Reverse logistics: how to optimize it for your ecommerce business

52% of European shoppers return an item when they are not satisfied with their order. Treating delivery as the last step of the supply chain is a mistake. Once the customer receives the parcel, they may want to send it back, either to request a replacement or a refund. A super important (and often forgotten) process in ecommerce logistics is reverse logistics.

In this blog, we explain what reverse logistics means and how managing it well can benefit your online store.

What you will find in this blog:

• What is reverse logistics?

• Advantages and disadvantages of reverse logistics

• Types of reverse logistics

• Reverse logistics examples

• How do carriers handle reverse logistics?

• How to implement reverse logistics in your ecommerce business

• Reverse logistics and Sendcloud

What is reverse logistics?

Reverse logistics is the process needed to move products from the customer back to the original warehouse. This process starts the moment the customer wants to make a return. Managing it well lets you offer your customers a unique shopping experience and strengthen their relationship with your online store.

Advantages and disadvantages of reverse logistics

A good reverse logistics strategy will increase customer satisfaction and improve your brand image, but keep in mind that it will also mean higher costs. That is why it is very important to optimize this process as well as possible to offset these new expenses.

Advantages:

• Higher customer satisfaction by offering a better shopping experience

• Time savings thanks to the automation of logistics processes

• Lower logistics costs

• Less workload for the customer service team

• Lower resource consumption

• Respect for the environment

Disadvantages:

• Higher costs caused by introducing new mechanisms into the supply chain

• More incidents: reverse logistics needs to be managed very well to avoid loss of or damage to goods

• More labor needed to manage the supply chain

• Costs not paying off in the case of small returns

Types of reverse logistics

• Returns reverse logistics: the set of processes that ensure a product previously bought by the customer is returned, goes back into stock and is available to customers again.

• Waste reverse logistics: the set of processes that turn materials from used products into raw materials for creating new products, with the aim of reducing environmental impact.

Examples of reverse logistics

When we talk about reverse logistics, we don't only mean a standard return from a customer who is not satisfied with their product. This process takes place at different steps of the supply chain. Here are some examples:

• Refurbishment: putting a product that a customer has returned back up for sale.

• Managing returns of products bought by customers.

• Carrier errors in the delivery process that require a return

• Handling the product once it arrives at the warehouse

• Managing materials for later reuse

• Repairing defective products

• Component recovery: repairing parts of a product that are no longer usable

How to implement reverse logistics in your ecommerce business

1. Define your returns policy: make sure your return conditions and requirements are defined clearly, concisely and visibly for your customers. Add everything you think is relevant and that answers your customers' possible questions. This will help you reduce the workload of your customer service department.

2. Have a system for managing return notifications: you will need a software system that lets you manage return information. It should include the customer's details, the reason for the return and the details and condition of the product being returned.

3. Make sure your carriers offer this service. Be clear on each carrier's return conditions and inform the customer about them. To make sure you cover your customers' needs, we recommend using a multi-carrier strategy that adapts to the needs of both your ecommerce business and your customer.

4. Carry out a quality check: check the condition of the products that arrive at the warehouse. Decide on the return based on the condition of the product and the terms of your returns policy.

5. Send your customer the appropriate compensation: the conditions for a refund, exchange or repair should be set out in your returns policy.

Reverse logistics is a crucial part of your company's success. Manage it with the same care and attention you give your outbound shipments, and things will go well from start to finish!

How do carriers handle reverse logistics?

Reverse logistics with Correos

Returns are an essential part of your ecommerce logistics process. Managing them well will improve your brand image and ensure your success with your customers.

Correos offers different options that let you control your ecommerce returns and make sure your customers don't have to worry about a thing.

• Paq Retorno: Hassle-free domestic returns (mainland Spain and the Balearic Islands).

• City Paq

For returns with the CityPaq shipping method, your customer needs to go to the Correos app/website and indicate that they have a parcel to return. Next, they enter the code (which must be pre-registered L3 LI) and the Correos app/website will assign them a locker to put the parcel in, and that's it.

Reverse logistics at Amazon

Amazon's reverse logistics process lets customers return products within 30 days of receiving them, as long as they follow its returns policies. The company has an excellent track record when it comes to after-sales service and very efficient reverse logistics management.

Amazon's returns policy allows products to be returned if the customer is not satisfied with their purchase for up to 30 days from the date the product was received.

How to optimize reverse logistics for your ecommerce business

It is very important to have everything under control in your ecommerce reverse logistics process. The smallest error will disrupt the supply chain, and this will hurt the operation and reputation of your ecommerce business. Before you start this process, keep the following in mind:

• Returns policy: clear, concise and visible on your website, and easy for your customers to access.

• Customer service: offer good customer service so your customers can resolve any questions about returns.

• Shipping costs: specify in your returns policy who will cover the shipping costs.

• Damage control: make sure that, once the product is received, it does not need repairs before it is put back up for sale.

Automate your returns with Sendcloud

68% of European shoppers check the returns policy before making a purchase. Offer an easy returns process for the customer and handle returns without any problems.

With Sendcloud, you get an automated returns portal tailored to your returns policy. It's very easy:

• Simplify your logistics process with return rules: Forget about spreadsheets. Ship with specific return methods for specific countries and apply different return fees depending on the return reason.

• Offer free returns or charge a fee automatically: Let customers pay for their own returns. Your customers can choose their preferred payment method and receive the return label once the process is complete.

• Keep your customers informed:Update your customers on the status of their returns with automated tracking emails.

• See your returns trends with Analytics: Make data-driven decisions thanks to the Analytics dashboard. Analyze data on the number of returns received, return reasons and the most used methods.

• Personalized returns portal: Add your brand to your returns portal to create an exclusive customer experience. Include important links, such as to your store or an FAQ page, and put your contact details right where your customers expect to find them.

An easy-to-use returns process will keep your customers satisfied, start optimizing your returns with Sendcloud now.

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