How to Successfully Manage eCommerce Returns

Whether you use drop ship or marketplace retail methods, there is one issue that you must learn how to successfully manage within the eCommerce world – RETURNS. Returns are an inevitable part of the business that every brand needs to cope with, but how you manage them can be the difference between happy customers and dissatisfied ones. And we all know which ones you want to have as your customers!

In essence, to successfully manage eCommerce returns, there are two main return processes that a brand will need to comply with. Either your customer reaches out directly to you in order to start the return process, which is more common in marketplace retail, or your retail partner manages and handles the returns themselves and either return the items back to you in bulk or direct the customer to return straight back to your facilities.

Let’s take a deeper look at both methods and how they will affect your bottom line.

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The Retailer Fills the Gap

The second scenario involves the retailer as the one who is managing the return system, leaving you (the brand) out of the equation. The retailer will either produce the return label themselves and direct the return to your warehouse, or they will collect the returns and send all of them to you in bulk. Either way, they manage the process on their end. 

Keeping this in mind, there are three things to be aware of with this method:

  1. If the retail partner is sending returns in bulk, they usually offer a restocking fee that should be negotiated beforehand.
  2. Each retailer has its own logistics and expenses compensation terms. Make sure you are aware of them in advance.
  3. Sometimes a return is mistakenly sent directly to a brand, and in this case, the retailer might require that you notify them within 1-2 days.

In the case where the retailer directs the return to the warehouse, the warehouse must be alerted about the items being returned. In this case, this is the reverse logistics visualized below:

Reverse logistics

Expected Return Ratio

So what is the return ratio that you can expect with either method? It’s important to understand that the average return rate for eCommerce retail can vary depending on the product you sell. One-size-fits-all products have a much lower return rate than specific-fit products, such as apparel or footwear. Shoe companies have the highest return rate percentage as far as products go.

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