Whether you operate an ecommerce store or a brick-and-mortar shop, handling too many returns and exchanges will eat into your company’s productivity and profit margins. Unfortunately, poor return-to-vendor management will cause problems with your supply chain and profits.
But what exactly does return-to-vendor mean? At Streamline Fulfillment, we help with everything from decoupling inventory to returned merchandise from retailers. Here’s what you should know about RTV.
What’s the Meaning of “Return-to-Vendor”?
Return-to-vendor is one of many supply chain management processes. It involves returning goods or materials from retailers to the product’s original vendor. This process is essential for robust inventory management and minimizing financial losses.
RTV is necessary for multiple reasons, such as:
- Unloading defective, damaged, or incorrect items
- Getting rid of seasonal items that don’t sell
- Managing overstock due to a lack of sales
- Returning products under warranty for repair or replacement
Key Steps in the RTV Process
Knowing how to handle an RTV process efficiently is crucial for good supply chain management. Here are the general steps to remember once a return triggers the process.
1. Communication Between the Buyer and Supplier
The RTV process starts when a consumer consults their vendor about a problematic product. Depending on the agreement between both parties, the supplier may request a return merchandise authorization, which allows the retailer to document why they need the return. The vendor will approve or deny the return.
2. Managing the Return of Merchandise
If the manufacturer approves the return of goods, the buyer will pack everything up and ship it out. Sometimes, the supplier will provide a return shipping label to cover shipment costs. The consumer may still need to pay the vendor restocking fees.
3. Resolving the Issue
Once the vendor gets the merchandise, they’ll determine if it qualifies for a return through a detailed assessment. They’ll then resolve the issue through:
- Refunds
- Exchanges
- Vendor credit
- Replacements or repairs for items under warranty
Why RTV Is Vital in Retail and Supply Chain Management
RTV is an aspect of both supply change and retail management. Technological improvements and advancements like automation software streamline operations, making it easier for clients to request refunds and exchanges for unwanted goods.
The return-to-vendor process offers the following benefits for retailers and wholesalers :
- Strong Vendor-Consumer Relationships. When a solid RTV agreement is in place, buyers are less likely to seek new vendors because they trust their suppliers’ product quality and responsiveness.
- Efficient Operations. Suppliers can handle product returns more quickly and efficiently, improving productivity.
- Reductions in Shipping and Holding Costs. Businesses can minimize financial losses for unsold or unsellable goods with cost-effective return processes.
- Less Overstock. Retailers and wholesalers can quickly make room for high-demand goods in their stores and warehouses by swiftly returning unwanted goods.
Enhance Your RTV Process With Streamline Fulfillment
Interested in improving warehouse operations or your business’s return-to-vendor process? We at Streamline Fulfillment can help. As a third-party fulfillment center with warehouses throughout California and the Pacific Northwest, we offer tailored warehousing services, hassle-free order fulfillment, and more.
Let Streamline Fulfillment take your RTV processes to the next level — call (509) 888-2880 today for more information.