Charlie Walker, head of marketing at fulfilment operator Walker Logistics, comments on recent news coverage of excessive wastage of unsold stock in the UK by online retailer Amazon.
ITV News recently broadcast a report that was highly critical of the online giant Amazon for "destroying millions of items of unsold stock every year".
At Amazon’s Dunfermline warehouse, the news programme reported, "products that are often new and unused are thrown into vast bins, carried away by lorries and dumped at either recycling centres or a landfill site."
The products had never been sold, or were 'returns' – goods that had been sent back to the warehouse after the purchaser had decided that they were not suitable.
"Almost all could have been redistributed to charities or those in need," ITV News further opined.
Products end up being destroyed in this way for the simple reason that the longer the goods held in an Amazon warehouse remain unsold, the more the vendor company is charged for storing them. So, it eventually becomes cheaper to dispose of them than it is to continue storing the stock.
Third party logistics (3PL) services companies can play a key role when it comes to ensuring that their clients’ losses from stock returns, obsolescence or deterioration are minimised.
For example, effective and ongoing stock management routines will allow a 3PL to highlight any stored lines that are approaching their ‘best before’ dates in time to enable the client to find a buyer before it is too late.
If the 3PL has contacts within the market in which its client operates, it might even be able to help identify an outlet for some ageing stock. Walker Logistics, for example, works with a number of companies in the cosmetics space and when one recently faced the prospect of being stuck with a significant quantity of non-saleable merchandise we were able to introduce the client to a major discount retailer and a deal was agreed for the sale of the goods.
And, with, for example, more than 30 per cent of all the clothing ordered online estimated to be returned, it is essential that retailers and their logistics partners have efficient networks in place to process inventory as it comes back to the business.
Of course, while asset control procedures will reduce the need to destroy goods, factors such as production or packaging errors, product recall or, simply, a product’s failure to sell, will sometimes make destruction and disposal unavoidable.
Reputable 3PLs offer comprehensive and secure destruction services with audit trails and all the relevant paperwork that demonstrate that products have been disposed of in the most ethical and environmentally friendly way.
All companies should strive to avoid unnecessary waste but a culture of disposal can all too easily emerge in many businesses - and particularly larger ones managing huge amounts of inventory.