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Monthly roundup of top stories in e-commerce fulfillment and warehousing.

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Retail
Manufacturing
E-commerce
Schedule and receive shipments
Schedule shipments based on inventory needs and storage capacity. Receive shipments at the warehouse or store.
Schedule shipments based on production requirements and warehouse capacity. Receive shipments at the warehouse.
Schedule shipments based on inventory needs and warehouse capacity. Receive shipments at the warehouse.
Verify documentation
Check shipment documentation, including the packing list, invoice, and Bill of Lading (BOL).
Check shipment documentation, including the packing list, invoice, BOL, and material certifications.
Check shipment documentation, including the packing list, invoice, and BOL.
Inspect the shipment for damage
Visually inspect the shipment for any visible damage or discrepancies.
Visually inspect the shipment for any visible damage or discrepancies.
Visually inspect the shipment for any visible damage or discrepancies.
Perform quality control (QC)
Conduct QC based on retail standards (e.g., product appearance, packaging quality).
Conduct QC based on manufacturing standards (e.g., material specifications, safety compliance).
Conduct QC based on e-commerce standards (e.g., product appearance, packaging quality).
Record and update inventory
Update inventory records with new stock information.
Update inventory records with raw material, components, or finished goods information.
Update inventory records with new stock information.
Sort and segregate products
Sort products by category, department, or store location.
Sort products by production line, work center, or storage location.
Sort products by category, SKU, or storage location.
Store products in designated locations
Place products on shelves or in storage areas designated for each product category.
Store raw materials, components, or finished goods in designated storage locations.
Store products in designated storage locations based on SKU, size, or category.
Update Warehouse Management System (WMS)
Update WMS with product location, quantity, and status.
Update WMS with material, component, or finished goods location, quantity, and status.
Update WMS with product location, quantity, and status.
Communicate with stakeholders
Inform store associates, buyers, and management about new inventory arrivals.
Inform production planners, procurement, and management about material or component availability.
Inform order fulfillment, customer service, and management about new inventory arrivals.
Communicate with stakeholders
Inform store associates, buyers, and management about new inventory arrivals.
Inform store associates, buyers, and management about new inventory arrivals.
Inform store associates, buyers, and management about new inventory arrivals.
System
Key Points
Use Cases
Warehouse Management System (WMS)
- Centralized tracking and optimization of inventory levels.
- Processing orders, allocation, picking, packing, and shipping.
- Managing labor, equipment, and storage space.
- Monitoring inventory, order status, stock levels, and performance metrics.
- E-commerce fulfillment
- Retail distribution
- Inventory management
- Order accuracy and visibility
- Resource optimization
Warehouse Control System (WCS)
- Efficient coordination and control of material handling equipment.
- Integration with advanced automation systems for smooth operation.
- Optimizing equipment usage and status.
- Automated warehouses
- High-throughput environments
- Conveyor and sortation systems
- Robotics and AS/RS integration
Warehouse Execution System (WES)
- Orchestrating order fulfillment processes, and optimizing workflows.
- Assigning tasks, managing sequences, and resource allocation.
- Managing multiple processes, orders, and constraints.
- E-commerce with varied order profiles
- Multi-order picking and sequencing
- Cross-docking and sorting
- Complex order fulfillment
Basis
Fulfilled by Amazon
Walmart Fulfillment Services
Customer Base
Global reach with millions of customers
U.S.-based customer base
Storage and Fulfillment Fees
Varies based on product size, weight, and storage duration
It is based on product size, weight, and storage duration
Product Categories
Diverse range of categories
Focused on specific categories, emphasis on alignment with Walmart's offerings
Shipping Speed
Prime-eligible for fast shipping
Two Day shipping available
Returns Handling
Amazon manages returns on your behalf
Walmart handles returns for WFS products
Geography focus
Offers international shipping
Primarily serves the U.S. market
Monthly Fees
$39.99/month for professional plan
None
Fulfillment Service Fee
Starts at $3.22
Starts at $3.45
Peak Season Fees
Additional peak season fees apply from Oct 15, 2023, to Jan 14, 2024
Holiday Peak Fulfillment Fee applies from October to January
No. of Fulfillment Centers
185+ globally and 110 in the U.S.
31
Product Labeling
Provides shipping labels
Does not provide
Integration with Other Sales Channels
Integrates with multiple e-commerce platforms
Primarily integrates with Walmart's platform
Marketing and Promotion
Access to Amazon advertising
Access to Walmart's advertising platform
Category
Cross-docking
Dropshipping
Inventory
Products are briefly held at a warehouse or distribution center for sorting and consolidation
The retailer holds no inventory; products are shipped directly from the supplier to the customer
Fulfillment
The retailer or a third-party logistics provider (3PL) manages the entire fulfillment process
The supplier handles order fulfillment, including shipping and customer service
Scalability
Ideal for businesses with high inventory turnover rates, such as retail chains, e-commerce companies, and industries dealing with perishable goods or time-sensitive products. Examples include Walmart, Amazon, and companies in the food and beverage sector.
This model suits businesses looking to minimize upfront investment and operational overhead, such as small to mid-sized e-commerce retailers, niche product sellers, and companies that want to offer a wide range of products without holding inventory. Examples include online fashion retailers and specialty product stores.
Feature
3PL
Dropshipping
Inventory Ownership
Businesses using 3PL services maintain ownership of their inventory. The inventory is stored in the 3PL provider's warehouse, but the business owns the stock and is responsible for purchasing and managing inventory levels
In dropshipping, the retailer does not own or stock the inventory. Instead, products are sourced from suppliers who own the inventory and fulfill orders directly to customers on behalf of the retailer
Fulfillment Control
Moderate to high control over processes, including customization options.
Limited control, as the supplier handles packing and shipping.
Upfront Costs
Utilizing 3PL services requires an upfront investment in inventory, as well as potential setup fees for integrating with the 3PL's systems.
Very low upfront costs, with most dropshippers offering a pay-as-you-go model.
Scalability
Highly scalable, 3PLs can accommodate growth in volume and complexity.
Scalable, but potential limits are based on supplier capacity and stock availability.
Risk Management
With 3PL providers, businesses have a shared risk model. 3PLs mitigate logistics risks, but you retain some liability
Lower financial risk, but higher risk of supplier issues impacting customer experience.
Process
Role in Order Fulfillment

