How effective packaging drives successful automotive aftermarket reverse logistics

Fueled by accelerating online parts and accessories sales, the automotive aftermarket is experiencing unprecedented growth. The Automotive Aftermarket Industry Association (AAIA) estimates this sector to have accumulated nearly $308 billion in sales in 2012, a nearly four percent increase from 2011.

These recent market trends have led many businesses, manufacturers and retailers to focus on improving their reverse logistics procedures to reduce costs, streamline operations and reclaim value on parts that can be refurbished, reused and resold.

The expanding market, renewed emphasis on efficient reverse logistics and growth of online purchasing make packaging a more important consideration. Businesses selling aftermarket products must prioritize limiting potential product damage during shipping. Those who integrate packaging considerations into their returns strategies will be best positioned to benefit.

Automotive parts are infinitely differentiated in shape and size. Fortunately for the aftermarket products industry, packaging choices offer similar differentiation by function (void-fill, blocking and bracing, and cushioning to name a few) and material (foam, inflatable film, paper, etc.). This variety ensures there is an optimized packaging solution for nearly every need.

Keeping these core criteria in mind while evaluating packaging enhancements will help your team find the right materials for your business needs, and enable you to achieve the true value of packaging early. Consider these tips a way to help your team move forward while going in reverse!

Define your investment

The majority of automotive return costs stem from transporting, refurbishing and repairing, dismantling, repackaging and reshipping, and restocking parts. While product damage during any of these stages is considered a cost of doing business, evaluating the levels of packaging necessary to protect goods throughout the reverse logistics process up front can ultimately minimize losses.

Any evaluation should consider the potential impact and costs of product damage in view of the manufacturing and labor associated with creating, shipping and processing returns and reorders with new items or reimbursements. For some companies, a larger investment in packaging during the latter stages drives value by reducing labor and time expenses to address potential returns – resources that can instead be used to expand business in other areas. Once businesses have a clearer scope of their needs, they can work with packaging partners to select and implement sufficient materials.

Find the right materials

Identifying a customized packaging solution for each aftermarket product would be a daunting and likely unnecessary task. Grouping parts by size or commodity, and assigning packaging materials to each, can reduce much of the complexity.

As online business takes a larger share of the automotive aftermarket, orders are often made by less experienced individuals, making returns more likely. This means that packaging solutions designed to protect individual items may have to perform during multiple trips. At all stages, it is important to evaluate the performance properties of your materials and ensure they are durable enough to retain functionality.

The proper packaging for less fragile automotive parts must take into account the weight and multiple shipping cycles of potential returns. For lighter parts, paper or inflatable air cushions will work well. For heavier parts, foam packaging or inflatable cushioning solutions, such as Sealed Air’s NewAir I.B.^® inflatable cushioning systems, will likely be more effective and return-friendly.

Understandably, not every returned part will fit perfectly into a rectangular box. For larger, irregularly shaped and jagged items, foam cushions that conform to these parts’ designs will provide stable packaging that can be reused later in the process. For instance, Sealed Air’s Instapak^® foam-in-place packaging creates a custom mold for parts of any shape, and provides cushioning to protect against shock and vibration.

In certain cases, packaging designed to protect can inflict further damage on enclosed parts by scratching or abrasion. For parts made of chrome or other abrasion-sensitive finishes, light-weight foams and specialized films can help maintain product surface integrity.  

Inform and perform

Effective reverse logistics, and packaging to accommodate that process, is a product of collaboration and communication. Helping your customers and partners understand the role consistent packaging plays, and the basic steps they can take to stabilize packaged parts, can make a significant difference in reducing shipping damage.

Even for retailers and manufacturers with limited budgetary resources, a refresher in packaging for reverse logistics can uncover low-cost tactics that ultimately drive value. For many successful businesses, distributing packaging “how-tos” or “checklists” to guide customers on properly assembling returned packages – or redirecting them to a webpage with similar information - enhances reverse logistics processes. The ability to educate consumers and partners in proper use and re-use of packaging materials will vary, but choosing materials and systems that minimize damage and are intuitive for end users helps the bottom line in multiple ways. Taking such steps not only minimizes damage during returns, but also enhances the customer experience and increases the probability of repeat business.

Packaging for reverse logistics in the automotive aftermarket is highly variable. There is no one-fit solution for the packaging functions and materials needed for each individual part or accessory. While these considerations can help navigate the nearly limitless options, the best advice is to work with a trusted packaging partner who understands the aftermarket industry and can provide research and analysis from years of industry experience to help manufacturers, suppliers and dealers select confidently.

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