What is reverse logistics and why should businesses pay attention to it?


What is reverse logistics and why should businesses pay attention to it?

When it comes to managing logistics, most of the businesses think that it involves managing orders, assigning them to the right vehicle, tracking them in real-time, and delivering them to the customer’s location. What most of the businesses underrate is reverse logistics. Logistics management ensures streamlined delivery of goods from the warehouse/hub to the customer’s place, whereas reverse logistics deals with the processes performed to bring the product from the customer and deliver it back to the warehouse or the hub.

To understand reverse logistics, let’s take an example. Your customer has ordered a “shirt” from your online store and has received it on the given time. Upon receiving, he finds a problem like- the size of the shirt is too large or too small, the shirt is defective, the color is different from what he has ordered, or any other problem. Now, what will he do? He would raise a return request. As soon as your logistics management system receives the return request, it would assign a driver for the product pickup. Now, the entire process that the driver follows to pick up the product and sending it back to the warehouse falls under reverse logistics.

Now, the retailers offering “home delivery” services need to pay attention to reverse logistics because of the following reasons:

To improve customer experience

Offering free delivery and next-day or same-day delivery plays a significant role in achieving customer satisfaction. However, you cannot forget to pay attention to reverse logistics. Where the former ensures customers get the ordered product at the right time, the latter deals with returns and exchange for the product that didn’t meet customers’ expectations. It is obvious that a customer would prefer to purchase products from a retailer where they can be sure that the product would be returned or exchanged without any hassle or without taking too much time. Therefore, it is one of the key points in delivering an exceptional customer experience.

To manage the increasing rate of return

Be it offline or online, providing the option for product return/exchange has become a necessity to stand out in the cutting-throat competition. In fact, it is time to offer “buy anywhere, return anywhere” service. On one side, this service is helping in achieving customer satisfaction. On the other hand, it has increased the rate of returns. And to manage this rapidly increasing rate, a business needs to focus on their reverse logistics.

To make your product available for the next purchase

A customer raises a return request because the “shirt” he received was not a proper fit or simply say, didn’t meet his expectations. But, you have to make the product available for the other customers. Working efficiently on reverse logistics would ensure that it reaches back to the warehouse as soon as possible so that other customers can buy it.

How can any business reduce the rate of return to origin?

Since huge money is incurred in managing returns, it is advised to choose measures that can help you minimize the rate of returns. You can choose logistics management software to automate your logistics operations and ensure on-time deliveries. Moreover, plan and optimize the routes efficiently to make more deliveries per vehicle. Another thing you can do is to provide delivery-related preferences like reschedule deliveries, track consignment in real-time, and time slot selection, which would increase the chances of the first-attempt delivery and reduce the rate of return to origin.

How can businesses manage reverse logistics?

To manage the same, you can integrate logistics management software into your business. Most of such software, such as the one provide by Shipsy, come up with reverse logistics management along with the following features:

  • Integration with your existing ERP
  • Smart order allocation
  • Real-time tracking
  • Dedicated app for the drivers to check new pickup requests and manage existing ones
  • Digitized proof of delivery collection
  • Reschedule delivery feature for the customers
  • Share delivery feedback

Get a customized logistics management system for your business today! 


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