Conrad, one of the largest German B2B sourcing platforms, optimizes returns management with BuyBay

Conrad, the renowned German B2B sourcing platform with a century of history, offers a comprehensive suite of solutions for successful technical supply procurement. This includes not only cutting-edge technology and services but also an extensive and diverse product range. Nevertheless, the diversity of the product range brings with it the challenge of returns management. To address this challenge effectively, Conrad decided to collaborate with returns specialist BuyBay to streamline its returns management processes, making them more transparent and sustainable.

Founded in 1923, the family-owned company Conrad has evolved from a specialized electronics component mail-order business into one of the leading procurement platforms for technical supplies. It is now operating in 17 European countries. Its platform strategy brings providers and customers closer together, offering not only products but also a wide range of innovative services and digital procurement solutions. With tailored e-procurement solutions, Conrad simplifies complex procurement processes, helping businesses of all industries and sizes save time and costs.

Returns management as part of Conrad’s business strategy

Conrad’s online shop, conrad.de, offers over ten million products to meet daily technical supply needs. On average, the logistics center in Wernberg-Köblitz ships around 50.000 packages daily, reaching up to 75.000 during peak times.

“We invest a lot of time and care into creating detailed and informative product descriptions to limit the number of returns from the very beginning,” explains Mathias Lindner, Senior Director of Supply Chain at Conrad. Nevertheless, returns cannot be completely avoided, and a simple return process is very important for customers when it comes to choosing their suppliers. That is also part of the reason why we launched our Conrad Returns Portal in 2021. At the same time, it is also where we place great importance on transparent, secure, and sustainable processes which align with our business strategy.”

In 2021, Conrad started to look for a partner in returns management who could help them achieve this goal. Three main objectives for the reorganization of returns management:

Process optimization:
With wide product categories and numerous logistics partners and buyers involved, the processes become labor-intensive and non-transparent. The processes have to be streamlined and transparent.

Sustainability:
In line with its strategic environmental goals, Conrad planned to expand the refurnished and reconditioned returns to reintroduce as many products as possible into the consumption cycle. The transportation routes for these products also needed to be minimized wherever possible.

Improved ROI:
Most of the time, the usual return management practice is costly to many online retailers as it involves a lot of resources but relatively little return. For example, running auctions or selling the returned products to a bulk buyer. Therefore, a new solution has to be in place for this challenge.

After a thorough evaluation of various possible partners for returns management and a successful pilot phase collaboration with BuyBay from September to December 2021, Conrad decided to officially partner with BuyBay in February 2022 to address the above concerns.

Establishment of the New Integrated Returns Process

During the pilot phase from September to December 2021, Conrad sent multiple shipments of returns with varying product qualities and from different product categories to BuyBay. These shipments also included batches consisting of products of mixed quality. This allowed Conrad to track the processes, efficiency, and results, such as the defect rate and resale value. After the successful pilot phase, Conrad decided to enter a long-term partnership with BuyBay in February 2022.

The BuyBay technical team works closely with Conrad to implement process improvements for both partners. Adjustments were coordinated through regular meetings. BuyBay now manages the returns from Conrad for processing. You can see the processes here.

Since October 2023, Conrad has integrated BuyBay as part of its marketplace as Conrad’s renewed goods go-to seller with BuyBay’s own brand name. With this integration, Conrad further closes the sustainable loop by reselling returned products through BuyBay. This further positions Conrad as a sustainable provider in the e-commerce sector.

Results of our collaboration:

1. Transparent and streamlined processes
   The processes have been significantly streamlined, integrated, and accelerated with BuyBay. By outsourcing the labour-intensive processes of returns grading, inspection, repairing, and resale, the internal team at Conrad can refocus on its core business and free up valuable resources.
2. Profitable and cost-efficient routing
   Powered by BuyBay’s grading and recommerce software, it enables speedy and granular grading processes for a wide range of products. It also optimizes the resale prices for the returned products by listing on the most profitable marketplaces and choosing the most cost-efficient routes. Products are usually sold within two months and the resale values were maximized.
3. trategic guidance on sustainability processes
   BuyBay also offers strategic guidance on sustainability processes to help Conrad meet CSRD (Corporate Sustainability Reporting Directive) and ESG reporting obligations.

“It was important for us to find a central partner for returns management who can find an individual solution for each return,” emphasizes Mathias Lindner, Senior Director of Supply Chain at Conrad. “Crucial for us was the expertise and resources to professionally inspect, repair, and reintroduce as many products into the market as possible, this aligns with our sustainability goals. Complete transparency for ESG reporting was also extremely important. With the passion and commitment of BuyBay’s team, we were convinced that BuyBay was the partner that we were looking for.”

“We are very pleased with the collaboration with Conrad,” adds Petra Olah, Key Account Manager at BuyBay. “The teams on both sides have worked together very productively, we both learn from each other, forming a perfect partnership together. From our end, we were able to bring our core competencies in the areas of grading, repairing, and resale, proving that efficiency, profitability, and sustainability can go hand in hand today. Together with Conrad, we will keep on exploring new ways of collaboration in the future.”