Blog Posts 5 Reasons Why a 3PL Should Manage Your Reverse Logistics
Poor fit, wrong color, changed mind… Whatever the reason, the fact is that online retailing has an extraordinarily high volume of returns. In 2017, the e-commerce return rate was 18 to 25 percent – roughly three times that of brick-and-mortar stores, RILA data shows.
This high return volume puts a heavy burden on retailers and ecommerce companies. Not only must they coordinate the reverse logistics for all these products, they must offer (and deliver on) hassle-free return policies if they want to keep customers coming back. More than a third (35%) of web shoppers say that “ease of returns” is a top factor that influences their buying decision, according to RIS News’ Shopper Insight 360 report.
Processing returns can be time-consuming, labor-intensive and costly. To help shoulder the burden, many retailers look to third-party logistics providers (3PLs). In fact, in a recent DC Velocity study, 40 percent of retailers report using a 3PL to handle returns.
This is Why You Should Consider Outsourcing Returns
What are the advantages of outsourcing? A 3PL can help to streamline the returns process in five key ways.
- Convenient facilities – With a strategic network of locations, 3PLs can offer a convenient, centralized hub for handling returns. With facilities close to the end customer, they can process returns and get salable products back into stock faster.
- Scalable resources – Return rates often increase or spike. A third-party provider has flexible space and staffing to scale to handle fluctuations in return volume.
- Robust technology – With a sophisticated order management system (OMS), a 3PL can manage returns and get products back in inventory more efficiently and cost-effectively.
- Parcel management – As demand grows for free returns, it is particularly important to control transportation expenses. 3PL’s negotiated rates with parcel and freight providers can help to minimize return shipping costs.
- Quality control – An experienced provider can carefully inspect incoming products and determine if they should be put back in inventory. They may also have the ability to refurbish or repackage items if necessary.
Since reverse logistics is such an important aspect of the ecommerce sales cycle with the potential for significant business impact, it makes sense to assign this function to the optimal resource. That just may be your 3PL.