Logistics Reversed

Hey Vendorville, 👋

Let's talk about the dance of reverse logistics. While "forward logistics" is all about getting products to customers, reverse logistics is where the magic happens in the opposite direction.

It's like a shipping moonwalk, except instead of smooth moves, we’re talking returns processing and figuring out what to do with unsellable products.

Handling returns isn’t just about slapping a shipping label on and calling it a day. It requires a specialized strategy for returns processing and management. If your team isn't talking about returns today, here are the four main buckets to minimize the headache.

Know your Returns Trends 💰📉

Analyzing returns data uncovers patterns, allowing you to identify potential product defects, mismatches between customer expectations and product descriptions, or even marketing gaps.

Ask yourself:

What are my most common returns? Are they similar across retailers?
Are there specific products or categories that consistently come back?
Where are these returns occurring in the supply chain?
Is the issue stemming from the product design, packaging, shipping errors, or something else entirely?

Regularly reviewing your returns data gives you the insight needed to fine-tune your inventory, improve customer satisfaction, and minimize costly returns in the long run.

You can typically pull returns data within your retailer portal. Recently, Walmart added a Returns Scorecard in Supplier One that some suppliers are using to jump start this process.

Root Cause Analysis and Supply Chain Corrections 🔧

Once you've identified the top items being returned, the next step is a thorough root cause analysis.

Let's say your most common Damaged and Defective Goods arriving to stores that can't be placed on the store floor.

You'll want to have these resources handy to kick off your process.

Your Supplier Contract
Data on your Returns and any fines associated with returns
Understanding of the retailer you're receiving these returns

Knowing Your Supplier Contract 💡

Your supplier contract and retailer returns documentation are important to understand the context in which you're receiving these fines. Your Supplier Agreement outlines Handling Fees and Destination, the agreed upon return process for defective, damaged, recalled merchandise, and may have a defective allowance. That information unique to each supplier can inform how you address returns.

Regularly reviewing these agreements will help you negotiate terms that protect your business while holding both yourself and the retailer accountable. It’s also a good idea to monitor your performance over time to ensure both parties are meeting contractual standards and to renegotiate when necessary.

Avoiding Invalid Return Fines 💸

Returns aren't just a hassle—they can also lead to costly fines, especially when invalid returns slip through the cracks. Whether it's because of improper paperwork, missing labels, or unauthorized returns, fines can add up quickly. Here's an example from Walmart of how return fines can start to stack.

By staying vigilant and adhering to both internal and supplier return policies, you’ll safeguard your bottom line and avoid unnecessary financial losses.

In Other Retailer News 📰

Walgreens to close 1,200 US stores

Walmart moves ASPEN ship point management to SupplierOne

Listeria recall of chicken hits Target, Amazon, Kroger, Albertsons, others

Rick’s Tips 💘

"2022 Overages at Walmart will expire at the end of the year. If your team hasn't disputed those claims, you may miss out on a revenue recovery opportunity."

Let's Circle Back 🌀

Speaking of fines, check out this totally science-based quiz to find out what type of deduction you are.

If you've been rockin' with us since the beginning of this year, this quiz may look familiar.

Until next time,

Your Friends in Vendorville ❤️