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.
The Customer Takes the Lead
The first return scenario is one where the end customer directly reaches out to you (the brand) to make a return. This requires you to be hands-on throughout the entire return process.
Here’s what this type of return commonly looks like:
📞 Customers reach out to you and ask for a return.
🖥️ This type of return requires a manual or system process already set in place for customers to reach out (phone, website, or email) and receive a return label if one wasn’t provided in the shipping box.
📫 The customer will then request a label and ship the item back to you.
📦 Once the product is sent back to the warehouse, someone then needs to evaluate the product to see if it’s resellable and restock the item. This process is called reverse logistics.
💰 After the goods are restocked you will need to issue a refund to the customer or send a refund notice to the retailer so that they can refund the customer. In the case of an empty box or wrong products being returned, a dispute will be filed, and so on.
As you can see, this process can be time-consuming and tedious, not to mention adds additional costs into play.
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:
- If the retail partner is sending returns in bulk, they usually offer a restocking fee that should be negotiated beforehand.
- Each retailer has its own logistics and expenses compensation terms. Make sure you are aware of them in advance.
- 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:
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.
Where Cymbio Comes In
Enter Cymbio! We help brands overcome the stress of managing returns throughout the entire return process by:
- Automating the reverse logistics and refund process as a whole on our drop ship platform and providing support from the beginning to the end.
- Remaining in constant communication from the moment a return is initiated by the end-customer on the marketplace, by informing the warehouse of the incoming return for quicker and smoother operations – no blind receivables.
- Triggering refunds on the marketplace automatically, once the product has been evaluated and deemed as resellable.
- Producing and processing packing slips compliant to retailer’s specifications.
- Reporting exportable analytics and key metrics.