Tapping the “Open Box” Market to Improve Revenue Streams
Is your company leveraging the open box market to improve the bottom line?
If you sell a product in-store, the chances are good that you can identify ways of recovering assets and getting them back into the sales cycle. If you sell online, this becomes even more imperative, due to the high rate of returns.
For many companies, even those products that come back for warranty replacement can be recaptured.
The key to making the open box market profitable is centralized returns management. Adopting a reverse logistics technology platform can substantially improve your ability to recapture assets and unlock their value in the open box market.
Getting Returns Back to the Marketplace
Although the numbers vary depending on the source and the industry, reverse logistics experts estimate that approximately 5 to10 percent of goods sold at brick-and-mortar locations are returned.
In the e-commerce space, that number surges to around 40 percent. In fact, Shopify reports that 41 percent of consumers who buy online purchase multiple variations of a desired product with the full intent of returning all but the variant they prefer.
The inherent challenge is that, depending on your product, you may no longer be able to sell returned products as new, even though they’re unused. But that doesn’t mean they shouldn’t go back into your available stock or another viable liquidation channel.
The Challenges of Recovering Assets
The process of recovering assets and returning them to your inventory range from simple to highly complex, depending on the timing of the return, the condition of the merchandise, the location of the return, etc.
Using a centralized returns management approach allows you to evaluate the item and make a determination about its path back to market. Having a formalized process and established evaluation criteria also helps expedite the process, whether the item requires refurbishment, repackaging, etc.
For many retailers, however, routing returns directly to the open box marketplace is the fastest and most cost-effective way to convert returns into an income stream. Some companies offer their open box merchandise on their websites and in-store, as Best Buy does. Others set up a secondary sales entity – think Nordstrom and Nordstrom Rack, for example – specifically for returns. You can also source liquidation partners that specialize in selling open box items, either online or brick-and-mortar overstock-type stores.
Using Returns Management Technology to Leverage the Open Box Market
Although leveraging the open box market may sound daunting, you don’t have to build your processes from scratch. You can leverage returns management technology and, using reverse logistics, quickly convert your returns to a positive income stream.
Despite the availability and affordability of this technology, fewer than one-fourth of retailers are using a returns management system. Those companies that are putting reverse logistics technology to work to tame the returns boondoggle have the potential to add five percent or more to their bottom line.
Many of the world’s most well-respected retailers – including Samsonite, Electrolux, Cole Haan and Tumi – are using the ReverseLogix SaaS technology platform to manage their reverse business. Our platform helps reduce inefficiencies in your processes and maximize your asset recovery. You’ll improve the visibility of your returns, fine-tune your processes and increase your product ROI.