Why It’s Worth Thinking About Reverse Logistics If You Run A Business



Reverse logistics may not be a buzzword in the world of business, but considering how e-commerce is rapidly changing the way we sell and purchase products, no business can have its back turned on reverse logistics for long.

Reverse logistics is defined as the processes and practices which have been set up to organise the return of a product from the point of sale to the manufacturer in order to recycle, repair or dispose of it. In other words, it’s what happens when a customer returns a product.

The following are just some of the reasons why understanding reverse logistics is absolutely vital if you run a product-based business:


Increased Asset Utilisation

The goal of any efficient business operation is to do more with less. A well thought-out reverse logistics system will make use of any forward logistics assets and systems already in place, to support the reverse logistics operations. Setting up your logistics team to perform the dual functions of forward and reverse logistics will reduce your spending on assets and make the operations of your company more efficient.


Avoid Trouble

Neglecting reverse logistics and leaving it up to chance, can damage your reputation, eat into your company’s profits, make your supply chain system inefficient and at its worst, can be the reason a company is forced to cease trading.


Increases Happiness of Customers

Customers can only be loyal to your company if they are happy with your services. In today’s digital age, placing orders for products online and receiving them on your doorstep at the time expected, in excellent condition, has become every customer’s basic expectation. You can set your business apart from your competition by providing ‘no-hassle’ returns which many customers are already demanding from their online shopping platforms. Even though reverse logistics requires you to spend money, done well it can help you win the loyalty of customers which will almost certainly increase your revenue and help you offset the costs of running the operations. Online retailers such as Amazon, which have made it super easy for customers to return goods, have been the ones who have achieved the greatest success in recent years.


Ecological Impact

From the perspective of environmental sustainability and corporate responsibility, it is more important now than ever to put in place sustainable practices which have a positive impact on the environment. With companies increasingly being forced to take steps to reduce their carbon footprint both in response to consumer pressure, and legislative pressure, one big area where there is ample room for improvement is often reverse logistics. Increasing the efficiency of this aspect of your supply chain will reduce the burden on precious resources and reduce your carbon footprint. This too can enhance your reputation with customers increasingly looking for ways to support companies which prioritise the environment.



Better Return on Investment

As you will know if you are in business, maintaining an inventory costs money. The more you invest into your inventory, the more cashflow you have locked up in that inventory. However, by increasing the efficiency of your goods replacement system and speeding up the process of returning products, you can reduce your inventory requirements. In this way, an efficient reverse logistics system helps you increase your ROI.


By fine-tuning your reverse logistics you can lower your costs, improve your cash flow, boost your customer relations, boost your environmental credentials, and also attract forward-thinking talent to your company. It’s worth taking the time to think about the systems you have in place for managing your reverse logistics.



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