Skip to main content

Retail product returns can make a big impact on your bottom line. In fact, these returns account for an estimated $165 million in losses per $1 billion in sales.1 Without a proper reverse logistics strategy, your business could lose out on profits simply for not being prepared. But don't worry — leading third-party logistics providers have the tools, resources and support you need to create an ideal reverse logistics strategy. In this article, we'll walk you through the basics of reverse logistics and seven steps you'll need to follow to create your own reverse logistics strategy.

An Overview of Reverse Logistics Management

Reverse logistics encompasses any reuptake, recycling, refurbishing and redistribution of goods. From the intake of returned items to the repurposing or reintroducing of those goods back into the marketplace, a solid reverse logistics management strategy can help your business maximize the value of returned products regardless of their condition.

Reverse logistics encompasses:

  • Return shipping of products
  • Product recalls
  • Reselling of returned items
  • Repairing or refurbishing items
  • Remanufacturing items to reuse the raw materials
  • Recycling products that cannot be reused

What do reverse logistics providers offer?

Leading reverse logistics providers offer a comprehensive view and holistic approach to supply chain optimization. From the intake of raw materials to the distribution of returned goods back into the marketplace, a quality reverse logistics provider will help you with:

  • Scalability and flexibility within your supply chain
  • Deep industry and geographical knowledge and expertise
  • Transparency into the entire product life cycle
  • Distribution and refurbishment center management
  • Data integration and web-based technology

How will 3PL reverse logistics help my business?

Reverse logistics management from a trusted 3PL can transform the way your business operates. Optimizing your reverse supply chain can help you save money, improve operations, and so much more.

Benefits of 3PL reverse logistics management include:

  • Reduced administrative, transportation and aftermarket support costs
  • Increased efficiency
  • Increased service market share
  • Higher achievement of sustainability goals
  • Greater customer service and higher retention levels
  • A synchronized supply chain to include forward logistics, inbound logistics, and reverse logistics
  • Transparency in supply chain operations across your network
  • Automatic consolidation of data from partners and systems

7 Steps to Implement a Reverse Logistics Process and How a 3PL Can Help

Looking to implement a reverse logistics process? Follow these steps to create a solid strategy. And make sure to partner with a reverse supply chain expert to ensure that your supply chain optimization efforts are as efficient as possible.

1. Develop and communicate a returns policy.

A reverse logistics process always starts with a clearly communicated returns policy. Returns happen, there's no way around it. Set yourself up for success by crafting and putting into place a clear-cut process for returns. Then make sure that your process is clearly stated on your website or by your sales representatives. Your customers should be in the loop in order to streamline the process and avoid any potentially upset clientele.

2. Collect and analyze returns data.

After you've implemented your new returns process, it's imperative to start collecting and analyzing data so that you both have an idea of where your profit benchmarks should be and also inform your future decisions to maximize efficiency. Make sure to collect and compile all data points so that you can effectively audit your process and continuously improve your supply chain.

3. Create an area for handling returns.

One quick way to optimize your reverse logistics process is to section off a specific area to handle all returns. Not only will you save time when processing returns, but you will also save yourself and your employees energy by having all returns in one centralized location. No room to designate a set returns area? No problem! Certain 3PLs offer warehousing solutions to help you make the most of your space.

4. Set up inbound shipping logistics for transporting products for returns, refurbishing and other reverse logistics tasks.

Once you have a returns plan in action, complete with data recording and a designated work area, you'll want to take a look at how your returns make their way back to you and plan for what will happen to them once they arrive. Working with a 3PL reverse logistics expert can help you find the best prices and services to fit your unique needs and help you maximize your reverse supply chain processes.

5. Establish a working process.

Determining what happens to your returns can make or break your reverse logistics efficiency. Recycling goods with life left in them or refurbishing goods with a low profit margin can leave you with unnecessary losses. Work with a trusted 3PL partner to decide what criteria each return must match to be resold, refurbished or recycled. Then create a process to follow through.

6. Determine next steps based on product usability.

Once you've decided which returned product goes where, you'll need to create a process to determine how goods are resold, refurbished or recycled. Consider your unique needs and limitations. There is no one-size-fits-all process, so be sure to work with an industry professional to ensure that you're making the most of your own capabilities.

7. Implement the steps to complete a successful returns process.

Now that you've created a solid returns strategy, it's time to put your optimized reverse logistics process into action. Remember that optimization is not a one-time occurrence. Continue collecting data and revamping your process to fit your needs as you scale and grow. A 3PL can also help implement the reverse logistics strategy to ensure all steps are working properly

Get Best-in-Class Supply Chain Optimization from GlobalTranz

Having an effective reverse logistics process in place can help companies become more efficient and profitable, especially during times of growth. Reverse logistics management, however, involves much nuance and industry know-how that companies may not have the time or resources to do well. That's where we come in. At GlobalTranz, we have the insights and expertise you need to identify areas for improvement and maximize efficiencies in your supply chain from start to finish. Reach out today to talk to an expert and see how GlobalTranz can transform your reverse supply chain.

1 Dopson, Elise, "Ecommerce Returns: Expert Guide to Best Practices (2024)." September 6, 2023. Shopify.