How Does E-commerce Inventory Management Improve The Returns Process?

With the volume of orders placed through the e-commerce channel growing rapidly for wholesale distributors, so is the number of returns. According to an article on the DC Velocity website, warehouses and distribution centers need to have a superior e-commerce inventory management system to handle the variety of returns and to successfully manage “reverse logistics” in a world where e-commerce is so prevalent.

Wholesale distributors are moving to implement omni-channel solutions to capture the growing demand for an e-commerce option in the marketplace. Consequently, warehouses and distribution centers are now receiving returned orders not only from their brick-and-mortar stores, but also from their e-commerce customers.

They’re finding the process to be very different in many cases. For example, e-commerce returns can come in varying sizes or quantities and will often remain in the original packaging. Additionally, items of all types may be received at one distribution center.

“They may be similar — shirts in different sizes or colors, say — or if the e-tailer offers a wide assortment of items for sale, they might be completely different products with wildly diverse handling characteristics,” the article states.

Online customers will often intentionally buy several items of different sizes or characteristics knowing full well they will be returning the unused merchandise freely and without hassle. This, in fact, is one of the primary reasons so many customers prefer to shop online.

Knowing this, distributors must implement efficient e-commerce inventory management so they can continue to offer their customers the easy return policy that is now in serious demand. Things can get even more complex when online customers want to return merchandise to a brick-and-mortar outlet.

“When that happens, the store staff must accept an SKU that is not in their system, be able to track its whereabouts, and make decisions about its disposition based on the retailer’s policies,” says Carrie Parris, director of corporate strategy at UPS.

It is best practice for all inventory sold by retail and e-tail outlets to be managed from one database. This will allow distribution center employees to access and manage product and order data from a single retail and e-commerce inventory management portal. Ideally, this system will also house return policies along with product photos and descriptions.

“The best [systems] incorporate not just the retailer’s product database but also photos and detailed descriptions of each SKU. The systems also include the retailer’s business rules regarding the disposition of returned items based on value, condition, and other considerations,” according to the article.

Storing all of this data in one, integrated e-commerce inventory management system means the distributor will be able to recover more value in the returns process.

Source: DC Velocity, October 2013