3PL reverse logistics best practices

With millions of e-commerce companies flocking to find the best 3PLs to help manage their logistics, it's clear that 3PLs know a thing or two about shipping. Still, even third-party logistics companies are affected by impending returns. According to Invesp, nearly a third of online purchases are returned, suggesting that more and more consumers are becoming comfortable returning online purchases.

For 3PLs, demonstrating excellence through effective reverse logistics strategies is essential to maintaining customer satisfaction and loyalty. ShipWise offers a comprehensive solution that helps 3PL companies automate orders, compare shipping rates, process batch shipments, and seamlessly integrate with other systems—all in one platform.

1. Stack technology

The integration of multiple applications, software platforms, and solutions—often called "technology stacking"—is crucial for successful e-commerce operations, especially for 3PLs. Maintaining the physical and organizational integrity of your technology integrations, including Inventory Management Systems (IMS), Warehouse Management Systems (WMS), and marketplace connections, is vital for effective warehouse management.

For a seamless reverse logistics workflow, integrate your WMS with a shipping solution designed for 3PLs. While your WMS helps with inventory management and warehouse organization, Order Management Systems assist in handling multiple companies' orders and facilitating returns processing.

Dedicate a separate area within your warehouse specifically for unpacking returned items and accounting for returned products. This area should be maintained as a daily priority to minimize inventory loss and accounting errors related to returned merchandise. Proper stock management at the 3PL level also helps e-retailers communicate accurately about product availability to their customers.

2. Communication

A Narvar study  found that 95% of online shoppers would continue purchasing from a company after a positive return experience. This positive experience includes hassle-free processes, consistent email updates, quick refunds, and responsive customer service.

As a 3PL, you can directly impact the efficiency and speed of the return process by staying current with returns processing, promptly notifying both the company and the customer about status updates. Effective reverse logistics for your 3PL translates to better service for your client companies, resulting in repeat customers, an enhanced reputation, and business growth.

3. Create a return service

Returns can be a significant pain point for consumers. Simplify the process by including a return label with the original delivery. Through ShipWise, you can generate and print return labels using special services that automatically switch the shipping addresses when creating a return label. If the customer doesn't use the label, no charges are incurred.

A shipping solution like ShipWise can create prepaid return labels and compare rates to find the most cost-effective option for returning packages to the warehouse, saving both time and money. The pay-on-use model means there's no financial loss if the return label isn't used.

4. Utilize reduced rates

3PLs typically benefit from reduced shipping rates due to their high shipping volumes. As consumer demand for free shipping AND free returns continues to rise, offering competitive return options can become expensive.

To facilitate easier returns, 3PLs should consider extending their volume-based shipping discounts to the retailers they serve. These reduced rates not only help manage return costs but also make your fulfillment center more attractive to potential clients.

5. Utilize client profiles

Create individual account profiles for each retailer client to better manage their specific needs. These profiles can assign variables to orders, such as controlling origin and return addresses, preventing returns from being mixed up and eliminating inventory errors.

To set up an account profile in ShipWise, you'll need to configure locations (origin and return addresses), integrations, and carrier preferences. This customization makes returns more organized and efficient, saving your 3PL time, money, and operational headaches.

Conclusion

The e-commerce landscape continues to evolve, with returns management becoming increasingly important to your clients' bottom lines. By implementing these five best practices, you position your 3PL business as a valuable partner that can handle the full lifecycle of products—not just outbound shipments. This comprehensive approach ensures both your direct clients and their end customers remain satisfied, leading to stronger business relationships, improved retention rates, and opportunities for growth in the competitive 3PL sector.