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What is Reverse Logistics? How it Works.

There is no product that everyone will like, and some people buy products and later find out they don’t like it, and as a company selling that product, it can sometimes be difficult to make money out of a returned product. This is were reverse logistics come in, which begs the question:

What is Reverse Logistics?

Reverse logistics is a strategy many companies put in place that is able to make money out of returned products, be it because it’s a defective model or they simply decided they don’t like it. This involves the company or a hired 3rd party reviewing the returned product for the issue that caused the return and fixing the product appropriately for sale elsewhere. This would therefore make reverse logistics an extension of the supply chain, coming after ‘delivery’.

Why Should You Use It?

Money from Defective Products

The main pull for reverse logistics is the money you can make from otherwise worthless products that you spend money on getting for no reward. This lets you get better value out of your products, especially for more expensive ones, as you don’t have to worry about what happens if they return it defective.

Better Public Image

Much of a company is spread through word of mouth, so when people see that you don’t help with products that aren’t sufficient, people won’t be very fond of you anymore. With reverse logistics, that problem doesn’t exist as you can have much better customer satisfaction. 

More Information About the Customers

For reverse logistics to work, you have to know why your customers don’t want the product, so over time you’re able to learn what people dislike about your product. Once you’ve done reverse logistics for a while, you’re able to piece together what people commonly dislike so you can make edits to the overall product for everyone to improve customer satisfaction and therefore sales.

How Can You Use Reverse Logistics?

The process of reverse logistics starts, as mentioned prior, after the ‘delivery’ phase of the supply chain, so instead of stopping monitoring customer satisfaction at this point it’s important to keep monitoring their opinions. This means you can keep on top of problems people are experiencing so you can follow through with reverse logistics. Once the product is deemed good enough by the customer, you then move onto doing the reverse logistics. At this point, you have a couple options depending on how bad the returned product is. You could dispose of the product properly if it’s unfixable, but if you can it’s better to try to fix or repurpose the product to profit off of it. If you’re able to or a 3rd party is able to, repairs are likely a better option, but sometimes it’s best to repurpose your returned product into something else to sell on for some extra money.

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