Why are 3PLs adding Returns Management services?

Worker hands holding tablet on blurred warehouse as background

As spending in the B2C and B2B markets grows, so does the volume of product returns.

  • An average of 16.6% of total U.S. retail sales from 2021 will be returned. (National Retail Federation)
  • Up to 30% of B2B sales are returned. (Forrester)
  • Others estimate the amount of lost revenue due to returned items is around 10% of total sales.

Many companies struggle to manage product returns efficiently. As a result, they’re overwhelmed with return costs, waste and complexity. They’re taking a hard look at streamlining, automating and reducing the cost of returns processing.

In a returns management survey from ReverseLogix, 80% of respondents said product returns costs are “significant to severe.”

Three Reasons 3PLs are adding Returns Management services

Product returns – when not done efficiently or accurately – are messy and complex, and many companies would rather not deal with them. 3PLs are perfectly positioned to take over returns management services for their customers because they are well versed in managing forward logistics.

As your customers’ established partner for managing fulfillment, you can provide enhanced value with returns services across the mix of SKUs already moving through your facility.

In other words: Because you know what’s going out the door, it’s easier to manage what’s coming back!

By thinking beyond “picking, packing and shipping” products, 3PLs add a high-value service that most companies can’t efficiently manage themselves. For 3PL customers, outsourcing returns management to a 3PL improves their own profit margins, conversion rates and customer satisfaction.

According to the ReverseLogix Reverse Logistics Technology Study, the vast majority of companies that use a 3PL for returns management are glad they are outsourcing returns. They cite flexibility, cost efficiency, and resource efficiency as the reasons for choosing 3PL return services.

Returns management: A win-win for 3PLs and their customers

When returns management is outsourced to a 3PL, the items are received at the facility are efficiently processed for replacements, refunds, or even recycling and repairs. 3PLs, in turn, gain a new and profitable revenue stream at a time when service differentiation is essential for success.

Tools for 3PL Returns Management Services

A returns management system (RMS) is purpose-built technology that gives 3PLs total, end-to-end reverse logistics services for their customers. It fully manage returns processes, as well as centralizes and analyzes data for unprecedented visibility into returns.

  • B2C and B2B customers portals for returns initiation
  • Inspection
  • Processing
  • Repairs, recycling, return-to-vendor, re-tagging and re-sale
  • After-sales care
  • Automated customer notifications
  • Robust data insights and reports to identify issues faster, save time, lower costs and minimize returns before they happen

By offering returns management to an existing customer base, we’ve seen 3PLs increase revenues 10%-30%.

Gaurav Saran, CEO of ReverseLogix

An RMS scales quickly to meet the demands of dozens of different 3PL customers, each of which may have different SLAs and operating requirements.

  • Move resellable products quickly through the returns process and back into the marketplace
  • Easily manage different returns scenarios through one comprehensive platform
  • Leverage data to build customer relations and product decisions
  • Maintain consistency across logistics teams and business units; visibility for internal operations and multiple customers alike
  • Configurable, automated workflows will meet each customer’s specific need by location, customer and product