DEFINITION of 'Reverse Fulfillment'

The portion of the supply chain that moves returned products back from the customer to the manufacturer. Although firms would prefer otherwise, returns are a fact of life for virtually all firms. In some cases, the processing, evaluation and shipping of returned products can be a costly component of doing business. Thus, maximizing the efficiency of reverse fulfillment activities can become very important for profitability.

BREAKING DOWN 'Reverse Fulfillment'

Just because a product is returned does not mean that it should be discarded. In many cases, the item may be fully or partially salvageable for later resale. For example, manufacturers may be able to provide minor repairs to some units and sell recertified units for a slight discount or use parts for alternative purposes. Returned units which are too badly damaged can by disassembled, and their unbroken components can be reused in new products.

RELATED TERMS
  1. Supply Chain

    The network created amongst different companies producing, handling ...
  2. Production Cost

    A cost incurred by a business when manufacturing a good or producing ...
  3. Return

    The gain or loss of a security in a particular period. The return ...
  4. Mean Return

    1. In securities analysis, it is the expected value, or mean, ...
  5. Negative Return

    This occurs when a company or business has a financial loss or ...
  6. Purchase Order Lead Time

    The number of days from when a company buys the production inputs ...
Related Articles
  1. Small Business

    Explaining the Supply Chain

    A supply chain is the cumulative network involved in moving raw materials, components and finished products from original suppliers to end users.
  2. Small Business

    The Basics Of Value Chain Analysis

    Value chain analysis establishes an action plan to understand and implement actvities that create values to a firm's clients, resulting in firm profits.
  3. Financial Advisor

    How to Create a New Financial Product in 10 Steps

    The 10 steps outlined here are essential to the creation of a new financial product.
  4. Investing

    Explaining the Value Chain

    A model of how businesses receive raw materials as input, add value to the raw materials, and sell finished products to customers.
  5. Investing

    Explaining Expected Return

    The expected return is a tool used to determine whether or not an investment has a positive or negative average net outcome.
  6. Investing

    Major Companies That Lose Money On Shipping (AMZN)

    We look at some of the big companies in the home delivery business that have high shipping costs and how they mitigate this.
  7. Investing

    Understanding Marginal Cost of Production

    Marginal cost of production is an economics term that refers to the change in production costs resulting from producing one more unit.
  8. Insights

    What It Takes To Be "Made In The USA"

    Discover the rules and standards behind the "Made in the USA" label.
  9. Small Business

    Understanding Marketing

    Marketing includes all of the activities of a company associated with buying and selling a product or service.
  10. Investing

    Vital Link: Manufacturing And Economic Recovery

    Manufacturing output is one of the clearest signs that an economy is recovering from a recession.
RELATED FAQS
  1. Is there any way to reverse the law of diminishing marginal returns?

    Learn more about how consumer spending, supply and demand impact production decisions. Find out more about the law of diminishing ... Read Answer >>
  2. What is the difference between a value chain and a supply chain?

    Understand the difference between a value chain and a supply chain. Learn why a company would want to maximize the value ... Read Answer >>
  3. What is the difference between supply chain management and value chain management ...

    Discover what the principal differences are between utilizing a supply chain management system and a value chain management ... Read Answer >>
  4. Does the law of diminishing marginal returns only apply to labor?

    Learn more about how the law of diminishing returns is used by economists and businesses. Find out more about the laws of ... Read Answer >>
  5. How can you calculate diminishing marginal returns in Excel?

    Learn more about production costs and applying the law of diminishing marginal returns using Excel. Find out more about how ... Read Answer >>
  6. Does gross profit account for sales returns?

    Discover how accountants record the return of a saleable item and how that might impact the gross profit for a firm, either ... Read Answer >>
Hot Definitions
  1. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  2. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  3. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  4. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  5. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
  6. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
Trading Center