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Product Collection System

Once the product location is identified, the collection mechanism gets into operation.

This can be done either through company’s field force, channel members or third party. However, proper instructions have to be given to motivate the customer for returning the products.

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Third parties are often used if it is not an area of expertise for a company and the third party can do it cheaper and more efficiently.

For example, “ Best Buy [a major electronics retailer] created a business unit…to focus on developing sales of consumer electronics into the secondary markets…No longer was the handling of customer returns, return to vendor and overstock a cost center sitting in a dark corner, but now it was transformed into a profit center…at Best Buy, maximizing profit in the reverse logistics business is involving partnerships with both new and existing customers as well as manufacturers and third party service providers (3PSPs).

Online stores & Auctions – with product testing, inventory management, listing, payment collection and order fulfillment, Best Buy has built an integrated supply chain to take returned product from the stores and resell it to its value-seeking customers through eBay, a private online store and other online channels. Best Buy recently acquired Dealtree, its provider of these services.

Trade-in, an online program was launched in 2007, offering customers a fast and easy alternative to selling online themselves, or just letting working products sit in a drawer. It allows customers to recapture economic value, and through the Dealtree technology, Best Buy has instant access to current market value of products.

Refurbishment – working with a variety of 3PSPs, Best Buy has been integrating refurbished products into its warranty replacement program and selling direct to consumers.

Recycling – in 2008, Best Buy began testing offering free recycling in several markets. They have been building up a network of local certified recyclers and plan to roll nationwide in 2009.”

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