Oct 7, 2019

What Is Returns Management

Although a lot of people start to prefer online shopping instead of a traditional one, it has one main disadvantage that can become a big pain for e-commerce businesses. Online shopping takes away the possibility from the buyers to try on and evaluate the product that the customer wants to buy. Luckily for the buyers, e-commerce stores must have a refund policy. They have to accept the returned items that are broken, different than described, don’t match the size or under other circumstances. Such kind of information should always be stated in return policy of specific e-shop. 

A lot of customers take such opportunity and return the products. And that is why returns become a big issue of e-commerce businesses that is very hard to control. With growing e-commerce sales, the number of returns increases, too. Companies can’t avoid them. However, it is always a way how to minimize and control the. 

Returns management

Returns management is the process of supply chain management, which includes returns, reverse logistics, communication, and other aspects that can help to deal with product returns and eliminate losings. While there is no way how to avoid returns, businesses have to prepare the plan of how to manage them that returns wouldn’t become a significant headache. It will definitely help to minimize the negative effect that returns cause.

How returns affect businesses?

Traditionally, the e-commerce business sells the item and even pays for the shipping. If the buyer wants to return it, the e-shop takes care of all return processes and gives a full refund. Such an unsuccessful bargain impacts the total profit of business as shipping and returning costs are paid. But it’s just one point from the list of negative aspects.

When the buyer returns the product, it cannot be resold immediately. The item may be broken, missing parts, or may have other defects. E-commerce businesses have to take care of it and carefully check if the thing is suitable for the next sale. Unfortunately, this process requires time. The business owner has to find an employer who would be responsible for inventorying such items. It means that businesses lose money not only when they pay shipping fees, but they also need to hire more people and pay them just for controlling items that were returned. 

Besides, a part of returned items is broken, their package is damaged, so the goods can’t be sold again as new products. This is the worst case for businesses when they invest additional money for the products that are useless and can be thrown away.

One more disadvantage of product returns is storage. Businesses have to keep somewhere the items that were returned. Usually, they have to dedicate a part of their warehouse. However, the problem is that if there are a lot of such items, it takes time while all of them are checked. Some of the items that can’t be resold lie even longer until they are picked.  While valuable space is used for returned items, businesses have to invest in bigger warehouses.

How to manage returns?

Businesses can manage returns on their own. However, in most cases, a better option is to use liquidation services. Companies who offer such services are always ready to help you with returns management. They can take care of all processes, so you don’t need to bother about the condition of the items and how to resell them as a brand-new product. 

If you have an e-commerce business, you need to count the expenses of returns. When you know the numbers, you can evaluate the situation and decide whether you should deal with returns on your own, or you should better choose liquidation services and let them do the hard work while you focus on expanding your business and increasing the sales.

However, even if you let liquidation companies manage your e-commerce returns, don’t forget to take notes about why your customers don’t keep your products. Do you sell many broken items? Are the descriptions of items inaccurate? You should try to know all the possible reasons why people don’t like your products. In such a way, you can always try to minimize the number of returns and raise the satisfaction level of your customers. A smaller number of returns means fewer expenses and many happy customers.

If you want to be successful and expand your business, you have to listen to your customers and take into account their observations. By listening to your buyers and having a strong returns management, you will be able to forget about returns problems and significant profit loss due to them.


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