Impact of Reverse Logistics on Global Sales and E-commerce Businesses

 

International retailers experience severe logistical strain and financial loss as a result of cross-border e-commerce returns. In fact, estimates claim that 70% of internet buyers make purchases from international websites. Additionally, the typical return in 2020 cost 59 percent of the item's original sales price in reverse logistics fees. Additionally, it is expected that $120 billion in items would be returned between November 2021 and January 2022, costing retailers up to 59 percent more than they did last year due to holiday returns.

Of course, every brick-and-mortar store or online merchant wants to minimise returns. However, it is inevitable that some sales will be immediately returned to the retailer. During the end-of-year holidays, this process, particularly when cross-border, can be extremely unpleasant and expensive, but there are certain actions you can take to reduce the impact of reverse logistics - and their cost - on your company.

 

Having the appropriate knowledge is the first step. Continue reading to gain a complete understanding of what returns mean for your international e-commerce company and how to proceed with efficient reverse logistics that not only keep your costs in check but also improve client loyalty.

 

Knowing reverse logistics and how they work

 

The lifecycle of a product after it is delivered to your client is referred to as reverse logistics. For instance, there are many different reasons why people return products. Your company will experience a spike in returns during any Christmas shopping season, whether they are for items that were "too small," "too large," "not as described," or "defective." Furthermore, reverse logistics go beyond merely accepting the return. It covers the procedures for quality-testing the returned item to look for flaws, noting difficulties with the item, and then fixing, discarding, or replenishing the goods, as appropriate.

 

Your entire supply chain may be impacted by these processes. It is quite difficult to forecast the amount of returns and, consequently, the cost to your company. However, while returns are a reality for e-commerce vendors, your business should not suffer in the long run as a result.

 

WHAT YOUR BRAND CAN ACHIEVE FROM SIMPLE RETURNS

 

Online buyers only need one bad encounter to permanently forget about a brand and start looking elsewhere. On the other hand, a satisfying end-to-end purchasing experience can solidify a customer's lifetime commitment. That experience has benefits. Research demonstrates:

• 92 percent of consumers will repurchase products if returns are simple.
• Sixty-seven percent of customers look at the returns page before making a purchase.
• Approximately 79% of customers prefer free return shipping.

 

WHERE DO THESE FACTS LEAVE YOUR BUSINESS?

 

To remain competitive in the global market, it is essential to have a flexible, user-friendly, cost-effective returns policy. You have the chance to automate reverse logistics and deal with the increased demand, particularly during the Christmas retail season. Consider the most significant advantage a solid reverse logistics solution may provide if you are selling internationally: customer retention. Even if buyers are dissatisfied with the products, they will be satisfied with the return procedure. When creating a return policy, keep the following in mind:

• Consider the laws in your nation that may be applicable to online or cross-border purchases of items. According to consumer protection rules in several nations, customers who bought an item online have the right to return it within a certain period of time, no matter the cause.

• Look into the fees or taxes associated with returning items from specific locations to the country of origin.

• When developing your pricing structures, be sure to take into consideration the additional work and restocking fees associated with returns.

• Even though others may offer free returns, you are not required to. In reality, in the last few of years, companies have started to rethink their tax return policies. More companies are updating their policies as they become aware of the high cost of returns. Examine how comparable international companies operating in your target areas manage returns from online purchases.

• In the end, you'll want to reduce returns overall, so maintain track of information about why customers are returning products so you can create business plans to reduce returns in the future.

 

You should keep an eye on the following aspects as well:

• the state of the returned item. You'll need this information if the product is failing at a specific stage of the sales/reverse logistics cycle. This is where quality control comes in to fix any potential issues in the future.
• the quantity of goods returned. Are specific products seeing repeated returns? Keep track of the items returning to you and how many of them.
• the proportion of sales that are lost because of returns. Determining how many of your returned products can be reintroduced into your forward logistics supply chain as opposed to being burned or recycled is one aspect of this element.

 

Added advice:

• Utilize technology, such as international e-commerce platforms, to assist you improve the user experience on your website. If you sell apparel, for instance, you can provide virtual fitting rooms so that clients can assess how the products will look on them.
• Make sure your product descriptions, images, and sizing guides are accurate. Additionally, it's critical to customise this element of the consumer experience by making sure sizes are communicated in their respective local measurements.
• Utilize past purchases to guide clients down a more efficient path. For example, technology can enable your website automatically suggest a better size to customers who have previously purchased things in the incorrect size.

 

Above all, communication is essential. Your company's website should clearly describe its return policy in your target customer's native tongue, using simple language with as little legalese as possible. Make it clear what cannot be returned, how long the return process will take, how much the customer will ultimately pay, and whether any additional local rules apply. Your website should make it apparent to users where to go if you have a self-service returns gateway.

 

An advisory for more recent cross-border e-retailers: 

Consider the fact that seasoned multinational e-retailers begin preparing their supply networks for the reverse logistics of the holiday season well in advance of the season. They alter their dealings with last-mile delivery partners, update the language in their customer-facing return policy, and sometimes even alter warehouse or logistics management software to better suit their requirements. There is no danger in planning far in advance so that your supply chain can function flawlessly even if your post-holiday sales return rates are high.

 

WHERE DO YOU BEGIN?

If the several processes outlined above seem overwhelming, keep in mind that many cross-border e-commerce firms aren't making this journey alone. They are seeking assistance from outside professionals in global retail. No matter where your clients are situated, an experienced partner can assist you in developing and implementing an effective return plan for your worldwide market.

 

To facilitate seamless reverse logistics and enhance client experiences, the ideal partner will have established connections with foreign airlines. Even better, some partners provide software that can support your return procedures and experiences, allowing you to provide a self-service return portal on your e-commerce website.

 

Software for cross-border e-commerce can also assist you in optimising your website to reduce returns. Your clients will be less likely to return things for reasons like "not as described" or that they didn't end up loving the style after they saw the product in person if your website accurately portrays your products.

 

While preventing returns is the ultimate goal, the measures listed above can assist you in creating an efficient procedure for handling them so they don't impact your supply chain or financial position.

 

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