According to theBrazilian Electronic Commerce Association (ABComm)e-commerce in Brazil grew by 27% in the last year, moving approximately R$186 billion. The expectation is that by the end of 2024, this amount will reach R$205.11 billion, with 418.6 million orders, and a number of buyers that could reach 91 million.
OnestudyInvesp reveals that 30% of products purchased online are returned, a number much higher than in physical stores, where the return rate is 8.89%. This high return rate not only represents a logistical and financial challenge for companies but also has a significant environmental impact.
As explained by Thiago da Mata, CEO of the online auction platform Kwara, "The increase in online buyer demand results in a significant volume of returns, making effective management of these items essential. Conducting the sale of reverse logistics goods through an auction becomes a quick and transparent solution to manage the return of these products efficiently, profitably, and environmentally." In other words, with the exponential growth of e-commerce, product returns have increased significantly, driving the practice of reverse logistics, an essential tool for sustainability and operational efficiency.
Why are reuse auctions effective?
The research“E-commerce Trends 2024, conducted by Octadesk in partnership with Opinion Box, shows that most consumers started shopping online in the last five years. Among the interviewees, 64% stated that their shopping frequency increased in the last 12 months, with 85% shopping online at least once a month and 62% making up to five purchases per month.
“This growth in the number of purchases and new adopters of the online model is directly linked to the increase in the volume of product returns, reinforcing the importance of sustainable solutions. This practice not only relieves pressure on logistics centers, but also gives consumers the chance to buy products with discounts of up to 90% compared to the market reference price, encouraging more conscious consumption,” says Thiago.
Instead of discarding returned products, many companies choose to auction these items, offering consumers the opportunity to purchase products that never reached their final destination at reduced prices. For companies, this practice allows them to quickly recover part of the invested amount, as well as reduce the accumulation of goods in distribution centers. This also promotes the circular economy, reducing waste and fostering sustainability.
Reverse logistics auctions and ESG practices
Asset recovery auctions not only minimize environmental impact but also align with ESG (Environmental, Social, and Governance) practices, promoting transparency and efficiency in resource management. According to the Reverse Logistics Institute, implementing an effective program can reduce material waste by up to 30%, promoting more efficient resource management.
For Mata, companies that adopt these solutions demonstrate a strong commitment to social and environmental responsibility, strengthening their image among an increasingly ESG-conscious audience. By giving a lasting purpose to returned goods, companies strengthen their environmental and social responsibilities, meeting the expectations of consumers who value environmental preservation.
According toMcKinsey & Company, 60% of consumers are willing to pay more for sustainable products, highlighting the importance of integrating the technique into business models.
In addition to environmental benefits, returned product auctions offer financial advantages. Companies are able to recover part of the invested amount, while consumers have access to products at competitive prices in the secondary market. This practice also aligns with governance principles, which prioritize transparency and efficiency in resource management.
How do reverse logistics auctions work?
In reverse logistics auctions, items that would be discarded, such as electronic equipment, furniture, industrial machines, and various other types of items, are recovered by companies and put up for sale in auctions, which mainly take place on specialized online platforms, connecting buyers to these assets in a quick and efficient manner.
"By adopting deactivation strategies using the online auction tool, companies have the opportunity not only to free up capital quickly but also to optimize their resources effectively. Auctions offer a dynamic and global platform that allows companies to reach a broad base of potential buyers, thereby maximizing the value of their assets. It is an essential approach for companies seeking agility, efficiency, and profitability in a constantly evolving competitive market," comments the CEO.
For Thiago, “by disposing of assets through online auctions, companies create a process that can become recurring, in addition to outsourcing advertising and even inventory and collection processes. Furthermore, the auction format allows companies to create a sales cadence that minimizes the risk of items remaining in inventory, transforming idle assets into liquid capital quickly and efficiently.”
With a 16.5% increase in the number of online stores in 2023, which now total more than 1.9 million, according tosurveyAccording to the "Brazilian E-Commerce Profile," reverse logistics and its auctions become even more essential to ensure that the growth of e-commerce in Brazil follows a sustainable and profitable path. "Therefore, this practice is vital for companies seeking to expand responsibly in e-commerce, contributing to the circular economy and integrating ESG practices that meet the demands of consumers, the company, and investors," concludes Thiago.
