Blog Posts 5 Reasons Why a 3PL Should Manage Your Reverse Logistics

Key Takeaways

  • High ecommerce return rates can be challenging for retailers and brands.
  • Third-party logistics providers make the reverse logistics process more efficient and cost-effective.
  • Advantages of outsourcing include access to centralized facilities, flexible resources, robust technology, parcel expertise and quality control.

Poor fit, wrong color, changed mind… Whatever the reason, online shoppers return a significant number of purchases. According to National Retail Federation data, the average rate of returns for ecommerce purchases is 20.8%.

This high return volume puts a heavy burden on retailers and brands. 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.

According to Saddle Creek’s 2022 Ecommerce Fulfillment Trends Report, 79% of retailers and brands offer free returns – up from about 50% in 2020. Another 13% plan to offer free returns within the next 18 months.

Why Should You Consider Outsourcing Returns?

Processing returns can be time-consuming, labor-intensive and costly. To help shoulder the burden, many retailers look to third-party logistics providers. A 3PL can help to streamline the returns process in five key ways:

    1. 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.
    2. 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.
    3. 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.

79% of retailers and brands offer free returns – up from about 50% in 2020. Another 13% plan to offer free returns within the next 18 months.

    1. Parcel management – As demand grows for free returns, it is particularly important to control transportation expenses. 3PLs’ negotiated rates and economies of scale can help to minimize return shipping costs.
    2. 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.