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Why E Commerce Companies Need to Invest More in Reverse Logistics

Dec 4, 2018

What is reverse logistics?

Reverse logistics in ecommerce refers to the return process involved wherein the goods are moved from their point of consumption back to their point of origin. Two key reasons for using reverse logistics in e commerce could be either for disposal or for recapturing value. Making the purchase as well as the return process easy and hassle-free plays an integral part in ensuring customer satisfaction. This consequently results in repeat purchases and loyal customers. To ensure this, several companies are now even hiring third-parties to handle their reverse logistics processes.

Benefits of reverse logistics in e commerce

When it comes to an e commerce business, placing the order is one part of the customer’s encounter with the company and order fulfillment is the other. Online shoppers often don’t shy away from returning products that don’t meet their expectations and making them jump through hoops in order to get their money back on a dissatisfying sale is a great way for e commerce companies to lose their business forever. Here are some of the key benefits of reverse logistics in e commerce:Contact US

Customer retention

In the modern world, having a functional and efficient logistics system is imperative to thrive in the e commerce market. A major drawback of e commerce business is the lack of tangibility of products, and customers often tend to bank on the pictures/videos displayed on the e commerce site. Once the product reaches the customer it might not match the customer’s expectations. One of the key benefits of reverse logistics is that customers would choose the company that offers them the safety net of being able to return products without too much of a fuss.

Return on investment

Facilitating an easy and efficient reverse logistics process is no easy task but investing in such capabilities guarantees a good return on your investment. Benefits of reverse logistics include increased sales substantially. It has been observed that shoppers tend to make an additional purchase when processing a return on a website. While merchants may incur significant costs when implementing this process, the ROI will definitely be immense.

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Strategic advantage

For a business to thrive long-term, it is vital to ensure a good customer experience both pre and post the sale. Having a smooth reverse logistics system plays a huge part in a customer’s experience. If customers face a hard time processing a return, they are more likely to do business with other competitor e commerce companies.

Shareholder value

Reverse logistics in e commerce provide several opportunities for managers to cash in on and deliver maximum returns to the shareholders. Apart from customer satisfaction, keeping the shareholders satisfied is another aspect that managers must focus on.

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