March 10, 2026 • 10 minute read
Author: Phyllis Jackson, Senior Manager, US Marketing, UPS

• Business-to-business (B2B) and commercial returns accounted for 35% of reverse logistics revenue in 2024.¹
• A smart reverse logistics strategy can mitigate challenges with returns, limit profit loss and potentially recoup revenue.
• A returns policy that balances your interests with your customers’ interests can help you remain competitive in the $9.7 trillion wholesale market.³

Streamlining forward logistics strategies for greater efficiency and cost savings remains a priority for wholesalers. However, as customer expectations evolve and the wholesale market becomes increasingly competitive, reverse logistics has also become an important strategic focus, too.

Reverse logistics is the backwards flow of goods after the initial sale. Products return to wholesalers for reasons related to customer needs, end of service life, unsold inventory and more. Understanding the often-complex factors impacting reverse logistics can help wholesalers define the right strategy for business growth.

“Recognizing the ways reverse logistics can lead to competitive differentiation can be a game changer for wholesalers,” says Charles Cawthorn, Strategic Lead, UPS. “Businesses that master the backward flow of goods through technology, streamlining processes and a dedicated focus on the customer experience can realize new opportunities.”

Through data, technology and strong partnerships, UPS Logistics Coordinators can help wholesalers view their businesses holistically and identify solutions in three key ways:

• Mitigating challenges with returns
• Limiting profit loss
• Potentially recouping revenue

It’s a common misconception that only retail businesses selling directly to customers (B2C) need a reverse logistics strategy. In reality, B2B and commercial returns accounted for 35% of reverse logistics revenue in 2024.¹

For wholesalers, several scenarios drive their customers to make returns:

• Product defects: If items arrive with a defect, customers return them or exchange them for undamaged stock.
• Reusable equipment: Packaging, pallets and containers can be returned and reused.
• Environmental stewardship: Customers may work with wholesalers to recycle items or packaging for sustainability or safety purposes.
• Regulatory compliance: Some sectors, like pharmaceuticals, electronics and chemicals, have governmental regulations for proper disposal of unused products.
• Order errors: Sometimes errors result in customers receiving excess or unwanted product.
• Unsold stock: Retailers in certain industries or circumstances may send unsold inventory back to wholesalers if the products are out of season, perishable or obsolete.

In an ideal world, wholesalers could prevent returns from ever happening in the first place. But in the real world, some level of returns is unavoidable. As an end-to-end supply chain provider, UPS offers the visibility, technology integrations, and flexible transportation options to simplify the returns process.

However, in the case of preventable returns, UPS has ideas to minimize challenges and reduce the overall rate of returns.

Wholesalers can take action against preventable returns with a strong digital presence.

• Start with your website: Is it easy to navigate and understand? Your online presence matters, and 74% of B2B buyers say they are willing to switch suppliers if another website offers a better digital experience.²
• Product descriptions: Highly detailed and accurate product descriptions can help reduce return rates by providing the customer with enough information to avoid uncertainty or confusion when ordering. The more they know at this purchase decision point, the less likely it is they’ll order the wrong product or be surprised about product details upon receipt.
• Returns policy: Make sure that your returns policy is clearly stated to help eliminate customer confusion. Your returns policy may be an important part of your customers’ decision-making process. State your policy clearly before they complete their purchase.

The right box size and packing materials provide protection to help ensure that the items arrive intact and mitigate the need for returns. As an end-to-end supply chain provider, UPS can help simplify complex reverse logistics challenges.

For larger businesses, the nationwide network of drop-off locations available through Happy Returns^© can help simplify operations. Providing an easy way to buy online and return in store gives customers a hassle-free experience and enables businesses to streamline operations and cut expenses.

Wholesalers have many ways to support customers before, during or after an order. Be clear about how you can be reached and use all available methods: phone calls, email, built-in messaging functionality on your website or social media channels (direct message or post). Adding live chat or AI chatbots can also help you handle high customer service volume effectively.

“Offer multiple communication options to customers so they can find you in whatever channel they prefer,” Cawthorn advises.

Whether taking orders or fielding questions after delivery, well-trained customer service representatives are a powerful influence. They can prevent order errors or even, Cawthorn adds, give the buyer what they need to change their mind and cancel a return.

Simply put, products that work as promised are more profitable. Do your part to ensure that what you offer meets customer and regulatory expectations.

Cawthorn suggests thoroughly vetting manufacturing partners to determine if they meet your quality standards by reviewing company certifications and business reviews. He also emphasizes the importance of inspecting all shipments to ensure the products comply with your expectations.

Preventing returns is great, but no wholesaler can expect to have zero returns. And in certain industries, wholesalers have an obligation to have reverse logistics operations in place for environmental or safety compliance. Having a strong reverse logistics strategy can limit additional expenses in this area. Here are some ways you can better manage the costs.

Wholesalers have to strike a delicate balance between operational efficiency and customer satisfaction when it comes to returns because the competition within the $9.7 trillion wholesale market³ continues to intensify. Set a returns policy that balances your interests with your customers’ interests.

Gather feedback from customers and monitor your competition for changes to their policies that may weaken or strengthen your ability to attract accounts.

Use all available data to the fullest to identify common customer behaviors regarding returns. Look at what products are being frequently returned — and why. Are the returns regional or seasonal? That information can help you better plan your product mix and forecast inventory.

Data can also help you ensure your transportation costs stay as low as possible. Choose your shipping methods strategically and look for ways to plan time- and fuel-efficient routes and modes.

UPS Logistics Coordinators can step in to provide an analysis and consultation to help identify solutions for inventory and transportation optimization.

Returned inventory isn’t necessarily lost revenue. The final element of your reverse logistics strategy uncovers ways to recoup profits.

A more efficient strategy can help you put more returned products back into your inventory. For example, assuring wholesale returns get the same attention to durable packaging and handling as the original delivery will prevent damage on the trip back.

Communicating to customers about return terms like restocking fees, criteria for the condition of returned inventory and shipping cost planning can also maximize the amount of inventory that can be resold. For products that are defective and can’t be restocked, you can contact the manufacturer to see if you are eligible for a reimbursement or a buyback program.

There are also third-party discount marketplaces for items that are still sellable. Items your customers return due to inaccurate label information or broken packaging seals can often be resold on these platforms. Items that are unsellable can be donated or recycled.

“Returns are inevitable, so think strategically,” Cawthorn says. “There are opportunities to uncover efficiencies and boost your important partnerships with retailers. UPS can help wholesalers balance short-term recovery with long-term process improvements and customer loyalty. The goal is to find an end-to-end solution that enables business differentiation and growth.”

¹ “Reverse Logistics Market Trends Analysis Report 2025-2033,” Research and Markets, accessed October 22, 2025.
² “Wholesale Industry Insights,” Statista, accessed October 27, 2025.
³ “B2B Customer Service in 2025: Strategies to Retain Wholesale Buyers,” Shopify, accessed October 22, 2025.

Individual results and options will vary. UPS makes no promises of any specific outcome in this document but instead provides only example outcomes based on certain UPS customer experiences.