Reverse Logistics Startups Attract Investors from Venture Firms

The e-commerce industry is experiencing a surge in reverse logistics startups dedicated to processing online returns for retailers in a profitable way. These startups, such as Loop Returns and Two Boxes, have attracted around $200 million in venture capital investments. According to data from the National Retail Federation, last year alone, American consumers returned $212 billion worth of merchandise purchased online, which highlights the importance of making the returns process smoother and more profitable for retailers.

Traditional returns processes led to high costs for retailers, which can include shipping fees, handling fees, and inventory management. In addition, retailers incurred losses from returned goods that are no longer able to be sold as “new.” Processing returns was seen as a necessary evil but not a significant source of revenue. However, reverse logistics startups such as Loop Returns and Two Boxes are changing this paradigm by providing retailers with solutions that turn the returns process into a profitable aspect of their business.

Loop Returns is an e-commerce customer service platform that helps retailers incentivize customers to convert returns into repurchases. The startup offers a customizable returns portal that integrates with a retailer’s existing website, allowing customers to easily return products, while at the same time, enabling retailers to sell returned items. Loop Returns also provides customers with a detailed order history on the retail website, making it easier to learn from purchases and returns data to improve the overall customer experience.

Another company that is changing the game in the returns industry is Recurate. The startup helps retailers overcome losses from returns by enabling them to sell repurposed or refurbished inventory directly to consumers. This allows the retailer to capture sales that would otherwise be lost by selling in bulk to investors or recycling the products altogether.

Recurate also partners with brands to create “Takeback” programs that allow customers to resell their existing gear on the brand’s website. This gives customers a chance to put some money back in their pocket while giving the retailer the opportunity to recapture lost revenue. Moosejaw, a retailer for outdoor gear and clothing, integrated Recurate into their website this year, which means that customers can now sell their used items directly on Moosejaw’s website, creating a circular economy that benefits both customers and retailers.

In conclusion, the returns process can be a source of headaches for both customers and retailers. However, reverse logistics startups like Loop Returns and Two Boxes are revolutionizing the industry by turning the returns process into a profitable aspect of a retailer’s business. These solutions make it easier for customers to return products while enabling retailers to capture lost revenue by offering renewed or repurposed inventory. This is a win-win situation for both parties, making it easier for consumers to shop online without fear of losing money or being stuck with items they don’t want, while also boosting retailers’ bottom lines.