Reverse Logistics for Clothing: Finding Cost Saving Opportunities
Scott Hothem • September 28, 2015
There’s an old adage in sports, specifically football, that “defense wins championships”. The truth is that while defense is inherently important, the best teams are complete on both sides of the ball. Any team that ignores one aspect for the other can doom their season. The same is true when it comes to logistics. A company that is solely focused on forward logistics with little strategy for reverse logistics can leave a lot of money on the table.
Competition and market factors across all industries have grown in complexity with the rise of e-commerce. In fact, due to the increase in online shopping, there is a corresponding increase in the number of product returns. A recent study by Cognizant shows that up to 40% of clothing orders from last year’s holiday season resulted in a return. This can create a significant cost when the goal of most supply chains is to create efficiencies to meet these new challenges.
Many companies are beginning to give added focus on reverse logistics to create more cost savings. This lesser known side of the supply chain can account for one percent of overall costs if managed well and as much as 10% if managed poorly. Some of the common problems that create the scenario for a product return include:
- Inaccurate counting
- Delays
- Inaccurate paperwork
- Mishandling in the warehouse, truck or destination
- Misloading
- Damaged products
- Unwanted products
There are two ways to optimize the supply chain that will streamline the reverse logistics process in order to prevent these scenarios from happening as often, if at all, or being as costly to correct.
- Research: Discovering where your pain points lie in the returns process is the first step to creating a solution. This root cause analysis can spur updates and operational changes. It is key to determine:
- Do product purchases exceed consumer demand?
- Are you shipping too much?
- Are you shipping at the wrong time?
- Did the shelf life expire?
- Was the packaging ineffective?
When these questions, among others, can be answered, improvements in shipping processes and systems can be made as well as order and performance management.
- Recapture Income: Of course when you ship and sell a product it creates revenue, and when that order is returned, you lose that revenue. So reducing returns and having the ability to efficiently return these orders to the supply chain where they can generate revenue has an immediate impact on supply chain cost. By maximizing the profitability of these items through: repacking, refreshing and returning to inventory, revenue is increased and costs are lowered.
By focusing on reverse logistics, significant cost savings can be found. By reducing the number of returns through better supply chain management and creating a strategy to efficiently and effectively return these products to stock to be resold, your logistics costs will decrease while your revenue increases.
For over 70 years Barrett Distribution Centers has been helping clothing manufacturers create supply solutions and better manage their reverse supply chains.
Recent Blog Posts
There is something pretty cool about opening The Wall Street Journal and seeing products from a Barrett partner right in the middle of the story. And in this case, we mean literally cool . A recent Wall Street Journal feature took readers into the reality of working long hours in extreme summer heat and shared some of the tricks people use to make those days a little more manageable. Among the ice chests, hydration, and other summer essentials were cooling hats, sleeves, and towels from MISSION , a Barrett Distribution Centers partner. MISSION in Action MISSION creates cooling products for the moments when escaping the heat is not always an option. Its wearable cooling gear is designed to be activated with water and provide cooling relief, making it particularly useful for people spending long stretches of time outside. Seeing those products featured by The Wall Street Journal is exciting because it shows them exactly where they are meant to be: out in the real world, helping people get through seriously hot days. For us at Barrett, stories like this hit a little differently. We spend our days receiving, storing, picking, packing, and shipping products for the brands we support. Inside the warehouse, every item has a SKU, a location, and an order attached to it. But once it leaves our building, it becomes something much more personal. It might become the cooling towel someone reaches for halfway through a scorching workday or the hat that helps make another hour outside a little more comfortable. That is the part of fulfillment we love seeing. Proud to Be Part of the Story We are incredibly proud to partner with brands like MISSION and even more excited when we get to see their products receiving recognition on a stage as big as The Wall Street Journal. The warehouse may be where our part of the journey happens, but it is certainly not where the story ends. Sometimes it ends with a package arriving at someone's front door. And sometimes it ends with a Barrett partner helping someone beat the summer heat and landing in The Wall Street Journal along the way. Pretty cool, MISSION. FULL ARTICLE HERE
