In this article, we shall explain the reverse logistics definition in detail.
As a matter of fact, reverse logistics have often been neglected. However, the changing market dynamics such as online shopping, customer retention, and customer expectations have made this area of supply chain come out of slumber to ensure competitiveness in the global market today.
Companies need to invest more on innovation to help keep them relevant and profitable. Precisely, reverse logistics require proper planning, implementation, and controlling.
What is Reverse Logistics?
Reverse logistics definition in supply chain management is the process of returning goods or products from the customer back to the manufacturer or wholesaler for repair, dismantling, recycling, or maintenance. The return process is usually implemented when the customer complains about a purchased and delivered product or when manufacturers recall already distributed products from the distribution centers or customers.
Reverse Logistics Examples
- Customers returning products.
- Return of unsold goods from a distribution center or wholesaler.
- Packaging reuse
- Goods refurbishment
- Products returned for scheduled maintenance and repair.
- Goods returned to the factory for remanufacturing.
- Returning of overstocked goods.
- Disposal and recycling of goods.
Examples of reverse logistics companies
ShipBob is one of the renowned 3PL companies offering forward and reverse logistics for online e-commerce stores. They have distribution centers or warehouses and integrate easily with major stores such as Amazon, Big commerce, Shopify, and more.
- Bowman Logistics
Bowman Logistics offers both forward and reverse logistics. They offer distribution centers for B2B and B2C companies. Bowman Logistics also delivers refrigerated products.
ShipWizard provides forward and reverse logistics for e-commerce online stores. ShipWizard has specialized in offering the best reverse logistics management services ensuring customers get the best experience. It also integrates easily with major e-commerce stores such as eBay and Amazon.
Optoro is a tech-savvy company with a focus on reverse logistics management. The Optoro team purely specializes in returns management and have partnered with returnly for refunds.
- XPO Logistics
XPO Logistics has over 100 million sq. ft. of warehouse facilities in Asia and America making it the 2nd largest forward and reverse logistics company in North America. XPO Logistics supports both B2B and B2C companies. They also offer refurbishment services.
- Mercury Logistics.
Mercury Logistics handles both forward and reverse logistics across the US. It has its distribution centers across the US headquarters. The company is tech-savvy and uses Microsoft Dynamics AX to provide live tracking and real-time order management. They deliver products for automotive, pharmaceutical, and beverages (alcohol and spirits).
Benefits of Reverse Logistics Management
Let us have a look at some of the advantages of reverse logistics management.
- Better Customer Relations and Satisfaction.
In fact, the significance of implementing a reverse logistics program is to help improve the customer relationship. You shouldn’t assume that the process isn’t important because the customer is returning the products to you. By ensuring an effective customer relations process, you will increase the customer retention and satisfaction in the long-run.
Ideally, you will show to the customers that you need them even when the purchase of products is finalized. Accepting the returned products shows that your sole intent in business is to ensure your customers get the best services and products.
- Improves Brand Awareness and Image.
There isn’t any other way to improve your brand image and awareness rather than the creative implementation of reverse logistics management process. Customers will tend to trust your brand.
In reality, the concept of reverse logistics reduces the amount of trash sent to the landfills. Additionally, the items could have been put to better use rather than dump them in the garbage. This in return improves the business brand name and image.
The increasing climate change has made customers prefer environmentally friendly products. Therefore, companies should try as much to be eco-friendly.
- Enhanced Market Penetration.
The sole reason for reverse logistics isn’t to keep a good business reputation. Actually, the products can be repurposed and sold again to make profits. Again the returned products can have small defects which can easily be repaired and the products resold.
For example, mobile phones and computers are often refurbished and returned back to the market at a lower price. The price sold helps cover the reverse logistics cost.
- Better Product Life Cycle.
Companies are getting value for reverse logistics management overtime. For example, refurbished laptops and iPhones increase the product’s life cycle and keep the old models of the iPhone in the market even after the production has stopped. However, using the traditional logistics methodologies this couldn’t be possible.
- Business Risk Management.
The advantages of reverse logistics to the company can’t be downplayed. Customers will return products because they are not satisfied with the delivery. At this point a customer has the right to sue the company and in return the company could end up losing thousands of dollars. However, after returning the products back to the company this lawsuit risk is eliminated.
In summary, the pros of reverse logistics to a company outweighs the cons by far. Reverse logistics has gained traction in the recent years of online retailing. It helps increase customer satisfaction, trust and retention.
If you enjoyed reading the reverse logistics guide, please don’t hesitate to leave a comment below!