Retailers have seen returns for a long time and used them as a burden on the logistics needed, which is a necessary inconvenience to deal with excess stocks. Managing these logistics (called reverse logistics or reverse supply chains) requires different skills, because most manufacturers only design their infrastructure to distribute products in one way: to market. However, reverse logistics is no longer just a management return. Instead, it is a strategic advantage, reshaping retail and sustainability, and an important part of it Circular economy. Embracing recommended retailers (practice of reselling previously owned or used products) are reducing waste, reducing costs and tapping into secondary markets It is expected to reach US$4.04 trillion by 2034. The only challenge is to master logistics.
Positive opportunity
Revenue is an important customer service experience, but ultimately a disposal task. They can be expensive, frankly a headache. This prompts more companies to want to deal with them more effectively. Because we buy mainly online, we return more. According to IHL Group, OverStock (which includes unsold products, returned items that cannot be sold under new and warranty coverage) Retail business $562 billion. This is just a number, which shows how expensive and wasteful old ways of handling returns are. But it also shows that there is a great opportunity.
Many brands and retailers sit on the remaining products (or accumulations) that can be renovated, marketed, and sold. This turns unnecessary products from debt into profitable income sources, while also providing new life for the product and providing more sustainable shopping options. This is what many of us know is a circular economy. The key here is Infrastructure, It's not that the product itself is round. This is why reverse logistics is the key to making it a reality.
Recommended logistical challenges
A true circular issuance means providing customers with the means to return to a second-hand product, usually in exchange for credit for the next purchase. The product is then renovated and sold to the customer. As a more sustainable option, it provides consumers with an option rather than buying something new. The consumer technology industry has been doing this for some time. Brands like Apple and Samsung can easily “trade” your old devices when buying new ones. It is a smooth experience that brings customers into the ecosystem. It also provides feeding to the secondary market, capturing buyers who may buy cheap equipment from another brand. But it took these brands years to get to that.
Managing reverse logistics is not a simple plug-in activity that requires constant monitoring and improvement. Processing earnings could cost retailers 15% of their revenue. It's expensive, so retailers need to be efficient. This is the reason 75% of retailers plan to invest in reverse logistics automation in 2025there are good reasons. Reverse logistics is growing About 9.4% per year.
Brands need to do some key things or invest in them to get them right. The first is an investment inventory tracking tool. This is crucial for detecting trend discovery patterns and forecasting of secondary markets. Similarly, brands must follow the resale market to predict changes and proactively manage inventory, pricing and supply. The next step is to work with reverse logistics experts in the market. These companies help other brands while still focusing on their core goals. They also tend to understand the regional regulatory complexity and potential legal limitations surrounding refurbished goods, which are crucial when knowing the scale.
Another area that needs to be addressed is frequent sales and discount promotions. This can be a difficult sale for brands that rely on seasonal sales. However, if the consumer’s price is the same as the new one, the refurbished product will not be purchased. To make the circular economy work, and to make investments in reverse logistics justify, brands need to work on structured pricing and certification, high-quality refurbished merchandise to attract new customers who want to spend less.
From burden to breakthrough
All this discussion about reverse logistics investment in support of circular economy is good news for businesses and the planet. Each pre-used, refurbished or reused product for sale means less landfill pressure on natural resources. For example, renovating a smartphone (rather than making a new one) directly saves 64 kg of carbon dioxide, 244 kg of raw materials and nearly 76,000 litres of water. Handling well-rewarded brands can help the environment and create lasting value for their business and customers. Winning the business and the cycle correctly.
James Murdock is co-founder and chief marketing officer of Alchemy, the world's fastest growing cycle technology company. With over 20 years of experience in leading technology marketing and business operations, he is a leader in driving innovative solutions to reduce e-waste and carbon emissions.
