For most e-commerce companies, the ability to quickly restock returned items is challenging. Therefore, companies today are viewing restocking optimisation more strategically than ever before. This is partly due to the fact that the global economy is putting pressure on companies to find new sources of profitable revenue.

E-tailers are sometimes unaware of the impact returns management and optimised restocking processes can have on their customers, their resources or even their bottom line. According to a 2010 Aberdeen Group study, the average manufacturer will spend 9% to 15% of total revenue on returns.

At the same time, variations in product prices constantly change the threshold at which it is worthwhile to spend additional resources to recoup value from a returned product. However, when effectively managed, automated returns handling and restocking can enable organisations to potentially find hidden profits, improve customer satisfaction and minimise liabilities. E-commerce retailers stand to benefit significantly if their reverse logistics functions operate quickly and effectively and include a smooth return flow. Products that are returned quickly can be re-sold, and e-retailers avoid having to list inventory as out of stock, thereby improving their ability to manage supply and demand. According to the Aberdeen study, improving reverse logistics can help a company increase its revenue up to 5% of total sales.

New rules, new ways
Some countries are now adopting standard distance-selling rules. For example, the European parliament and European council adopted the EU Consumer Rights Directive in 2011. On June 13, 2014, the law became effective and applicable in the members states. The directive includes a provision requiring a uniform return period of 14 days after goods receipt, wherein consumers may return purchases without any explanation. As more countries explore standardised distance-selling rules, the need for returns to be processed and products to be put back into stock as soon as possible becomes more critical. In China, as well as a few others countries, some package delivery carriers will actually wait while customers try on their orders and collect any unwanted merchandise for immediate return and re-stock.

Improving the process
Fulfillment providers offer different solutions to help e-tailers optimise their return flow. Returns handling can be optimised by staging a quality inspection at the receiving dock to make restocking decisions and to return products back to inventory as quickly as possible. Most e-tailers place returns into one of two classifications: either unopened, booked back in and returned to stock – or opened and checked for damages or faults in quality control/product testing. Following testing, those products are then either put back into stock, destroyed or sent on to a secondary selling platform for discounted sale to the customer. Some e-tailers may also choose to donate returned merchandise to charity.

A warehouse management system can be employed to allow searches for available inventory across the entire network, including ‘in transit’ and ‘on order’. The key is to maintain accurate inventory counts at every stocking location from which fulfillment can occur, as well as understanding what inventory is on its way into those locations and when it will arrive. Armed with that data, the call center operator or e-commerce fulfillment engine can tell the customer exactly what is in stock and when they can expect to receive it.

As e-commerce continues to grow at a rapid pace, maximizing the value of returned products becomes increasingly important. Few players, however, can offer a solution on a global scale. Landmark Global has vast experience helping e-commerce retailers manage reverse logistics. We can provide a solution that is 100% free to the end consumer if needed, or a solution wherein the end consumer can return the product to a domestic warehouse. Contact our teams today to find out more about how we can help you manage returns and the restocking time challenge.

 

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