How a 3PL Makes eCommerce Returns Less Painful

Many online sellers find eCommerce returns management difficult to handle. Most eCommerce order fulfillment operations focus on getting products out the door and into the hands of customers without much consideration for what happens when a customer sends the order back. In many distribution centers, returns get piled into unused corners of the loading dock or warehouse until someone has time to process them, but this practice can get expensive quickly.

Though it varies by retailer and product type, up to 30% of eCommerce orders get returned by the customer. That number increased around 70% in 2020 due to the pandemic and the associated increase in online shopping. That’s a lot of product to handle – especially when consumers still expect two-day shipping.

Rather than retooling distribution to integrate better reverse logistics capabilities, many e-Tailers have turned to third-party logistics (3PL) providers to manage eCommerce returns on their behalf.

Why Does a 3PL Make eCommerce Returns Easier?

3PLs have expertise in managing both inbound and outbound shipments. This experience makes it easier for logistics providers to affordably handle virtually any volume of eCommerce returns without investing additional resources in new equipment, technology, or training. Some of the primary benefits gained by using a 3PL for eCommerce returns include:

• Wider facility network. A 3PL has a more extensive network of distribution locations than most eCommerce retailers would have on their own. Having more facilities to receive returns can reduce the returned item’s shipping cost, which consumers expect the seller to cover.
• Easy returns. A no-cost, simplified return process has become a shopping qualifier for many consumers. A well-handled returns process encourages repeat business and reflects positively on your brand. How a seller handles eCommerce returns will only become increasingly important in the coming years for all parties involved.
• Quality control. Assessing the condition of eCommerce returns can be a time-consuming and error-prone practice for outbound-focused distribution centers. A 3PL provides dedicated, experienced staff members who, based on parameters established by the brand, decide if items should be discarded, recycled, or put back into inventory.
• Advanced analytics. Access to sophisticated logistics technology allows a 3PL to identify any trends in product returns. For example, the data will show if a specific product gets damaged in transit more frequently and needs better packaging.
• Better carrier rates. Parcel shipping can account for up to 75% of eCommerce fulfillment costs. 3PLs negotiate bulk discounts with parcel carriers, which lowers the cost per return. As a result, the 3PL returns items to your hands more cheaply than you can do independently.
• Scalability. A logistics provider can scale up quickly when needed. This ability is instrumental in product recalls, peak holiday sales periods, or other events that might drive large increases in returns.
• Organized receiving operation. While your distribution center may handle larger truckload shipments well, individual parcels are harder to process. A 3PL provides a critical induction point for each package, where it can be assessed and moved to disposal or restocking as needed.

The above factors ultimately create smarter, more efficient returns processing operations. As an online seller grows, eCommerce returns only get messier. A 3PL can help you straighten out your reverse logistics to make sure items return to inventory quickly while keeping costs under control.

How Do I Know if I Need a 3PL to Handle My Returns?

An online retailer’s primary focus is on sales, marketing, and other revenue-generating activities. It’s easy for a sub-optimal product returns process to escape attention and invisibly drain profits.

Here are some signs that it’s time to look for a 3PL that can handle returns management on your behalf:

• You have piles of returned inventory in the warehouse waiting to be processed
• Pulling staff from picking and packing to process returns has slowed down order fulfillment
• You’re paying too much overtime and/or burning out your warehouse staff to process returns
• You don’t have any room in your warehouse for returned goods
• Your receiving operation can’t process individual parcels efficiently

If you already use a 3PL for order fulfillment, then it makes perfect sense to include reverse logistics services as part of the package. The best time to talk about returns is when you enter into the relationship with your fulfillment 3PL, but this service can be implemented later by your provider if needed.

Be sure that there is an established procedure for returning items to inventory and disposing of damaged or expired items. The more you and your 3PL plan ahead of time, the less tedious and expensive returns management will be for everyone involved.

To discuss order fulfillment and returns services with a fulfillment expert, contact Staci Americas Fulfillment today to start a conversation.