The Benefits of a Reverse Logistics Process

Published on
February 11, 2020

When reverse logistics are implemented properly, it can benefit a business in many ways. What are some of those benefits? Is reverse logistics relevant to all industries?

As more businesses are shifting towards promoting their e-commerce platforms, staying competitive in this environment means that businesses must offer free shipping and “hassle-free” returns. According to Statista, returns delivery costs were estimated to be 381 billion dollars in 2018 and expected to increase to 550 billion dollars by 2020.

Without a reverse logistics process in place, businesses wouldn't be able to manage the growing number of returns. In terms of a disposition strategy, it makes it difficult to determine where a return should be routed towards to maximize the recovery rate.

Thus, a business that has a reverse logistics process in place can gain the following competitive advantages:

Decreased Costs

A reduction in transportation, administrative, and support cost go hand and hand with a strong reverse logistics process. With that, businesses will see an increase in profit margins and supply chain visibility. According to a study conducted by Statista, businesses can expect to see a 36% increase in tangible cost savings and a 33% increase in improved inventory tracking.

Increased Customer Satisfaction

According to Customer Thermometer, 70% of consumers made the choice to support a company that delivers great customer service. Additionally, 52% of consumers say they made an additional purchase because of great customer service as well. Based on these statistics, the way a business handles their returns policy is valuable towards building their brand and reputation.

Reduced Environmental Impact

Eliminating transportation costs helps businesses to achieve higher sustainability efforts. Identifying strategies to reuse, remarket, or recycle returns helps to keep returns from ending up in landfills. According to BBC Earth, returns generate 5 billion pounds of waste every year.

Do you currently have reverse logistics programs in place today? If not, schedule a demo for free today to see how Patturn can help you make better business decisions.