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Direct Response Marketing

Support Services: Refurbishing — Driving Revenue Through Returns

1 Mar, 2014 By: Andrea Stuhley Response

As long as products are being sold, there will always be returns. Buyer’s remorse, dissatisfaction or simply working the system are a few of the reasons that customers return. Returns can be controlled with effective product return strategies — the most important of which is product refurbishment.

Direct response and retail products, such as small electronics, ingestibles, cosmetics and even exercise equipment, can be refurbished. Statistics show that for every 10 returns, five to six products can be refurbished to be usable, profitable merchandise. Effective product return strategies can help result in increased revenues, lower costs and improved profitability.

A refurbishing product strategy can help lower costs and help recover potentially lost revenue. A fulfillment company should have the capability to put products back into inventory to help with cash flow and provide padding to the bottom line. The ability to refurbish returns can convert them into revenue because the company is adding additional units to their inventory to be sold at full price. Refurbishing returned goods and getting them back on the shelf quickly can also help if you are short on inventory — or even facing a backorder situation.

Although most fulfillment houses typically support returns, not all are specialists with product refurbishment. Refurbishing starts by partnering with a fulfillment company that services all of the back-end functions under one roof necessary to protect a marketer’s bottom line.

Fulfillment centers know current inventory, order volume and receiving dates from the manufacturer — and shipping costs — to provide analytics to the marketer so they can ensure proper supply per their demand.

An integrated fulfillment company not only offers convenience, efficiency and quick reporting but also cross-function cooperation, including a skilled workforce technically trained to refurbish a variety of consumer goods. Understanding the product and its components provides an idea of what can be salvaged to help result in cost savings.

Experts in refurbishing understand how to evaluate an opened product and the level of refurbishment necessary to repair the product. When adding refurbished product back into inventory, these specialists carefully review the lot number, batch date and expiration date so the product with the earliest expiration date is sold first, thus maintaining the longevity of the marketer’s product inventory.

Often times, the manufacturer of a product will team up with the fulfillment center and teach them the proper steps necessary to ensure the product can be resold. In many cases, there are strict guidelines that must be followed for refurbishing electronic products and exercise equipment. There are separate rules for ingestibles or cosmetics.

Some items that can be simply repackaged will return greater financial reward than items that must be completely refurbished prior to sale. Items that cannot be sold as new can be sold to other outlets, such as discounters and closeout websites.

When implemented correctly, your fulfillment company should be able to help you save costs, enhance revenue and utilize good inventory — all of which looks great on your bottom line. ■

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