A lease for a 250K-plus SF reverse logistics center in Fort Worth is the latest evidence of a surge in returns amid the growing prevalence of e-commerce.
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The Oak Grove Road industrial distribution facility that will serve as the new home for goTRG will allow the company to expand its management services for returned and excess inventory, according to a news release from Cushman & Wakefield, which facilitated the lease. Nearly 200 new employees will be hired to work at the center.
The company manages returns for six of the top 10 largest retailers in North America — including Walmart, Amazon and Target — and resells items across a network of more than 20 secondary marketplaces.
“An additional presence in the South will allow goTRG to drive more value to our clients by being in closer proximity to their stores and distribution centers, thereby reducing transportation costs and shortening time to market for resaleable products,” CEO and founder Sender Shamiss said in a statement.
According to CBRE, online sales have a higher-than-average return rate. Reverse logistics provider Optoro estimates that at least $66.7B worth of products are returned during the holidays. And according to the National Retail Federation, an earlier-than-usual start to holiday shopping is partly behind its prediction that holiday online sales will see a 13% annual increase to $223.3B in 2021.
That means this holiday season is also likely to see a record number of returns, prompting a need for companies like goTRG to manage the influx of inventory going back into an already strained supply chain, according to CBRE.
Offering returns is expensive for retailers. According to Optoro, it now costs on average $33, or 66% of the price of a $50 item, to process a return, which represents an annual hike of almost 60% over last year.
But goTRG said it can make returns profitable for companies by identifying re-commerce channels. According to the company, it has recovered more than $3B for its clients.
The need for services provided by companies like goTRG is undeniable— according to Allied Market Research, the global reverse logistics market was valued at $635.6B in 2020 and is projected to reach $958.3B in 2028.
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