Returns solutions for multi-warehouse ecommerce brands
Whether you’re leasing out warehouse space independently or partnering with a 3PL for streamlined fulfillment, you’ll be able to realize a lot of benefits through a multi-warehouse model for shipping your products. Expanding your warehouse operations beyond a single location can help your brand grow its reach, reduce shipping costs, and speed up its delivery rates.
But when you use a multi-warehouse system, don’t overlook the importance of building a streamlined system for your reverse logistics. After all, a good portion (sometimes, up to 30%) of your product sales are likely to come back to you as returns. By building an efficient returns management strategy, you’ll be able to optimize reverse logistics costs, get inventory back faster, and retain more of your returns revenue.
Challenges with multi-warehouse ecommerce returns
If you’re operating or partnering with multiple warehouses, dealing with returned items can be a complex nightmare if you don’t have a streamlined system in place.
Without a clear process for routing your returns, you’re likely to simply redirect them back to where they came from – which is not always the best option for efficient returns management.
Over- and understocking
Let’s say you had 40 SKUs of a swim cover-up in your Tennessee warehouse, but only 10 in Florida. But a customer purchased 7 of the same item in different colors from Tennessee, and chose to send 6 of them back. Without the visibility to manage inventory based on stock levels, you’re overstocking one warehouse rather than sending needed inventory to another, leading to longer shipping and higher costs to ship items to customers in regions farther from the well-stocked warehouse.
Inefficient returns routing
With a manual returns system, customers may simply choose to send items back to your primary warehouse location – without realizing that you have regional warehouses located closer to them. That can result in higher return shipping costs, and longer time frames until you’re able to get items back into inventory.
Returns on items that can’t be resold
Even worse, you might also be covering the cost of returns for items that aren’t likely to be resold, whether they’re out of season, overstocked, or in damaged condition. In these cases, you’re not only losing the cost of the returned item – you’re losing all of the money associated with the reverse logistics process as well, which can amount to 66% of the total item cost.
Higher rates of returns abuse
If your warehouses aren’t all following the same process for inspecting returns, you’re likely to see scam artists take advantage of lax inspection processes to engage in returns fraud. Empty box returns, in which a fraudster sends an empty or weighted box back for a refund, are a common example of this type of scam.
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By creating a streamlined system for returns management that integrates all of your warehouse locations, you’ll be able to successfully avoid all of these hurdles.
Using a returns management solution like Loop, you can:
Restock items based on inventory levels:
Don’t just send items back to where they came from – send them where they’re most needed. By integrating warehouse and inventory management data, you’ll be able to automatically route returned products back to warehouses with lower inventory levels, ensuring that you can maintain healthy levels of stock in each location.
Dynamically route returns to maximize cost-efficiency:
When a customer is shipping back an item, your solution can dynamically build shipping routes to your warehouse of choice that optimize for reduced costs. If the shopper chooses a drop-off return rather than mailing it in, you can even reduce costs further by consolidating multiple returns into a bulk shipment.
Set up Workflows to determine return outcome:
It’s not always worth restocking a returned product if you’re not going to realize its value in resale. With Loop’s conditional logic, you can pre-set different outcomes for returned products based on criteria like item type and condition. While some items may be sent back to your warehouse, others may be sent to a donation or recycling facility, or you can opt to let the customer keep the item as a returnless refund.
Build consistent protocols for returns inspections:
With a unified returns management platform, you can ensure that all of your warehouse teams are following consistent guidelines for inspecting and accepting returns. By putting safeguards in place to require inspections prior to refunding fees, you’ll be able to block most forms of returns fraud and protect your profit margins.
Cover the cost of returns with consumer-paid fees:
If the cost of covering return shipping is no longer sustainable for your business, Loop enables your shoppers to offset return shipping costs by paying a surcharge during the initial purchase – helping you generate a cash buffer to cover your brand’s reverse logistics expenses, while ensuring a positive customer experience.
By setting up the right multi-warehouse returns solution, you’ll be able to recover revenue from your returns process and optimize your inventory management with streamlined logistics.
Want to see how Loop can help you optimize your multi-warehouse returns operations? Book a demo.
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