Can Reverse Logistics Help Protect Your Brand?
Every brand on the market has a specific customer base and target niche. Brands are also responsible for protecting their name and image during all phases of their product’s lifecycle – including returns. A weak reverse logistics department opens the door to potential brand loss. A well-written reverse logistics policy and procedure manual can help eliminate concerns. Here are three ways to safeguard your reverse strategies.
Refurbishing for Resale
Sometimes an item is returned by a customer that, though a bit rough around the edges, is still in good shape overall. The product can be refurbished and resold and could still provide a positive return in value. Commonly refurbished items include tech, electronics, furniture, jewelry, and more.
However, not all merchandise can, or should, be refurbished and resold. In fact, some companies reject this practice entirely as it can lessen their brand image.
Designers don’t want to see their products sitting in a discount store for bargain-basement prices. In these cases, slightly damaged merchandise is generally destroyed and thrown away. But, without a policy-driven reverse strategy, what it means to destroy an item could be blurry.
Secondary Market Control
The truth is, any type of item is subject to a return – be it designer or discount – and this presents a particular issue for high-end retailers. A secondary market can be a terrific solution for some companies as part of their reverse logistics strategy.
For example, electronics companies frequently refurbish and resell. The reverse chain would manage the entire process from customer return to warehouse storage to finding the appropriate secondary market for resale. New customers get a discounted item, and the manufacturer makes a small profit.
On the other hand, a designer with a high-end brand doesn’t want a discount chain selling their items. Designer merchandise is a specialty; it’s not available in every department store across the country. A reverse strategy will never involve finding a secondary market because, to the brand, there’s no such thing. In this case, your business should closely monitor the destruction of the merchandise.
Control Theft or other Losses of Product
Once a customer initiates a product return, the only way to control that item’s route is through reverse logistics best practices. But whether companies like to admit it or not, unethical people are working in every industry.
A returned item still in moderately good condition could tempt people to steal it when it’s headed for destruction and disposal. That can be especially true of designer goods with a higher resale value. Immediate and proper disposal is part of a successful reverse policy that’ll ultimately protect brand integrity.
Sometimes, however, a loss has nothing to do with theft but the general misplacement of the items. Efficiently running a reverse chain involves warehouse procedures for tagging, tracking, and storage of returned items.
An inefficient system could mean pallets are tagged incorrectly and stored where they may never be found again. Not only does this reflect poorly on the brand and its ability to manage its products, but it can mean a significant loss in profits at the end of the year.
Each brand has different concerns about the handling of its merchandise after a customer initiates a return. Though some companies refurbish and resell, others destroy immediately to reduce loss of profit and potential loss of merchandise – either of which can harm the brand. Successful reverse chain policies will help to ensure the brand name is always protected.
Image credit: Seth Anderson