How to Recover Value on Returned Inventory

5/12/2015
Retailers, consumer brands and OEMs have numerous options to recover value quickly on overstock, unsold, out-of-season, and returned inventory.

First, I recommend outsourcing the Return to Vendor (RTV) program. Historically, this aspect of the reverse supply chain has been a major headache for retailers and manufacturers, due to difficulties managing the necessary staffing, space and logistics. Not anymore. By outsourcing the RTV processes to an experienced vendor that handles all services in-house, retailers and manufacturers remove costly "touches" in their supply chain, freeing up distribution center space and speeding access to recovery.

Other opportunities exist through re-commerce solutions, and it's important to work with a global reverse supply chain provider who can develop a program that meets your specific needs. A multichannel approach delivers the highest possible recovery value, and this process typically involves evaluating three channels: 1) selling higher-value or refurbished goods directly to consumers, 2) selling goods through B2B bulk sales auctions, and 3) using direct sales to sell merchandise by the truckload. And our research shows that 90 percent of secondary market bidders say detailed product information is important to their decision to bid, so always remember to include product details on each manifest.

In addition to a strategic plan to liquidate this inventory, returned and overstock items require sound compliance and comprehensive buyer customer service.  A reverse supply chain vendor must delete data from all items, preventing personal and company information from being passed on to the next device purchaser. As a greater number of breaches are exposed, the data privacy compliance standards are growing stricter. I recommend partnering with a company that uses the most rigorous industry-standard data wiping processes to ensure that returned inventory is never sold containing confidential information.

And stellar buyer customer support plays an important role in an organization's ability to recover value. Experienced partners offer extensive support in every aspect of the buyer experience — from site registration to dispute resolution. Look for a vendor skilled in this area that delivers top-notch service no matter the time zone, language or preferred communication method (such as phone, email or web chats).

By focusing on these areas, a single provider will simplify your reverse supply chain and allow you to focus on your core business. It's time to transform this burden into an abundant opportunity that fuels the achievement of strategic goals through a high performing reverse supply chain.


Jim Rallo is the president of the Retail Supply Chain Group at Liquidity Services, a global solutions provider in the reverse supply chain with the world's largest marketplace for business surplus.

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