Managing returns can be complicated for many Amazon sellers, but it’s even tougher for high volume merchants. I set out to find a better returns solution for my eCommerce company, Quantum Networks, a few years ago and ultimately created a partnership with Tradeport. Now I’m committed to helping other Amazon and online sellers understand why they should have a clear returns process.
Avoid Returns When Possible
The best way to manage returns is to not have them in the first place. Returns cost a lot of time and money for businesses. Transparency in product descriptions and other content related to your listings can go a long way when it comes to helping customers buy the right item, which can thereby help prevent returns. Product images should be clear and accurate, and providing good customer support is key. It’s imperative to have clearly defined return policies in place for your products.
If one of your products has a high return rate, look at why you are getting returns. Is there something you could change to help prevent returns? There are a variety of different software solutions and systems you can use to manage returns, but the important thing is to make the process quick and easy for customers.
If you’re planning to try to resell a returned item, it’s important to test it and list it with a clear description. Failure to do so will lead to bad feedback and possibly even account suspensions or performance issues, and while you’re trying to do something good and just move an item, you’re creating a bad experience
Creating a Returns Process
Handling returns can be tedious, and even nightmarish. Returns are very complicated. With Amazon FBA, for example, you often just get back a large box of junk. When you send the new products out they’re pristine, and then all of sudden you get back a pallet and there could be 400 different SKUs and kits and you don’t know what’s what. The return shipment can go wrong in several ways. Sometimes they don’t send you back the right item. Sometimes you get a shoe instead of a hard drive. Sometimes you get other people’s stuff. Sometimes you get the kit and it’s missing a big part of the kit. It’s important to have a process to verify that you received all of your items back and to open cases with Amazon support if anything is missing or damaged.
What to do with these items is the next challenge. You have the stuff that you can’t return to the vendor, because you bought a take-all deal or a closeout or there’s no return policy or it’s past the return expiration date. You want to sell it on eBay or online but you have to test it. You can’t just sell something that doesn’t work, because then you get your account suspended. Is there a way out? Yes! Setting up the right process for managing these items can help you resolve these dilemmas and avoid leaving money (boxes of returned items) on the warehouse floor.
Many companies put off handling returns, but that can be detrimental to profit margins. This can be especially true for items in technology-related categories. Electronics do not gain value over time. They lose value every day so it’s important to deal with right away. Having some kind of defined system for managing returned items is the best way to avoid procrastinating.
Understand the Numbers
When it comes to returned items, A lot of sellers hold onto stuff, to them it’s gold, but in reality, it’s not worth that much. Sometimes it is better to just chalk up a loss and move on. It’s also very important to understand the price point of the return. If it’s a $10-15 item, it doesn’t always make sense, depending on your costs and your overhead, to resell it. Take all costs and fees into account when deciding what to do with your returned inventory. If reselling your returned items takes too much time and money, you might want to donate or destroy those products instead.
There are several fees involved with a returned item from Amazon. When someone returns an item to FBA, Amazon sends the seller the money back and the fee comes back, but technically, even though Amazon sends you a big box of stuff, they’re still processing the return for you and dealing with it, so they charge you for it. Most people don’t know that. It’s not really that much per item, but it adds up!
Those charges are only part of the total costs associated with returns. It’s hard to normalize and put into a report, but you’ve also lost all of the money and effort on the outbound, right? Because you received the item from the vendor, you packed and picked it and shipped it to Amazon and paid for that, and then it was returned, so that’s all loss. So, all of the effort you spent shipping it and supporting it is wiped out. Then there’s a 50 cent fee just to remove each item back to you, which will probably trickle in over a few weeks in multiple shipments from different warehouses, which really hurts cash flow. If you want to destroy it, it’s 25 cents. (You can calculate the cost of an FBA Removal Order for your items here.) Once you get these items back, you’re already probably at a loss, but even if your’e not, you probably want to make something of it or else you’ll lose even more.
Tradeport manages returns and is directly integrated with most online sales channels including Amazon FBA, Amazon MFN, eBay, Walmart, Newegg, Shopify, Magento, Retailers and most multi-channel software solutions. The company focuses on trying to help sellers get the most possible cash back for their returned items with three main strategies. Some items are simply returned to vendor as a service, others are refurbished to Amazon’s standards for sale in the Amazon Renewed Program, and many all products are tested, graded and repaired prior to being resold in which Tradeport takes a revenue share for the sales depending on the item’s price point.tailed. The company manages returns for everything from smartphones to snorkel gear.
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