MANAGING AMAZON RETURNS
Managing product returns can be challenging for many Amazon sellers, particularly for high-volume merchants.
Avoid Returns When Possible
The best way to manage returns is to minimise the chances of their occurrence 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 to helping customers buy the right item, resulting in fewer returns. Product images should be clear and accurate. Providing good customer support is key. You should also have a clearly defined returns policy 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 and appropriate description. Failure to do so will lead to poor feedback and possibly even an account suspension or performance issues.
Creating a Returns Process
Handling returns can be tedious, even approaching nightmare status. Returns are complex. With Amazon FBA, for example, you often just get back a large box of haphazard items. When you send the new products out they’re pristine, and then all of sudden you get back a pallet and there could be hundreds of different SKUs and kits and you don’t know what’s what. The returned shipment can also 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 items. Sometimes you get the packaged-deal 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 and to open cases with Amazon support if anything is missing or damaged.
What to do with these returned items is your next challenge. You may have goods that you can’t return to the vendor because you bought a take-all deal, or a closeout, or there’s a 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 first. Is there a way out? Yes! Setting up the right process for managing these items can help you resolve these issues and avoid leaving money (boxes of returned items) on the warehouse floor.
Many companies tend to delay handling returns. 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 them right away. Having a defined system for managing returned items is the best way to avoid procrastinating.
Understanding the Real Cost of Returns
Many sellers have a tendency to hold onto returned items. To them it’s gold, but in reality, they may not be worth much. Sometimes, it is better to take the hit 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, 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 various fees incurred with a returned item from Amazon. When buyers return items to FBA, Amazon deducts the original sales proceeds from the seller’s merchant account but credits the original Amazon sales fee. However, other fees are triggered such as returned item fees, storage fees and potentially item destruction fees. Return fees are 50 cents and destroy fees are 25 cents per item. Most people don’t know that. It’s not really that much per item, but it adds up!
These charges are only part of the total costs associated with returns. Unfortunately, Amazon reporting on returns costs is fragmented and unclear. It’s hard to normalise and compile into a consolidated report. Other costs to factor in include the original packing and shipping costs to Amazon FBA. So in summary, returns are costly and labour intensive!
Alternative solution to consider
Your logistics service provider will often be prepared to receive returns from Amazon warehouses or directly from buyers into their warehouses in the relevant geographies. Once the goods are returned to a warehouse, logistic providers will ship the items back to you or to your manufacturer. Obviously, this will only make sense for high value items because your logistics service provider will definitely charge for handling and shipping returned items.
This is the most common returns handling scheme. However it is often not the best solution for many product categories and vendors.
There are dedicated return service providers who can help with minimising or eliminating losses. Currenxie partner - Tradeport - manages returns and is directly integrated with most online sales channels including Amazon FBA, Amazon MFN, eBay, Walmart, Newegg and Shopify. They are also integrated with many multi-channel software solutions such as Magento. The company focuses on trying to help sellers get the most possible cash back for their returned items. Tradeport offers three potential methodologies:
Return of items to the vendor
Refurbishment of items to Amazon's standards of sale and reselling via the Amazon Renewed Program. Prior to being resold, all products are tested graded and repaired by Tradeport. Tradeport takes a revenue share of the sales proceeds depending on the item’s price point.
Destruction of items
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