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Reverse Supply Chain Brings Retailers Grief

Online shopping has grown in popularity immensely over the past few years. More than half of adults worldwide shop online on either a monthly or weekly basis, according to PricewaterhouseCoopers.

In the U.S. alone, online sales are on track to reach $523 billion by 2020, a 56 percent increase from 2015’s $335 billion, Internet Retailer reported.

Though e-commerce is a rapidly growing platform, it isn’t without its flaws. Where there are online orders, there are returns, and in no small quantity. The Wall Street Journal reported that about one-third of all items bought online are returned. This is called the reverse supply chain, and it isn’t as easy to manage as its cousin, the forward supply chain. Instead, it is often unpredictable and unprofitable.

The reasons for returns vary widely, but the cost to the retailer is the same. Items that are returned typically can’t be put back on the shelf, sold as new or sold at full price. One company, Rue La La, reported that returns cost it $5 million in just one year.

Dealing with Returns

Returns don’t just affect the financial health of a company; they can also cause disorder at the retail location or warehouse the items are returned to. According to RetailDive, 4 billion pounds of returned items are directed straight to the landfill each year. Other options include selling items to liquidators or wholesalers, who will then offer the items to consumers at a discounted rate, or recycling the materials, Wired reported.

These products must have a place to be housed while the retailer decides what their fate will be. However, as the rate of returns continues to grow, companies are finding returned goods are crowding into space previously reserved for new products ready to be shipped out or put on the shelf.

Keeping these items in pristine condition is crucial. The retailer has already lost a profit on it, and the only hope for it to benefit the company is its ability to be sold at a discount elsewhere. But if keeping these items safe detracts from the functionality of the warehouse or storage space, the problem will affect more than just the returned goods.

Part of reverse supply chain management is having the capacity to store returns both safely, and out of the way of normal business. Mobile Mini can offer a unique solution to retailers struggling with the reverse supply chain. Retail storage containers can house returned purchases outside of the warehouse while still being kept safe and sound.

Weather resistant portable storage solutions will ensure inclement weather won’t get items wet or blown over, and a patented tri-cam locking system will keep these items out of the hands of thieves.