Authorizing, tracking, receiving, evaluating, refurbishing, recycling, disposing, and reselling returned merchandise are all activities that fall under reverse logistics—the processing of material returned to the vendor or manufacturer.

With E-commerce’s already large returns volume growing along with the environmental and economic benefits of the circular economy becoming ever more clear, reverse logistics has been getting a lot more attention in the world of manufacturing.

For OEMs, reverse logistics can help recover residual value, supply parts for refurbishing and repairing products, and even lure in new customers through heavily discounted merchandise. To realize those benefits, however, reverse logistics must be expertly executed.

Tangible Benefits of Outsourcing Reverse Logistics

This is why many OEMs turn to outside reverse logistics experts like RiverSide Integrated Solutions. Partnering with a full-service contract manufacturer benefit OEMs in many ways. Here’s just two of them:

• Their own reverse logistics labor costs are minimized. Reverse logistics require technically trained staff (e.g. repair technicians and warehouse managers) as well as personnel with supply chain skills. Neither of those are in abundant supply in today’s tight job market. When OEMs team up with a reverse logistics partner, they are spared the costs of attracting and retaining their own reverse logistics team.

• OEMs enjoy on-demand reverse logistics scalability. For many industries, the volume of returned merchandise varies considerably throughout the year, which is why investing in warehouse facilities, software, and equipment makes little sense if much of it will be underutilized during the slow periods. Outsourcing reverse logistics to an experienced partner allows OEMs to convert much of that fixed CapEx into variable OpEx.

Intangible Benefits to OEMs When They Partner with an External Reverse Logistics Provider

In addition to the above two impacts to an OEMs bottom line, there are other, less direct benefits for OEMs:

• Maintained focus on core strengths and business activities. When OEMs join forces with a partner like RiverSide Integrated, they’re able to focus their attention and resources on areas like sales, new product design, marketing, sales, and strategic planning. Since they know that their products are supported by a talented and trained team, OEMs don’t have to divert their attention to testing, part replacement, warranty tracking, and returns management.

• Less pain and frustration. When done right, reverse logistics can reap all the benefits we’ve explained above. When reverse logistics isn’t executed well, it can turn into a nightmare. OEMs who outsource their reverse logistics to experienced and qualified partners are spared the toil of learning reverse logistics by trial and error.

• More positive impressions on customers. The returns process is an opportunity to interact with the customer, not only capture useful data about the type of merchandise and reason for the return, but also to deliver a smooth and exceptional returns experience for them. Customers impressed by a professional and easy returns experience are much more likely to keep an OEMs brand in mind down the road when shopping for other products. This is just as true for a consumer who returns a smartphone accessory as it is for a business returning office equipment.

These intangible benefits to OEMs when they team up with a reverse logistics partner like RiverSide Integrated can keep them lean, agile, innovative, and competitive. OEMs that aren’t bogged down in the minutiae of processes outside of their expertise are better able to maintain their forward momentum and grow.