Interview with Ross Johnston, CEO, DiskCorp
Situation: A well-established B2B company is starting to work with B2C retailers. It is finding that both the internal and external perspectives of B2C companies are very different. How does a B2B company work differently with B2C companies?
Advice from Ross Johnston:
- In the OEM market, manufacturers control all warranty obligations, have tightly controlled procedures for handling and tracking returned goods and are very focused on product quality and operational efficiency.
- Leading B2C retailers have a very different perspective. Their focus is on the customer: on encouraging great customer experience and repeat customer visits. Products are sold to big box retailers without warranty, and the retailers provide their own warranty programs. This results in far more returns than for OEMs. Further, product is returned for a wide variety of reasons from failure to work as advertised to the customer simply changing their mind. There is also a wide range in how returned products are handled – from throwing them in the dumpster to returning undamaged items to stock, and few records are kept.
- Our challenge is to help retailer and big box customers design, develop and implement recycling and cost recovery systems in our market. This means both developing procedures for the retailers and new channels to cost recovery markets.
- First, they need processes to triage returned goods into broad categories: new or near new goods condition for resale; goods which require refurbishing or recycling; and goods for environmentally appropriate disposal.
- Second, we have created a software tracking solution – a reverse logistics program – to track returned goods from receipt to their eventual disposition with full end-to-end P&L analysis. This can yield up to a 45% gross margin on returned goods which is shared with the retailer.
- We develop additional processes that vary by retailer to help them handle the flow of returned goods.
- We want to provide the retailer with an end-to-end operational platform that turns a cost center into a profit center and reduces long-term liability exposure that accompanies landfill disposal.
You can contact Ross Johnston at email@example.com
Key Words: B2B, B2C, OEM, Warranty, Procedures, Focus, Product, Customer, Return, Refurbish, Disposal, Process, Tracking