Receiving

The receiving stage involves receiving inventory from suppliers, inspecting goods, sorting, and storing them properly. For brick-and-mortar stores, this often involves preparing floor stocks. In contrast, e-commerce requires items to be ready for individual picking and packing, while omnichannel businesses must cater to both.

Inventory Management

Physical stores might do periodic stock checks, whereas e-commerce and omnichannel businesses typically rely on real-time inventory tracking systems to maintain accurate inventory levels and prevent stockouts and overstocking.

Order Processing

In e-commerce and omnichannel retailing, this involves warehouse workers picking the product from storage, packing it for shipment, and then moving it to the shipping station.

Shipping

E-commerce and omnichannel retailers must select the appropriate courier and service level, print shipping labels, and manage the order fulfillment logistics of getting the package to the end customer. Physical retailers, on the other hand, don't ship directly to customers, but they might transfer stock between store locations.

Returns Processing

E-commerce often sees higher return rates than physical stores and involves receiving returned items, checking them, restocking, or disposing. Omnichannel retailing adds complexity, as returns might come in from any channel, making it more challenging to handle returns efficiently and accurately.

Customer Service

Throughout the fulfillment cycle, businesses need to provide customer support. While physical stores handle this in person, e-commerce support handles inquiries, complaints, and returns, often across multiple digital channels.
Benefit
Consideration
Cost-effectiveness of fulfillment operations
3PLs can offer economies of scale that might be hard to achieve in-house.
Expertise and experience
3PLs bring specialized knowledge and experience in logistics and supply chain management, which can greatly benefit companies without this expertise.
Scalability for all seasons
3PLs allow businesses to scale and adjust their fulfillment operations needs based on demand fluctuations — without significant investment.
Better geographic reach
A 3PL may provide a wider distribution network, enabling faster shipping times to a broader customer base.
Type
The Function of the Warehouse Label

Floor/Location Labels

These labels demarcate different areas or locations within the warehouse, such as aisles, rows, columns, shelves, and bins. Warehouse workers use these labels to navigate and find the right storage location quickly and accurately. Sometimes, you can also scan them to record the movement of goods in and out of these locations. Floor labels are usually durable to withstand traffic and wear.

