How to outsource electronic equipment returns management

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Tad Vaas11 May 2022


How to outsource electronic equipment returns management

Make returns quick, easy and efficient for your customers.

E-commerce has wholly transformed consumers’ shopping experiences, and it allowed manufacturers to offer their products worldwide.

In 2020 as many as 87% of the UK households resorted to online shopping to meet their needs.

The United Kingdom also accounts for 14.5% of total global retail sales, so as a manufacturer, if you are making a product, most likely, you are losing out if you are not selling to UK markets.

54% of British online shoppers regularly returned their products after buying them.

If you do not have an established workforce in the UK, these returns can be a logistical nightmare and damage your profit margins. Therefore, solid returns management is essential to selling with the ever exploding British online retail markets successfully.

The process which handles these returns is called Reverse Logistics. Just as Forward Logistics helps you sell and deliver the product to the customer, the exact opposite process enables the manufacturer to build a procedure to take care of the product return. The procedure handles all the actions from the customer’s decision to return a product to a product delivery back to your returns partner, inspection, repair, and return to the customer or into re-saleable inventory.

The biggest challenge of a returns procedure is to make the process more efficient. Most of the time, the return processing takes twice the amount of time than shipping a new product. However, the returned inventory needs to be stored and disposed of eventually. An efficient reverse logistics process can eliminate all the costs.

Ownership of Returns Management

Do you have clear organisational responsibility ownership outlined who manages the return process? We assume that the warehouse should be dealing with returns; however, there is more involved in dealing with a returned item than shipping a new one.

It makes good sense to outsource your logistical returns management. We suggest outsourcing the process when you identify that the product will have to be returned and processed. Outsourcing to a professional returns management provider means you do not need to worry about creating a dedicated in-house team, which might not even make financial sense due to the low number of returns.

Expectations from Third-Party Processor

When the customer returns a product, the returns provider then identifies the issues, fixes the problems, and returns the product either to the customer or your warehouse for it to be reintroduced to re-saleable inventory. A typical example of third-party returns management process could look like this:

  1. The customer fills out and submits an online form. This form gathers information about the device, such as serial numbers and the reasons for return.
  2. Upon form submission, the customer receives an instant QR code and shipping instructions.
  3. Customer visits their local post office to drop the device off and can ship the device using just a QR code without the need to print anything.
  4. Post-office provides a tracking number, so that customer, manufacturer and returns management centre can track the inbound shipping.
  5. The returns management centre receives the device and logs it into a system, which acts as a portal, where the manufacturer and the customer can log in and track the return process.
  6. The returns management centre notifies the customer about the device’s arrival.
  7. The centre evaluates the product for damage and external condition.
  8. The centre refurbishes the device and quality checks it to ensure full functionality. Whilst the customer is kept updated every 48 hours about the status of their return.
  9. The product is returned to the customer or to your fulfilment partner to be reintroduced back into saleable inventory. Tracking allows the customer to liaise with the logistics partner to select various further delivery options.

Outsource or Not?

Product return, otherwise called reverse logistics, has a lot of moving parts and sometimes, handling it in-house might seem too complicated or might not even make financial sense. Especially if you need a specialist product refurbishing needs as this is mostly the case with electronic products.

There is a sweet spot when the manufacturer can still process returns in-house; however, as inevitable as returns are, the process will have to be outsourced when it grows out of what the warehouse can handle.

Outsourcing the returns to a dedicated returns management centre will make a difference. As a manufacturer, you will take advantage of already built processes without the need for capital investment on your part. In addition, your customers will benefit from an optimised and quick return process and will get back to using your product as soon as possible.

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