Product comes back to your distribution center in many forms, including individual customer returns and consolidations/recalls. While you have a process to complete the financial transaction, is it challenging to process all the merchandise with the fluctuating volumes? More to the point, are you getting the most revenue possible for this merchandise?
Leaving merchandise on the warehouse shelf is like leaving money on the table.
Merchandise from individual customer returns and consolidations/recalls is often stored (and forgotten) in warehouses, liquidated or sold to jobbers. Or these assets may be thrown away and literally written off. The fact of the matter is, your company loses revenue when goods sit in your warehouse or distribution center. Assets that are warehoused and forgotten, liquidated or cast aside represent lost opportunities in potential revenue.
Two steps in the reverse logistics process repair and refurbishment present opportunities to increase revenue.
When you partner with a US-based quality control and refurbishment company to recondition merchandise, you gain the ability to transform lost sales opportunities into increased revenue. The goal of every third-party refurbisher such as my company, Darn It! is to get merchandise into first-quality condition, whether its apparel, jewelry, backpacks, totes, ballcaps, dishware, computer parts, or shoes. (And the list goes on!)
Clearly, units involved in customer returns and consolidations/recalls have been put through the wringer. But all is not lost. To recondition goods, retailers can turn to a quality-control and refurbishment company with expertise in merchandise inspection, repair, cleaning, kitting, reticketing and repackaging. Plus, many refurbishers offer the logistical skills, technology and space to manifest, inventory and warehouse your merchandise.
Once merchandise is returned to first-quality condition, you can immediately seek opportunities for enhanced revenue.
Here are 3 ideas:
1. Continue to sell refurbished merchandise on your website without needing to discount these goods as clearance items.
2. Recondition store recalls of spring merchandise to sell at full price during the following spring season.
3. For apparel, make slight alterations and continue selling at full price, for example, swap buttons to match the new clothing line. In fact, creative alterations can keep units in style and prompt ongoing sales. Retailers have asked us to add a ribbon for flair, adjust hem lines to stay on top of trends and even remove a fur collar from a winter sweater to sell in spring and summer.
Mini case studies: Examples of how quality-control and refurbishment activities add value.
Reconditioned 6,000 dog beds with a zipper problem
On every dog bed, opening the zipper tore the material. Our sewing repair team reinforced all 6,000 zippers.
Sorted 30,000 coffee mugs with glazing defects
We conducted a 100% visual inspection to sort out non-sellable goods to separate first-quality goods for sell.
Remedied 4,200 leather briefcases with a strong musty odor
We conducted a 100% visual inspection to sort briefcases. For those with a musty smell, we cleaned the mold and conducted an ozone shock treatment by placing the briefcases in our state-of-the-art ozone chamber.
Repaired 18,000 necklaces with loose beads
The necklaces had been distributed and were on display at the retailers 500 stores. When the retailer noticed beads were loose and falling off, the operations manager coordinated a direct-ship recall from all stores to our facility. We inspected and sorted necklaces, repaired those with loose beads, and shipped the jewelry back to the retail stores.
Reticketed and repackaged goods
A manufacturer asked us to reticket 27,000 items with new price tickets for the companys clearance website.
Returned goods to first-quality condition by sewing
We added the missing buttonhole on the shape-keeper for 1,000 baseball caps. We replaced a red drawcord on store recalls of 8,000 pajama bottoms (customers complained that the red dye was bleeding and staining the pajamas). We repaired and reinforced improperly sewn arm holes on 5,000 mens sleeveless shirts (the retailer discovered the issue, which prompted a store recall).
Use this 10-point checklist to research a quality-control and refurbishment company to recondition your merchandise.
1. Returns processing/reverse logistics
Whether its individual customer returns, consolidated returns or end-of-season store recalls, these units can be inspected, repaired and repackaged to be first-quality product. The refurbishment company should offer quality-control processes, sophisticated warehousing software and a highly trained team to handle your reverse logistics, whether its individual customer returns or a massive recall action from hundreds of retail outlets.
Returned units and store recalls often necessitate repackaging and reticketing. Youll want to team with a quality-control company that will ensure your reconditioned merchandise has the right packaging and accurate tickets.
3. Visual inspection and sorting
A refurbishment company with an experienced, trained team (and an eye for details) can help you get first-quality goods back on the shelves as quickly as possible.
Small yet mighty, labels must have accurate content and be placed correctly. One option for apparel is using heat transfer labels to update garments, add decoration and cover up wrong size information.
5. Sewing repairs for clothing, shoes, briefcases, etc.
Beyond buttons, the sewing staff must be skilled in a variety of tasks including reinforcing stress points, closing open seams, adjusting hems and so forth.
6. Apparel part/trim replacement
Consider swapping out trim to update and refresh an out-of-season item. Apparel part and trim replacement often includes repairing or replacing zippers, snaps, buttons and other parts.
7. Merchandise cleaning
From grease to rust, a surprising variety of stains and soiling can be treated via spot cleaning, laundering or dry cleaning. Look for a refurbisher that has the know-how to tackle stubborn stains on a variety of general merchandise.
8. Mold and mildew removal
When stored in a warehouse or distribution center, some merchandise can take on a musty smell. Look for a quality-control and refurbishment company with an on-site ozone shock treatment chamber to transform musty clothing and other goods (ballcaps, backpacks, tents, totes, etc.) into first-quality product.
9. Warehouse Management System (WMS) inventory logistics
The vendor should offer third-party warehouse and fulfillment services equipped with a state-of-the-art software system that gives you a real-time window into your inventory. Look for a company that uses inventory management technology that offers ASN, XML, EDI, and UCC-128 capabilities and real-time reporting.
10. Warehouse, fulfillment and distribution
With a 3PL partner offering warehouse, fulfillment and distribution services, this means they maintain the storage space and staffing so you dont have to. You wont have to worry about seasonal fluctuations that can impact staffing levels and storage space.
Reconditioning merchandise ensures you create value from returns.
Remember, leaving merchandise on a warehouse shelf is like leaving money on the table. The solution is teaming with a quality-control and refurbishment company that delivers a skilled workforce, sophisticated logistical processes and experience in reverse logistics. Seek out a US-based refurbisher that will partner with you on two critical steps in the reverse logistics process: repair and refurbishment. Reconditioning your merchandise directly impacts your ability to increase revenue.
Jeff Glassman is CEO of Darn It! Inc., a quality-control and refurbishment company specializing in merchandise inspection, repair, cleaning, kitting, and warehousing (www.DarnIt.com). Jeff can be reached at Jeff@DarnIt.com or (508) 999-4584.