Rack Labels

Rack labels are attached to storage racks and are used to identify individual locations within the rack where items are stored. These can be freezer-grade labels, magnet-backed, ultra-durable labels, multilevel labels, or color-coded. They allow for precise control over inventory location and facilitate efficient picking. In large warehouses, rack labels often include barcode labels or other scannable codes that can be read by handheld devices or automated systems.

Tote and Bin Labels

Totes and bins are used to group items for storage or transport within the warehouse. Labeling these containers allows for easy tracking of their contents, even if the individual items within are not directly visible. Accurate warehouse labels ensure the correct items are picked for orders, and that products are put away in the correct location after being received or returned.

Station and Dock Labels

In a busy warehouse, there are likely to be various stations where specific tasks are carried out, such as receiving, packing, sorting, or kitting. Similarly, there may be multiple loading docks for inbound and outbound shipments. Labeling these areas helps to direct workers and goods to the right place, improving efficiency and reducing errors. For example, when a truck arrives, it can be directed to the correct dock based on the labels.

Inventory Labels

Inventory labels are used at all stages of the inventory's lifecycle, from receiving to shipping. They usually contain information about the product, such as SKU, description, quantity, lot number, and expiration date. They can also include tracking codes like barcode labels or RFID tags. The format and content of inventory labels may vary based on the form factor of the inventory. For example, a warehouse pallet label might include a summary of all items on the pallet, while an item label would have information about that specific item.
Type
The Function of the Warehouse Label

Floor/Location Labels

These labels demarcate different areas or locations within the warehouse, such as aisles, rows, columns, shelves, and bins. Warehouse workers use these labels to navigate and find the right storage location quickly and accurately. Sometimes, you can also scan them to record the movement of goods in and out of these locations. Floor labels are usually durable to withstand traffic and wear.

Rack Labels

Rack labels are attached to storage racks and are used to identify individual locations within the rack where items are stored. These can be freezer-grade labels, magnet-backed, ultra-durable labels, multilevel labels, or color-coded. They allow for precise control over inventory location and facilitate efficient picking. In large warehouses, rack labels often include barcode labels or other scannable codes that can be read by handheld devices or automated systems.

Tote and Bin Labels

Totes and bins are used to group items for storage or transport within the warehouse. Labeling these containers allows for easy tracking of their contents, even if the individual items within are not directly visible. Accurate warehouse labels ensure the correct items are picked for orders, and that products are put away in the correct location after being received or returned.

Station and Dock Labels

In a busy warehouse, there are likely to be various stations where specific tasks are carried out, such as receiving, packing, sorting, or kitting. Similarly, there may be multiple loading docks for inbound and outbound shipments. Labeling these areas helps to direct workers and goods to the right place, improving efficiency and reducing errors. For example, when a truck arrives, it can be directed to the correct dock based on the labels.

