Fashion Terms — the Apparel Search fashion terminology directory
Reverse logistics covers all operations related to the reuse of products and materials: moving goods from their typical final destination for the purpose of capturing value, or proper disposal, including remanufacturing and refurbishing. In apparel, when a retail store returns damaged garments to a wholesaler, or a customer returns a defective product, the testing, refurbishing, dismantling, repairing, recycling or disposing that follows is reverse logistics.
Reverse logistics is regarding all operations related to the reuse of products and materials. According to Wikipedia, “it is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Remanufacturing and refurbishing activities also may be included in the definition of reverse logistics." When a manufacturer's product such as clothing, shoes, handbags, or accessories normally moves through the supply chain network, the ultimate destination is a clothing store or a consumer. If the product for some reason has to return in the opposite direction of the supply chain, it would be reverse logistics. For example, if the retail store found garments to have damages, they may require the wholesaler to take back the merchandise. The process of returning the clothes to the distributor is part of the reverse logistics process.
Any process or management after the sale of the product involves reverse logistics. If the product is defective, the customer would return the product. The manufacturing firm would then have to organize shipping of the defective product, testing the product, refurbishing, dismantling, repairing, recycling or disposing the product. The product would travel in reverse through the supply chain network in order to retain any use from the defective product. The logistics for such matters is reverse logistics.
In the apparel industry, goods are sometimes distributed to downstream members in the supply chain with the understanding that the goods may be returned for credit if they are not sold. This is determined on a case by case basis between the buyer and seller of the product. This acts as an incentive for clothing stores to carry more stock, because the risk of obsolescence is borne by the upstream supply chain members (the wholesaler or manufacturer). However, there is also a distinct risk attached to this logistics concept. The downstream member in the supply chain might exploit the situation by ordering more stock than is required and returning large volumes. This can help a retailer but hurt a wholesaler or manufacturer. In this case, the supplier (wholesaler or manufacturer) effectively finances the inventory for the downstream member. In addition, when the product is returned, they would have to figure out a new way to sell off the inventory.
In addition to the return of clothing, reverse logistic is used for other purposes. Examples include reusable pallets, tote boxes, shipping containers, clothing hangers, etc.
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A returned garment's journey shows why reverse logistics is a discipline of its own rather than ordinary shipping in reverse. The process starts with authorization and transport — the return is agreed, identified and moved back to a distributor or manufacturer. Then comes the decision stage that forward logistics never faces: the product must be tested and graded, because its condition is unknown. Depending on that grading, the item is refurbished or repaired for resale, dismantled for parts or materials, recycled, or disposed of — four different destinations with four different economics, decided item by item. Service providers specializing in reverse logistics, and third-party logistics companies, exist because most fashion businesses cannot run that grading-and-disposition operation efficiently at their own scale.
The commercial terms underneath the flow matter as much as the transport. Apparel is often distributed with return-for-credit arrangements on unsold goods, which shift the risk of obsolescence upstream to the wholesaler or manufacturer and encourage retailers to stock deeply. Managed well, that arrangement sells more clothing overall; managed loosely, it invites over-ordering, with the supplier financing the retailer's inventory and absorbing large volumes of returns that must be resold through other channels. The return authorization is the control point where the two sides agree what may come back and on what terms.
Reverse logistics also has an environmental ledger. Every garment refurbished and resold is a garment not manufactured new and not landfilled; every pallet, tote and hanger recovered is packaging that does not need replacing. That is why the term sits alongside refurbishing and recycling in this directory: the backward chain is where the apparel industry recovers value — financial and material — from the products it has already made, instead of treating everything past the point of sale as waste.
You may want to visit our Apparel Logistics & Returns Management Guide.
Ordinary logistics moves a product forward through the supply chain to a store or consumer. Reverse logistics is any process after the sale that moves product in the opposite direction — returns, defective goods going back for testing and repair, and materials being recovered, recycled or disposed of.
Goods are sometimes supplied with the understanding that unsold stock may be returned for credit, which encourages stores to carry more stock. The risk is exploitation: a downstream member may order more than required and return large volumes, so the supplier effectively finances the retailer's inventory and must resell the returns.
Reusable transport items: pallets, tote boxes, shipping containers and clothing hangers all travel back through the supply chain for reuse, alongside returned and defective merchandise.