Optoro, a start-up company that aims to reduce the financial and environmental costs of another great holiday tradition: returns.
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Americans returned $260 billion in merchandise last year, up more than
66 percent from five years ago, according to the National Retail
Federation. And a quarter of that was during the holiday season.
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As e-commerce sales surge and free return shipping becomes the norm, shoppers are set to return even more this year.
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A majority of returned items never make it back to retailers’ shelves.
Instead, the items wind their way through liquidators, wholesalers and
resellers, many of the purchases ending up in landfills.
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Optoro
is becoming a player in the “reverse logistics” industry handling
returns in the United States, one that is growing together with the rise
of online sales.
And
the space is attracting investors’ attention. Last December, Genco, one
of the biggest operators, processing about 600 million returned items a
year and raking in about $1.6 billion in sales, was acquired by FedEx.
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At least 15 percent of e-commerce sales end up as returns, according to
industry estimates, compared with an estimated 8 percent of purchases
made at brick-and-mortar stores.
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For undamaged products that have a high resale value, like baby goods,
power tools or tablet devices, Optoro’s software might direct products
to its own discount site, Blinq.com,
which sells open-box goods at discounts. (Optoro helps retailers test
and grade those products.) For returns, or even excess inventory, that
are available in bulk, products are routed to another site, Bulq.com, where discount stores and other off-price retailers can purchase merchandise by the pallet.
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