Inventory Labels

Inventory labels are used at all stages of the inventory's lifecycle, from receiving to shipping. They usually contain information about the product, such as SKU, description, quantity, lot number, and expiration date. They can also include tracking codes like barcode labels or RFID tags. The format and content of inventory labels may vary based on the form factor of the inventory. For example, a warehouse pallet label might include a summary of all items on the pallet, while an item label would have information about that specific item.
Area of Improvement
Role of Warehouse Efficiency Improvement
Reduced Costs
By minimizing waste and maximizing resource utilization, warehouse efficiency helps lower operational costs associated with storage, labor, and inventory management
Customer Satisfaction
Faster order fulfillment and fewer errors translate to happier customers, boosting loyalty and repeat business
Inventory Management
Efficient warehousing systems employ technology-driven solutions for real-time tracking and accurate inventory management, reducing errors and preventing stockouts
Increased Productivity
Streamlined processes empower your team to work smarter, not harder, maximizing their output and potential
Competitive Advantage
Warehousing efficiency gives you the edge, allowing you to deliver faster and respond better to customer needs.
Risk Mitigation
Efficient warehousing is better equipped to handle unforeseen disruptions, such as supply chain disruptions or consumer preferences changes, minimizing business continuity risks
Scalability
As businesses expand, efficient warehousing operations provide a scalable foundation, accommodating increased demand and facilitating growth without compromising performance
Warehouse equipment
Contribution to pallet picking efficiency
Forklifts
Warehouse forklifts allow for the fast and safe movement of high-volume, heavy pallets. They allow warehouse pickers to access and reposition pallets stored at various heights and distances.
Pallet jacks
Pallet jacks allow warehouse pickers to pick pallets on a smaller scale. They can access tight spaces where forklifts can’t usually enter.  
Conveyor belts
Conveyor systems transport pallets along a fixed path in the warehouse
Robotic systems
Robotic systems have been gradually decreasing the dependency on manual input for pallet picking. Robots can already use vision systems and advanced algorithms to identify, grasp and pick pallets with speed and precision. 
Wearable Technologies
Smart glasses, wrist-mounted guidance systems, and other wearable technologies are providing warehouse pickers with hands-free access to real-time guided picking insights. Having constant access to this information, be it navigation guidance, inventory data, or pallet location, greatly increases pallet picking accuracy and efficiency.
Automated Guided Vehicles (AGVs)
AGVs can autonomously navigate the warehouse floor using cameras, sensors, or magnetic strips to assist with the pallet picking process. 

E-commerce returns have emerged as an unfortunate side-effect of the rise of online shopping. While retail sales have continued to grow steadily, the National Retail Federation estimates $816 Billion worth of merchandise was returned in 2022. 

Returns and returns fraud have become a part of doing business, and retailers need to tackle the problem head-on with appropriate ecommerce returns management. In this article, we will closely examine the impact of returns on the retail sector and how to approach returns management in ecommerce for maximum profitability.

State of Order Returns: E-commerce Returns Statistics

Order returns are common across retail sales, especially in online commerce. E-commerce returns statistics from 2022 indicate that approximately 63% of shoppers in the U.S. engaged in bracketing, where customers buy multiple sizes or colors of a single item to see which version fits them best and return the rest. 

E-commerce returns management is not just limited to reverse logistics; retailers also need to minimize returns, lost sales, and return fraud.

According to Statista, clothing (26%), bags and accessories (18%), and shoes (18%) are some of the product categories that experience the maximum number of returns. 

E-commerce returns statistics for most returned online purchases by category in the U.S
E-commerce returns statistics for most returned online purchases by category in the U.S. (Source: Statista)

Some of the most common reasons for returning online purchases are:

  • Received the wrong product
  • The item doesn't match the description
  • Received damaged or defective items
  • Experienced buyer's remorse
  • Size or fit issues

According to a study by PowerReviews, item doesn’t fit (70%) is the leading reason for ecommerce returns, closely followed by received damaged or defective items (65%), and the product does not match the description​ (49%).

Coresight Research reveals that the top three reasons for online apparel returns in the past 12 months are issues with size or fit (53%), color (16%), and damage (10%). 

Returns management in ecommerce includes refunding the customer, repackaging the product, restocking, and potential loss if the item can't be resold. The ecommerce returns process can be expensive, and not all returned items can be restocked. Damaged goods or products returned outside of the return window can result in inventory losses. However, a complicated or tedious ecommerce returns process can negatively affect a brand's image and customer loyalty. ecommerce returns statistics from USPS revealed approximately 92% of customers will purchase if the return process is easy.

Today, most customers expect a 30-day return window and free, hassle-free returns. With ecommerce returns management playing a crucial role in informing purchasing decisions, streamlining the returns process is more important than ever, especially during the holiday season and busy periods.

Impact of Returns on Sellers and Merchants

Returns have a cascading effect on a seller's finances and reputation, especially in prominent marketplaces like Amazon and Walmart. Ecommerce returns solutions allow businesses to adopt a proactive approach and identify and remedy the reasons behind order returns.

