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Don't Get Burned on Retail Returns

DON'T GET BURNED ON RETAIL RETURNS: REVERSE LOGISTICS OF REFURBISHED ELECTRONICS PRODUCT RETURNS COST THE ELECTRONICS INDUSTRY BETWEEN $14-16 BILLION EVERY YEAR COST OF HANDLING CUSTOMER REASONS WHY CUSTOMERS ELECTRONIC RETURNS RETURN PRODUCTS 5% "DEFECTIVE" nl 5-6% RETURN RATE FOR 27% "BUYER'S REMORSE" OF TOTAL CONSUMER D00 000 ELECTRONICS REVENUE IS SPENT DEVICES IS BY MANUFACTURERS 68% "NO TROUBLE FOUND" 11-20% (PRODUCT FRUSTRATION) EE 2-3% AND RISING 95% OF UNITS CAN BE REFURBISHED FOR REUSE. OF TOTAL REVENUE IS SPENT BY RETAILERS RETAILERS AND MANUFACTURERS ARE LEFT WITH BILLIONS OF WORKING, YET NO LONGER "BRAND NEW", ELECTRONICS COSTLY MISTAKES: LIQUIDATION SALE SELL EVERYTHING LACK OF SPENDING MORE ON FIXING & SHIPPING THAN PRODUCTS "AS-IS" RESALE CH ANNELS ARE WORTH SMT WTFS XIxIxIx Xxx SELF-COMPETITION IN PRIMARY VS SECONDARY MARKETS POOR FORECASTING & REPORTING ON PRODUCTIVITY OR CAPACITY E-WASTE LIABILITY NO CHAIN OF CUSTODY, NO DOCUMENTATION ON CHAIN OF CUSTODY RETAILERS/MANUFACTURERS OFFSET RETURN LOSSES BY RESELLING IN THE SECONDARY MARKET "SECONDARY MARKET ELECTRONICS DEPENDING ON REFURBISHED SALES REPRESENT AN ESTIMATED CONDITION, THE AVERAGE ELECTRONIC RESALE PRICE IS $15 BILLION (PER YEAR) 35% - 75% MARKET IN THE UNITED STATES." OF THE ORIGINAL VALUE. 15 %3D 35% 75% ORIGINAL THAT'S EQUAL APPLE'S TOTAL APP VALUE STORE PROFITS SINCE 2008. WHO IS MOST LIKELY TO PURCHASE REFURBISHED ELECTRONICS? MOST LIKELY TO PURCHASE REFURBISHED PHONE EMERGING MARKETS MANY CANNOT AFFORD NEW DEVICES DEMOGRAPHICS: GLOBAL POPULATION DEVICE OWNERSHIP: 6% OWN TABLET YOUNG MALE 20% OWN A PC 22% OWN A SMARTPHONE URBAN MIDDLE CLASS RETAIL ADVANTAGES: SELLING THE BASKET NEW SMARTPHONE OWNERS NEED NEW ACCESSORIES SELLING THE BASKET: PHONES REQUIRE ACCESSORIES: P009 CASE: STEREO DOCK: AV ADAPTORS: HEADPHONES: $50 $100 $30 $30 CAR CHARGER: ARMBAND: BATTERY EXTENDED $10 $10 PACK: WARRANTY: $50 $5 PER MONTH RESALE REQUIRES REVERSE LOGISTICS AND REFURBISHMENT CAPABILITY REVERSE LOGISTICS: OPTIMIZED AFTERMARKET ACTIVITY TO RECOVER THE MAXIMUM VALUE FROMA PRODUCT AFTER THE INTIAL POINT OF SALE SUPPLY CHAIN: REVERSE LOGISTICS: 2. 1. Raw materials 2. Shipped to manufacturer 3. Item shipped to retailers 1. Items returned variety of conditions. retailer/manufacturer in a 2. Companies only refurbish to the level investment 4. Item in consumer's hand can be recouped. This will create A/B/C grade, refurbished units. REVERSE LOGISTICS COSTS ARE LESS THAN 3. Recovery is maximized by having customers for refurbished units. This prevents all grades of price erosion caused by over saturating a single 4% OF TOTAL SUPPLY CHAIN COSTS FOR MOST price grade or customer capacity. 4. Unfixable units are harvested for working parts COMPANIES, WHEN DONE RIGHT. TOTAL SUPPLY CHAIN COSTS and then recycled for reuse in the manufacturing REVERSE LOGISTICS COSTS process. SOURCES: itu.int/net/pressoffice/stats/2010/06 ups.com/media/en/Reverse_Logistics_wp.pdf caba.org/resources/Documents/IS-2009-03.pdf onprocess.com/CR2013/return-rates-Whitepaper.pdf ebnonline.com/author.asp?section_id=1062&doc_id=258324 forbes.com/sites/kellyclay/2012/09/12/the-real-cost-of-an-iphone-5 freep.com/article/20140506/BUSINESS0103/305060128/Fiat-Chrysler-Maserati pewglobal.org/2014/02/13/emerging-nations-embrace-internet-mobile-technology businessinsider.com/smartphone-and-tablet-penetration-2013-10#ixzz31XdoXBoB computerandvideogames.com/444225/ios-app-store-has-brought-in-15-billion-for-developers-apple-says accenture.com/SiteCollectionDocuments/PDF/Accenture-Reducing-the-Quantity-and-Cost-of-CustomerReturns.pdf THE RECON GROUP INC

Don't Get Burned on Retail Returns

shared by NowSourcing on Jun 02
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This infographic takes a look at the reverse logistics of refurbished electronics.

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