value of the item and the cost of the labor required to process it. Modern tracking software provides visibility into where these items are at every stage of the journey.
