3 Intangible Benefits That OEM’s Can Realize with a Reverse Logistics Partner

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

Reverse logistics has been getting much more attention in the manufacturing world. This is partially due to eCommerce’s large returns volume growing. It is also due to the growing popularity of the circular economy, due to environmental and economic benefits.

For original equipment manufacturers (OEMs), reverse logistics can help recover losses. This includes residual value, supply parts for refurbishing and repairing products and even lure in new customers with discounted merchandise. To realize those benefits, however, you must expertly execute your reverse logistics program.

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

Reverse logistics require technically trained staff (e.g., repair technicians and warehouse managers) and 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 save the costs of attracting and retaining their own reverse logistics team.

For many industries, the volume of returned merchandise varies considerably throughout the year. For these OEMs, investing in warehouse facilities, software and equipment doesn’t make sense. Outsourcing reverse logistics to an experienced partner allows OEMs to convert much of that fixed CapEx into variable OpEx.

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

When OEMs join forces with a partner like RIS, they can focus their attention and resources on areas. We let you focus on things like sales, new product design, marketing and strategic planning.

Since they know that a talented and trained team supports their products, OEMs can trust that we have the teams to support their products. This leaves them more time to focus on testing, part replacement, warranty tracking and returns management.

When done right, reverse logistics can reap all the benefits we’ve explained above. However, when reverse logistics isn’t executed well, it can turn into a nightmare. OEMs who outsource their reverse logistics are spared the toil of learning reverse logistics by trial and error.

The returns process is an opportunity to interact with the customer, not only to capture valuable 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 likelier to keep an OEM’s brand in mind 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.

When they team up with a reverse logistics partner like RIS, these intangible benefits to OEMs 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.