Cost Perspective

Processing Returns

When a customer initiates a return, customer service representatives must handle the return request, which might involve communication back and forth. On receiving the returned product, warehouse personnel must inspect, sort, and potentially restock the item. 

Apart from the additional labor for direct handling, there's an administrative cost associated with processing refunds, updating inventory, and sometimes, liaising with third-party sellers or suppliers about the returned items.

Shipping Cost

Many ecommerce platforms offer free returns — while this is a competitive move, the seller must bear the return shipping fees, which can be significant, especially for bulky or international returns.

Lost Sales During the Restocking Cycle

When a product is returned, it doesn't instantly become available for another customer. The inspection and restocking time mean the product is out of the sales cycle, potentially leading to missed sales opportunities, especially if it's a high-demand item.

Inventory Disposal Costs/Wastage

Not every returned product can go back on the shelves. If an item is damaged, used, or returned after a considerable period, it might not be fit for resale, leading to wastage. Furthermore, the likelihood of wastage is even higher for perishable items or those with a short shelf life.

Customer Loyalty

While the occasional returns are part and parcel of ecommerce, improper ecommerce returns management can cause a breakdown in customer trust.

Shipping an incorrect or damaged product can raise doubts about a merchant's quality control and order fulfillment processes. Similarly, a complicated ecommerce returns process or delays in processing returns can deter customers, and they might avoid shopping from that merchant in the future to prevent potential hassles.

Transparent communication during the ecommerce returns process, such as acknowledging the receipt of returned goods and consistently updating the refund status, can reassure customers and build trust.

Every returned product due to an error on the merchant's part is a missed opportunity to build trust. With multiple such misses, customers may start perceiving the brand as unreliable.

Marketplace Penalties and Seller Reputation

Marketplaces serve as centralized hubs where merchants and sellers connect with a broad audience of potential customers. These platforms provide sellers with a vast and readily accessible marketplace to showcase their products.

Frequent returns, particularly those arising from issues like damaged, wrong, or misrepresented products, can have far-reaching consequences for sellers on marketplace platforms. Here's a closer look at the potential penalties and charges that can ensue:

  1. Increased Fees: Marketplace platforms often implement fee structures that can be impacted by return rates. When returns become frequent, sellers may find themselves facing higher fees associated with the processing and management of these returns.
  2. Suspension of Selling Privileges: Excessive returns, especially those attributed to seller errors or product quality issues, can trigger severe consequences. Marketplaces may suspend a seller's privileges temporarily or even permanently.
  3. Negative Impact on Reputation: Beyond the immediate financial implications, frequent returns can significantly tarnish a seller's reputation in the marketplace. Unhappy customers often leave negative feedback and ratings, making it harder for the seller to attract new customers and sustain a positive image.
  4. Loss of Visibility: Marketplaces value customer satisfaction, and they often reward sellers with low return rates and high satisfaction scores by granting them greater visibility. Conversely, high return rates can push a seller's listings down in search results, diminishing their product visibility and, consequently, their sales potential.

A Brief Outlook of Marketplace Policies: Amazon and Walmart

Amazon’s Policies and Charges

Amazon typically offers a 30-day return window for most products, setting customer expectations for return eligibility. If a product is returned due to a seller's fault (e.g., shipping the wrong item), Amazon expects the seller to cover the return costs. For sellers using Amazon Fulfilled by Merchant (FBM), there's an administration fee, generally 20% of the refund amount, in case of a return. For Amazon FBA, return processing fees amount to $2.12 to $2.32 per standard item and $2.40 to $3.41 per large standard item. For oversized items, it can go up to $4.19 to $75.08.

Amazon can impose penalties on sellers with high return rates, ranging from increased fees to suspension of selling privileges. Moreover, a high return rate can negatively affect a seller's Buy Box eligibility, reducing their visibility and sales potential on the platform.

Walmart’s Policies and Charges

Walmart provides a generous 90-day return policy for most items. However, third-party sellers on Walmart can set their return policies, provided they meet Walmart's minimum quality standards.

