When you are running an online business without developed internal logistics teams, customers returning their orders or parts of their orders can be an operational challenge. Not only does the company have to reimburse the customer for their purchase, but they also have to ensure that their product is returned to the warehouse and, if possible, put back into circulation.
For this to happen efficiently, companies need to streamline their distribution channels so that inventory can move in and out of their storage facility without disruption. However, investing in this infrastructure is often not feasible for smaller businesses.
One ideal solution to managing reverse logistics – or returns – is to outsource this part of your supply chain to a third-party logistics provider, or 3PL.
What is 3PL?
3PL, or third-party logistics, is the modern way to do business on a global scale, regardless of how big or small the business is.
When you partner up with a trusted 3PL provider, you’ll gain supply chain expertise and infrastructure without needing to manage it in-house. Outsourcing all or some elements of your supply chain will free you up to grow your business.
3PL companies are a perfect fit for small and medium-sized businesses, offering comprehensive solutions to your company’s logistics needs. This includes reverse logistics and returns in addition to other essential services.
Leveraging a 3PL for reverse logistics will enable your global customer base to return packages easily and for this inventory to be efficiently tracked and managed.
Let’s take a closer look at how reverse logistics works.
How Can 3PL Help with Returned Orders?
Reverse logistics is the process by which unwanted packages or items are returned to the seller.
This can be complex and costly, but a 3PL can help your business by minimizing the cost and burden of customer returns.
Inventory that is returned after having already been sold can result in lost or unrealized revenue. Much of this cost has to do with shipping the product back to its designated return center – which the store or seller typically absorbs. With 3PL, businesses can cut these overhead costs and provide a convenient and cost-effective channel for customers to return goods.
In addition, using 3PL for reverse logistics can assist with recycling, refurbishing, or reselling merchandise thereby reducing the overall cost of returns.
This will positively affect both customer satisfaction and the operational efficiency of your business.
3PL Reverse Logistics Services and Benefits
One of the most significant advantages of working with a 3PL for reverse logistics is that businesses don’t have to worry about fluctuations in the volume of returns. 3PL companies are flexible and can quickly adapt to changes and keep things running smoothly.
Another significant advantage of working with a 3PL company is that it can help you find the best shipping rates. While small businesses may struggle to secure capacity, 3PL providers typically negotiate better pricing and terms. This will allow your business to pass these savings on to customers, and this can increase customer retention.
Working with a 3PL for reverse logistics is vital if you run an eCommerce business. This is because eCommerce businesses have higher volumes of returned orders from diverse geographic regions – and without comprehensive logistics infrastructure.
Having an experienced full-service 3PL partner can help your business run smoother and more profitably.
Top 3PL Companies for Reverse Logistics
Most 3PL companies provide reverse logistics services, but the ones we’ve listed below are some of the best in the business.
- Shipwire
Shipwire provides 3PL fulfilment services globally from over 140 locations. The company’s core competencies are supply chain and inventory management, utilizing modern cloud-based technology. The company also provides reverse logistics and return services to its clients.
- FedEx
The most well-known company in the warehouse and logistics sphere, FedEx, has nearly 2000 locations worldwide and provides services in more than 200 countries and regions.
- UPS
UPS, one of the oldest and most famous logistics companies, has 600 locations in the US alone and provides services in 220 other countries. So if you are looking for an established 3PL partner with connections across the globe, UPS is the right choice.
How to Find the Best 3PL for Your Business
Give your customers the best service and make sure that they can easily return any unwanted items by using a third-party logistics partner for reverse logistics.
These companies offer a wide range of services to help your business. Important ones to look out for are reverse logistics and returns, warehousing, and transportation management. Other services include custom kitting, picking and packing, and more. Before choosing a provider, first determine what your business needs are and identify 3PL providers that offer these services.
Don’t forget to read review from other business owners to get a better idea of whether the provider will meet your expectations.
Managing Reverse Logistics with a 3PL Company: FAQs
- Will reverse logistics make your business more sustainable?
An aspect of reverse logistics that some businesses overlook is proper disposal of damaged or faulty products. Using a 3PL partner can help you reduce the waste your business produces via effective reverse logistics.
- Can reverse logistics help with inventory management?
If you run a business where customers can send back their purchased products back, then a 3PL company can ensure that these orders are tracked as they are being transported to and from various locations.
- Can using a 3PL for reverse logistics increase sales?
Reverse logistics has a significant impact on customer retention and sales revenue. Your customers are more likely to buy again if they have a good experience with your business’ shipping process – especially if they want to return an item and be refunded.
- Is Freightos.com a 3PL?
No. Freightos.com is an online booking platform – not a logistics provider. This means that Freightos.com can help when it comes to finding shipping to a 3PL service provider warehouse, but will not be providing these services directly.
To learn more about 3PL check out our other guides including (3PL) Third Party Logistics Providers, How Does 3PL Work, and Third-Party Fulfillment.
