Amazon product returns are unavoidable parts of Amazon selling. For an Amazon Seller, product returns means the reversal of a successful transaction. Not only that, a seller is also faced product return frauds and the the additional cost of managing the return. Returned goods are indeed inevitable part of selling, however there is untapped potential in these products that can still make you good money.
On an average, 12% of the products bought are returned – 12-18% in casual apparel, 15-20% in electronic goods and around 35% in high fashion apparel – we realize that the product returns economy is not a small thing. In fact, it forms a major subsystem of products moving against the flow. This also means that in terms of capital, product returns amount to a massive chunk.
The returned product pile in your warehouse is generally left neglected till you start running out of space to store new products. If your business handles returns this way then you might be losing significant profits that could have been made using the returned products.
You are not only losing out on the profits that can be made from the returned products, you are also losing money on the storage.
What can be done about these returned products?
Don’t wait for it pile up
To tackle the situation, we should avoid having a great pile in the first place. Waiting till your pile grows bigger and tougher to handle is a huge mistake. Get them moving as soon as there are Amazon product returns. Keep a track of the returned products or take the initiative to delegate staff to ensure that the returned products get moving to the next step. This should be done as soon as they arrive or at least on a frequent periodic basis.
Remove the labeling and markings
For the products that are returned to FBA and are back to your place, get rid of the LPN stickers or any identifying label that Amazon has marked.
For FBM products, the same might not be necessary, as the customers would not know what the labels are. However, remove all the markings just to be on the safer side!
Re- list the product
Some items are returned in brand new condition, in such cases it should be sold on Amazon as new. But if the returned products are used, then they should be tested and graded, which is a time consuming process.
If the products that are returned are intact. You would have received an Amazon product return, mostly because the customer had a change of mind. The most convenient thing to do in such case is to re-list the product on Amazon.
To maximize profits, you’ll need to make your listings appealing to your new customers and make your product listings come up higher in search results.
The marketplace – Not necessarily Amazon
You don’t have to constrain your selling to Amazon only. It is common to see product pages on other e-commerce websites like eBay and ShopClues that proclaim ‘Refurbished product’. Returned products with minor damages are repaired and resold as refurbished products with a discount to clear the inventory. An online seller need not be constrained to selling on Amazon only, and can consider the alternatives
- The products sell much more easily or competitively on other websites like eBay, especially if product returns are sold.
- Dealing with buyer’s directly instead of going through Amazon.
- You are open to selling products as bid by the customers, though definitely at a price lower than at what it was sold.
- The product returned can’t be labelled new but the Amazon category allows only new products like health, beauty.
If you are shipping to the customers directly, then exercising other options wouldn’t be difficult, however if you are an FBA seller, then you would have to make procedural changes. If you are not inclined to do the same, reverting to Amazon is the best option.
What about Amazon product returns that are damaged beyond repair?
Retailers are faced with challenges such as product malfunction, missing parts, damaged packaging, and expired perishable merchandise. If there is a really damaged product you could either ship it back to the manufacturer, the manufacturer may try and salvage spare parts from the product and shred the rest of it. Or do something about it yourself! It is not uncommon for sellers to sell products or their parts in the local market a slashed prices. This is much like the refurbished sale, except that it is happening from the retailer’s end and not the manufacturer.
With all the time and effort that goes into reselling returned products, there is also another thing you could consider. Employ staff to manage the your product returns. Or get a third party specialized in Amazon reverse logistics to manage your Amazon product returns.