In the world of e-commerce, returns have become a big deal for brands to deal with. The move to online shopping has led to a surge in returns, which is quite different from the return rates seen at traditional brick-and-mortar stores. This major change has pushed DTC and e-commerce brands to find new ways to handle these returns effectively. With the rising costs associated with returns, a great solution comes in the form of third-party providers. In this blog, we explore why outsourcing your customer returns to a third-party provider could completely change the way you manage returns.
The Realities of Returns
E-commerce's allure is undeniable, but so are its return rates. A staggering 30% of e-commerce purchases are returned, standing in stark contrast to the 8.89% returns observed at brick-and-mortar stores. This paradigm shift in consumer behavior has thrust DTC and e-commerce brands into a complex arena of returns management—a challenge that requires strategic solutions.
Since 2020, return costs have soared, averaging a staggering 66% of the item's original price. The aftermath of a return extends beyond the return itself—labor, transportation, and inspection are intricacies that the business bears, even if the item is in pristine condition.
The reasons behind the surge in return expenses are multifaceted:
1. Higher Shipping Costs During Holidays: Peak shopping seasons usher in escalated shipping costs, casting a shadow over profitability.
2. Higher Warehouse Costs: The influx of returns amplifies warehouse expenses, adding yet another layer to the return cost conundrum.
3. The Phenomenon of Bracketing: Consumers ordering similar products with the intention of returning one amplifies the returns tide, further magnifying return costs.
The Advantage of Third-Party Return Management
In the face of mounting costs, businesses are finding sanctuary in the world of third-party providers for returns management. Here's why:
1. Streamlined Returns Management: Customer loyalty, a holy grail for brands, hinges on a seamless returns process. Outsourcing logistics ushers in streamlined returns management, reducing costs, and welcoming new customers with open arms.
2. Access to Expertise: A third-party fulfillment center unleashes access to knowledgeable and experienced staff. Operational costs are now calculated as a percentage of sales, transforming idle resources into a thing of the past.
3. Cost-Effective Shipping and Handling: The heart of customer loyalty lies in hassle-free returns. Outsourcing this crucial aspect means cost-effective shipping and handling, bolstered by third-party providers' relationships with shipping giants.
Returns are no longer a storm to weather alone. Discover how Portless can reshape your returns management experience today!