Managing the Reverse-Logistics Pipeline

Amazon’s distribution center near Baltimore; e-commerce has given rise to a busy reverse logistics pipeline. (Photo: Amazon)

LOS ANGELES—With double-digit growth each year, e-commerce has represented an increasingly significant share of holiday retail sales in recent years. But as the volume of goods shipped from warehouses increases, the reverse is also true as the goods travel in the other direction. CBRE estimates that the total value of returned goods bought online this holiday season will range from $14 billion to nearly $29 billion, or nearly one-third of the $95 billion in sales volume predicted for 2016 by eMarketer.

A tally like that has major implications for both retail and industrial. Online merchants’ ability to recapture the value of returned merchandise depends on their management of reverse logistics. That extends to not only the speed of returns but also the costs associated with receiving them.