Online return: A double edged sword

Online return was supposed to be a catalyst to bring more business. But as e-commerce is becoming a household practice it is becoming a plaque. It is rapidly affecting profit margins, slashing conversion rates, and eventually affecting bottomline. When a product is returned or exchanged the seller has to bear the supply chain cost as well as declined resell price. The returned or exchanged items cannot be sold at original price. This issue is more serious with fashion items. In this blog we will understand how online returns are affecting the e-commerce industry and if you are a seller how can you reduce your loss whilst handling returns.

 

The only advantage: 

Online returns is the second biggest reason to drive shoppers. The first is free delivery. As per many market reports almost 30% of all the online bought products are returned. An ultra-generous policy, operated and managed well, can drive growth. 

 

What do the experts say?

“Returns are so misunderstood that retailers have accepted them as the cost of doing business,” says Peter Sobotta, CEO of ReturnLogic. If you question a retailer what they are expecting they would never look for more liquidity in the procedure or returns. They would rather want to acquire manage and grow their buyers, in other terms profitability. The thing that can make a difference is a friction-free return policy. You have to draft one that offers minimum 30-day window for free returns and attract browsing shoppers to convert them into buyers. You need to have a front and centre way to tackle with serial returners and a well operated logistics infrastructure.

 

The Dilemma of Return Logistics: 

A market study found that many of the online retailers are not well equipped with return logistics hence costing them in margins. The Reverse Logistics Association explains that managing the “return and repair” process accounts for 10% of total supply chain costs. Having a concrete, well tailored procedure for taking care of returns can help make reverse logistics much easier. Initially you have to ensure that the pre-purchase return policy is crystal clear. Then, you can use multiple tools and programs(which are easily available) to track and monitor these returns. You have to carefully pay attention to every client and distinguish between buyers who often return and the one who seldom do. 

 

Conclusion: 

The reality of the buyer is that they buy with an intent to immediately return some or all of the products, it is for them to “try” and see. This costs a lot and is one of the major reasons for driving the prices high. Companies are putting additional efforts in handling reverse logistics. Returns are becoming the enemy of many retail brands. The online returns are already a major factor for e-commerce industry, hence not providing returns will affect sales and revenue. Many E-commerce pundits believes that the case online returns is too far gone and it is already eating the business up. If you are a seller you cannot pause the return, all you have to do is to work your way around it.  ')}