Walmart expects sellers to maintain a specific product quality and order fulfillment standard. Repeated returns can result in penalties ranging from higher commission rates on sales to temporary or permanent suspension from the platform.

Best Practices to Reduce ecommerce Returns

E-commerce returns are widespread, with PowerReviews reporting that approximately 88% of respondents in a study make returns at least occasionally. While returns and return frauds are here to say, stringent ecommerce returns policies can address critical issues to reduce returns as much as possible. Some ecommerce returns best practices are:

Improve Fulfillment Accuracy

An efficient fulfillment process can always reduce the ecommerce return rate. By refining the pick, pack, and ship processes and partnering with reputable carriers, you save on return costs and elevate customer satisfaction. Remember, the aim is to get the order right the first time, every time.

1. Pick Operations

Use barcode scanners to match product codes from the order list and reduce manual selection errors. After a batch of orders has been picked, perform a quick audit to address picking challenges and ensure all items match the order list. 

Designate specific warehouse labeling locations for different products. This oversight minimizes confusion and aids in faster, error-free picking.

2. Pack Operations

Before packing, perform a QC check to verify that the product is in good condition, is the correct variant (size, color, model), and matches the order. Use appropriate packaging materials to prevent in-transit damage. For fragile items, bubble wrap, foam inserts, or padded envelopes can provide added protection. 

Ensure packages, including address and handling instructions, are labeled correctly to reduce delivery errors or mishandling.

3. Ship Operations

Integrate your warehouse management system (WMS) with carrier systems for real-time tracking and accurate shipping estimates. Schedule to ensure timely delivery and avoid situations where customers request cancellations or returns because of unexpected delays.

Partner with reliable shipping carriers that offer insurance. This provides compensation in case of damages and indicates the carrier's commitment to safe deliveries. Periodically review carrier performance to identify patterns of delays or damages and address them directly with the carrier.

Enhance Fraud Prevention

To reduce fraudulent returns and ensure a more sustainable and profitable operation, it’s essential first to understand the fraudulent behavior and malpractice behind return fraud.

Understanding Returns Fraud

  • Wardrobing: This is when customers purchase items, use them briefly (like wearing a dress for a single event), and then return them for a refund. The item, although used, is often returned as "unworn" or "unused."
  • Counterfeit Product Returns: In this scenario, a customer buys an original product, replaces it with a counterfeit or lesser-quality version, and returns the fake product for a refund.
  • False Damage Claims: Some customers claim that a product was damaged upon arrival, prompting a return and refund, even if the product was in perfect condition.

Fraud Prevention Measures

Clearly define what constitutes a valid return

Specify the condition items must be in and the return window. Make sure the return policy is transparent and easily accessible on your website. 

Implement product authentication measures

Attach serial numbers or unique QR codes to ensure the returned product matches the original item sent, preventing counterfeit returns.

Meticulously inspect returned products

Train your returns team to inspect returned products and identify wardrobing and false damage claims. 

Leverage customer data to detect return frauds

Implement a warehouse management system to track customer return patterns. Analytics can help identify serial returners or customers with suspicious return behaviors.

Send proactive alerts to customers

Notify customers when their return behaviors are identified as potential fraud or abuse. In extreme cases, after multiple warnings, it might be necessary to ban customers who frequently exploit the return policy.

Optimize Product Pages

An optimized product page can set clear and accurate expectations and communicate ecommerce returns policies to minimize logistical and financial challenges.

Accurate Product Descriptions: Ensure product descriptions mention material, dimensions, functionality, compatibility, and other relevant details. If certain questions about a product come up frequently, incorporate those answers into the product description. This can reduce the uncertainty that might lead to a return.

High-Quality Images: Offer images of the product from various angles to reduce the chances of customer dissatisfaction after receiving the product.

Size Charts and Guides: Provide clear and standardized size charts, especially for clothing and footwear. Highlight how measurements are taken and mention if a clothing item fits true to size, runs large, or is on the smaller side. Such insights can drastically reduce returns due to size issues.

