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Product Returns and Reverse Logistics

While online shopping has been growing exponentially over the last years, like so many trends the Pandemic shifted it into high gear. Of the record $222 billion Americans spent on online holiday purchases this past season, 30%, or nearly $67 billion, will be sent back, according to CBRE, a commercial real estate firm that also focuses on retail logistics. That’s a 13% increase versus 2020 and 40% versus 2019.

This creates added stress on the already stretched supply chain and requires new strategies to make it work in reverse. Shippers, distribution centers and retailers are all feeling the pain. Small brick-and-mortar operators have had to offer generous return policies to compete with the Walmarts and Amazons of the world, but they simply cannot afford to continue.

The costs of return shipping, re-stocking, re-packing for later sale and then re-sending a new item is not sustainable. Industry analysts have estimated the cost of a return being above $30.00, so if the initial sale price is not above $100, the entire transaction is a money loser.

Due to supply chain fears this year, many consumers intentionally bought more than they needed as a hedge, knowing there is no risk due to generous return policies. No cost, no friction returns also encourages what retail analysts call “bracketing” — that is, buying multiples of an item in different sizes or styles and returning what doesn’t work.

CSA Packaging among others, have sought to serve this new market. Adding stability and predictability to the reverse logistics dilemma is the goal. By setting up dedicated and specialized sorting and repacking centers, they are bringing order to reverse direction. Flat pricing and total end-to-end service gives retailers stability and allows them to evaluate their return policies and rationalize costs to better build them into initial sales pricing.

Reverse logistics, sorting, re-packing, and all types of contract packaging are specialties of CSA Packaging.

Call CSA Packaging to see how they can streamline your Reverse Logistics Operations.


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