The orders are coming in faster than expected. Your best seller is disappearing from inventory, a holiday promotion performed better than anyone predicted, and suddenly your biggest concern is not generating more sales. It is keeping up with the ones you already have. Exceeding your holiday forecast is exciting. It is also one of the fastest ways to test whether your fulfillment operation is truly prepared for growth. When More Orders Change the Plan A holiday forecast helps your 3PL prepare for expected demand, but customers do not always follow the forecast. A product can take off unexpectedly, an influencer can create a sudden rush, or a promotion can perform far beyond expectations. When that happens, the impact reaches much further than order volume. Inventory moves faster. More people may be needed to pick and pack orders. Packaging materials disappear sooner. Carrier volume increases. Receiving becomes more important if additional inventory is on the way. The challenge is keeping all of those pieces moving together without allowing the customer experience to suffer. Talk About the “What If” Before Peak Your peak season conversation should include what happens if sales are significantly higher than expected. Before the rush begins, make sure you and your 3PL have discussed: How much additional volume the operation can accommodate Which products are most likely to sell quickly How additional inventory will be received Upcoming promotions and product launches Whether extra packaging materials are available How custom packaging, gift messages, inserts, and kits will be maintained Who communicates with whom when forecasts start changing You may never need the backup plan. But holiday peak is a much better time to use one than create one. Do Not Let Growth Change the Customer Experience When orders surge, speed naturally gets more attention. Quality still matters just as much. Your customer does not know that your holiday promotion exceeded expectations or that thousands of other packages are leaving the warehouse that day. They know whether their order was correct, carefully packed, and delivered as expected. A successful peak season is not simply about getting through more orders. It is about handling growth while preserving the experience that helped customers choose your brand in the first place. Preparing for the Unexpected With Barrett At Barrett Distribution Centers, peak preparation starts with understanding each brand and what a successful season looks like for them. Our teams work closely with customers to prepare for changing order volume, inventory needs, special projects, and the details that still need attention when things get busy. With experience supporting growing ecommerce and omnichannel brands, Barrett is built to help customers navigate the moments when demand moves beyond the original plan. Because when sales exceed expectations, your fulfillment partner should be ready to grow with the opportunity, not become the reason you have to slow down. You cannot predict exactly how successful your holiday season will be. You can prepare for the possibility that it becomes much bigger than planned. Because exceeding your forecast should create excitement, not a fulfillment problem.
When people talk about seasonality in ecommerce, the conversation almost always gravitates toward the holidays. Black Friday arrives, orders climb, warehouses get busier, and brands prepare for what is often considered the most demanding stretch of the year. But not every brand follows the holiday calendar. For a swimwear company, summer might be the busiest period of the year. An apparel brand could experience significant demand around a product launch or seasonal collection. Other businesses may see sharp increases tied to promotions, retailer orders, or events that have very little to do with November and December. For Harrison Smith, Director of Commercial Revenue at Barrett Distribution Centers, understanding those patterns is an important part of understanding the business itself. “When I work with brands, I wanna understand everything about the business,” Harrison explained. Every Brand Has Its Own Rhythm Harrison has spent about 20 years in the 3PL industry and has been with Barrett for roughly four and a half years. His role touches pricing, transportation, new business, and existing customer relationships, which means much of his work begins with understanding how a company actually operates. That includes looking beyond annual order totals. “I wanna understand everything about the business,” Harrison said. “It’s looking at yearly trends, looking at within the year, what does that look like? Do you have those peaks?” Those peaks tell a story. A brand might look relatively consistent when viewed across an entire year, but a closer look could reveal several weeks when order volume changes dramatically. Understanding when those moments occur can influence when inventory needs to arrive and what the fulfillment operation needs to be prepared to handle. As Harrison puts it, “ When do you need to bring your inventory in to service that holiday peak, or is it a summer peak because you sell swimsuits or whatever it might be?” The important part is not whether your peak happens during the holidays. It is whether you and your fulfillment partner understand when it happens and what it means for your business. Better Data Creates a Clearer Picture Seasonality is also one of the reasons Barrett asks brands for detailed information during the pricing and solutions process. Order history, inventory patterns, volume changes, and previous peaks help paint a much clearer picture than an annual average ever could. The more complete that picture becomes, the easier it is to understand what supporting the brand will actually require. “The better the data, the better our pricing,” Harrison explained. When information is incomplete, assumptions have to fill the gaps. Harrison notes that those assumptions naturally tend to be conservative because a 3PL has to prepare for what the operation might require. Better information allows the conversation to become much more specific to the business in front of you. That is why understanding your own seasonality matters before you ever reach the busiest week of your year. Plan Around Your Peak, Not Everyone Else’s Peak season should not be defined by the calendar. It should be defined by your customers. For some brands, that means preparing for the holidays. For others, the most important months could arrive much earlier. What matters is recognizing those patterns early enough to prepare inventory and have meaningful conversations with the people responsible for fulfilling your orders. At Barrett, that starts with curiosity about the individual business rather than assuming every customer behaves the same way. Because your busiest season does not have to be Q4 to deserve a plan. Whenever your customers are ready to buy, your fulfillment operation should be ready for them.
