June 13, 2022

How to Improve Your Company’s Returns Management

How to Improve Your Company’s Returns Management

E-commerce returns have long been a thorn in the side of e-commerce fulfillment. With most of the focus on what’s going out the door, online sellers have traditionally paid little attention to what came back in. Now, however, customers demand that the retail brands they support have a free and easy returns process for goods purchased online.

To that end, it’s up to online sellers to integrate returns management capabilities seamlessly into fulfillment operations. However, mastering returns may be easier said than done, with consumers expected to return more than $761 billion in goods bought online in 2022.

The Customer Experience Comes First

E-commerce was already on its way up before the pandemic, but COVID-19 normalized online shopping for millions more consumers. Though retail stores are open again, many people still enjoy the convenience of buying the things they want and need online. Since consumers have numerous brands to choose from, the customer experience has become a top concern for e-commerce and omnichannel retailers. A quality customer experience can set a retail brand apart from its competitors.

As part of that experience, consumers need to know that they will experience minimal hassle when attempting to return or replace something they purchased online. Unfortunately, even one difficult return can result in a loss of repeat business. A 2021 survey from Klarna revealed that 84% of online shoppers would abandon a retailer after a single bad returns experience.

Taking Control of E-commerce Returns Management With a 3PL

Partnering with a 3PL can help get e-commerce returns under control for many online sellers. Here are some signs you might need to work with a logistics partner:

  • It takes more than 72 hours to process a return and issue a refund
  • You don’t have enough staff to dedicate labor to returns processing
  • You didn’t set up your warehouse to receive high volumes of individual packages
  • You get a lot of customer service complaints about returns
  • You can’t scale up to meet higher returns volumes after peak sales periods
  • You have unsellable returned inventory taking up valuable space

Be upfront about your returns management needs when you enter into a conversation with a new fulfillment 3PL. Not every 3PL that offers order fulfillment services will excel at reverse logistics, so it’s important that they understand your needs and you understand their capabilities. Once you’ve found the right partner, here are some ways they can streamline your returns management processes.

  • Dedicated returns space. A good 3PL will have an area set aside to facilitate quick and orderly processing of returned items. This space keeps returned items separate from other inventory until they’ve undergone evaluation.
  • Technology. Logistics partners often use technology that automatically scans returns into the system once they get received. This capability allows you to issue refunds faster and keep customers happy. Your 3PL can also gather data to help you identify trends in returns, such as repeated types of damage or defective goods.
  • Cheaper shipping. Customers don’t just want easy returns—they also want them free. Your logistics partner can leverage preferred rates with parcel carriers to lower the cost of return shipping for you.
  • More warehouses. A 3PL can help spread returns across a network of fulfillment centers instead. This capability can help avoid overwhelming any one facility during peak returns periods and will also keep shipping costs down.
  • Scalability. 3PLs excel at scaling up and down with demand. Your logistics partner will be well-equipped to handle the spike in returns that inevitably follows each peak sales period.
  • Labor. Passing the responsibility of fulfillment labor on to a logistics partner can free up your internal human resources and talent management teams to focus on positions that support your core competencies, such as product development and sales.

These are only some of the ways that a fulfillment 3PL can help you regain control of your customer returns. Your logistics will help you identify even more opportunities for improvement specific to your business.

About Phoenix Logistics

Strategic Real Estate. Applied Technology. Tailored Service. Creativity. Flexibility. These fundamentals reflect everything we do at Phoenix Logistics. We provide specialized support in locating and attaining the correct logistics solutions for every client we serve. Most logistic competitors work to win 3PL contracts, and then attempt to secure the real estate to support it. As an affiliate of giant industrial real estate firm Phoenix Investors, we can quickly secure real estate solutions across its portfolio or leverage its market and financial strength to quickly source and acquire real estate to meet our client’s need.

Mr. Frank P. Crivello began his real estate career in 1982, focusing his investments in multifamily, office, industrial, and shopping center developments across the United States. From 1994 to 2008, Mr. Crivello assisted Phoenix Investors in its execution of its then business model of acquiring net lease commercial real estate across the United States. Since 2009, Mr. Crivello has assisted Phoenix Investors in the shift of its core focus to the acquisition of industrial real estate throughout the country.

Given his extensive experience in all aspects of commercial real estate, Mr. Crivello provides strategic and operational input to Phoenix Investors and its affiliated companies.

Mr. Crivello received a B.A., Magna Cum Laude, from Brown University and the London School of Economics, while completing a double major in Economics and Political Science; he is a member of Phi Beta Kappa. Outside of his business interests, Mr. Crivello invests his time, energy, and financial support across a wide net of charitable projects and organizations.

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