AR 3D Depictions: Consider using Augmented Reality (AR) to allow customers to virtually "try on" items like glasses, jewelry, or even furniture in their space. This interactive experience sets clear visual expectations. A 3D representation of the product provides a more in-depth look than traditional images.

Clear Returns Policy on Product and Checkout Pages: Clearly state the return policy for individual items on the product and checkout pages. Mentioning the return policy during checkout reinforces this understanding and may prompt a double-check from the customer before finalizing the purchase.

Maintain Competitive Pricing

Not to state the obvious, but competitive pricing isn't just about attracting customers; it's also about retaining them and ensuring their satisfaction post-purchase.

Customers often conduct price comparisons across various platforms before committing to a purchase. Ensuring your products are priced competitively makes customers feel they've made an informed and smart buying decision and prevents buyer's remorse. If a customer discovers the same product at a lower price after making a purchase, buyer's remorse can be a powerful motivator for initiating a return.

A track record of competitive pricing reduces the urge to continually price-shop, making customers more loyal to your brand and less likely to return items. When customers feel they're getting a fair deal, their overall satisfaction with the shopping experience improves and reduces the inclination to return products.

Managing the Reverse Logistics Process

As ecommerce grows, so does the importance of a well-structured and efficient reverse logistics system.  Companies can optimize costs and reinforce a positive brand image by ensuring a seamless return procedure.

Initiating the Return

Many ecommerce carriers offer return services at an extra cost. A return service simplifies the ecommerce returns process for customers and ensures that the returned item reaches the designated location safely and promptly.

Another alternative is enabling the customers to return the product to the specified facility. While it can save costs for the business, it's crucial to provide clear instructions to the customer regarding packaging, labeling, and the return address to ensure the process runs smoothly.

Routing to a Facility

It’s standard procedure to route the returned items to their source location, a central warehouse or distribution center.

Sometimes, it's more cost-effective and efficient to route returns to a nearby warehouse or brick-and-mortar retail store. This approach can optimize inventory distribution, particularly for items in high demand in certain locations, and considerably cut logistics expenses.

Receiving and Quality Control (QC)

Once returns arrive, direct them to a designated station separate from the regular receiving area. This process helps streamline the QC process and prevents potential mix-ups.

It's crucial to have a dedicated team trained for receiving and inspecting returns. They can assess the returned products for any damages, signs of wear and tear, wardrobing, or any other discrepancies that might affect the product's resale value.

Restocking, Disposal, or Vendor Return

If the products are deemed fit for resale after passing QC, they can undergo the standard putaway procedure to be reintroduced into inventory and made available for future orders.

Products found to be damaged or unfit for resale should be marked for disposal. Sometimes, the best course of action might be to return the product to the original vendor, especially if the item has manufacturing defects or issues that fall under vendor warranties.

Add Customer Feedback

Listening to and acting on customer feedback can reduce return rates and build stronger, more trusting relationships with the end customers.

Regular feedback can highlight recurring problems with individual products, such as consistent sizing issues, color discrepancies, manufacturing defects, or misleading product descriptions. Rectifying these can reduce returns due to unmet expectations.

Understanding grievances can lead to adjustments in return policies, balancing business viability and customer satisfaction. Feedback on damaged items can point towards inadequate packaging, prompting a review and upgrade of packaging materials and methods. If customers regularly return items because they arrive later than expected, feedback can push businesses to optimize their shipping and delivery processes.

When customers see their feedback is valued and acted upon, it encourages better engagement with the seller and marketplace platform. Trusting customers are more likely to keep a product and work with customer service on issues instead of opting for a return.

Next Steps

While returns will always be a possibility in retail, ecommerce returns management helps manage the inevitable. Returns and return fraud can cumulatively add to business expenses and significantly affect profitability if left unchecked.  Returns management in ecommerce works to reduce returns and optimize reverse logistics to maintain a balance between profitability and competitive integrity. 

Consider outsourcing your reverse logistics to a third party or integrating an ecommerce returns solution to monitor key warehouse metrics, keep customers in the loop, and prevent fraudulent behavior. Managing the ecommerce returns process well is just as important as accurate order fulfillment in the context of customer trust and engagement.

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