While the delivery logistics is constantly evolving, reverse logistics is flooded with questions, like what do retailers do with the product when it comes back; where do they store it; and how do they resell it. “That is a really big issue,” Strasmann says. “In some cases, the product comes back and needs to be handled from a human resources standpoint, a storage standpoint and sales standpoint. Whoever figures out the answers to those questions first will be a big game changer.”

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LOS ANGELES—Speed of delivery is crucial for online retailers. It is so crucial, in fact, that ecommerce retail outlets are leasing up infill industrial centers, pushing vacancy rates to all-time lows. While these firms have been focusing on the best way to get products to customers as quickly as possible, returns are piling up on the reverse logistics side of the equation.

“The way the retailers handle returns is a very costly function. It is really a challenge, and it is a big drain on the bottom line,” Kurt Strasmann, senior managing director at CBRE, tells GlobeSt.com. “I think in a few years, the reverse logistics will have to change.”

Currently, returning items is generally free, meaning that the retailer bears the cost of postage as well as the handling upon return. Strasmann says that the free return policy will have to evolve soon to mitigate the burden on retailers. “Eventually, there will be a different policy on the return side,” says Strasmann. “Right now, you can return product for free, and I think that will evolve into either a cost to return product or a different price between return and non-return.”

That time may still be years away. Right now, ecommerce sites are still perfecting the initial delivery and speed of delivery. This all includes solving for the last mile and finding inner city facilities that can accommodate the flow of goods. “For ecommerce sites, there is a fine line between speed of delivery and cost of service,” adds Strasmann. “Obviously, the more facilities that you open and the faster speed of delivery, it is going to cost you more money, so it is a balance. Right now, the customer is saying that speed is very important.”

While the delivery logistics is constantly evolving, reverse logistics is flooded with questions, like what do retailers do with the product when it comes back; where do they store it; and how do they resell it. “That is a really big issue,” Strasmann says. “In some cases, the product comes back and needs to be handled from a human resources standpoint, a storage standpoint and sales standpoint. Whoever figures out the answers to those questions first will be a big game changer.”