Impact of Prepaid Return Label, First Thoughts - Update
The change in Amazon’s return policy impacts sellers of inexpensive products radically. The minimum return postage of £2.75+ v.a.t. is very likely to exceed the margin of gross profit of many products.
I’ve mulled it over and have concluded as follow’s.
When I started in business, I had access to cash, I converted that cash into products that I thought were worth more than I purchased them for. So, I purchased the products put the products on sale and the theory worked.
Fast forwarding, I still offer products for sale, different now of course, but that is what I bring to the Amazon table, products. I effectively don’t bring cash, I bring products, I might have to retain some of the money that buyers send to me for costs including Amazon fees etc…
So, if the new return policy, of having to pay for an tracked, return label, the only person that brings cash to the transaction is the buyer, I just handle that money and disperse it as I have/ need or want to.
If like a lot of sellers have the mind set that it is them that have to pay for the return label, they are mistaken, if it ends as the payment does get paid by them, then that is the route to bankruptcy, … sooner or later.
So, what is my game plan, my current prices don’t have the gross margin within them to allow for a percentage to be returned by the new Tracked service. So I need to readjust that gross margin, so that it allows for the newly introduced liability. After all I don’t bring money to the table. all money is supplied by the purchaser, I just handle it.
Of course, there will be an impact on sales, but looking on the positive side, this will also mean less returns.
It is unfortunate for UK sellers to have been discriminating against in this manner, but we have no control as to the rules, just a binary choice …take it or leave it
There must be another solution, any suggestions…
Impact of Prepaid Return Label, First Thoughts - Update
The change in Amazon’s return policy impacts sellers of inexpensive products radically. The minimum return postage of £2.75+ v.a.t. is very likely to exceed the margin of gross profit of many products.
I’ve mulled it over and have concluded as follow’s.
When I started in business, I had access to cash, I converted that cash into products that I thought were worth more than I purchased them for. So, I purchased the products put the products on sale and the theory worked.
Fast forwarding, I still offer products for sale, different now of course, but that is what I bring to the Amazon table, products. I effectively don’t bring cash, I bring products, I might have to retain some of the money that buyers send to me for costs including Amazon fees etc…
So, if the new return policy, of having to pay for an tracked, return label, the only person that brings cash to the transaction is the buyer, I just handle that money and disperse it as I have/ need or want to.
If like a lot of sellers have the mind set that it is them that have to pay for the return label, they are mistaken, if it ends as the payment does get paid by them, then that is the route to bankruptcy, … sooner or later.
So, what is my game plan, my current prices don’t have the gross margin within them to allow for a percentage to be returned by the new Tracked service. So I need to readjust that gross margin, so that it allows for the newly introduced liability. After all I don’t bring money to the table. all money is supplied by the purchaser, I just handle it.
Of course, there will be an impact on sales, but looking on the positive side, this will also mean less returns.
It is unfortunate for UK sellers to have been discriminating against in this manner, but we have no control as to the rules, just a binary choice …take it or leave it
There must be another solution, any suggestions…
0 replies
Seller_P9WE9DmQhKbaT
Are you saying that higher costs means higher consumer prices.?
Seller_Yja9oH7DLHk2I
I am more worried about customers making up reasons to get the free returns.
These will include item not as described and used sold as new. We all know what Amazon does when it sees those return reasons. So it is not just the cost of the return label, it is also the cost of dealing with the almost impossible task of trying to get products reinstated.
Seller_6sxtIS0RbZ5k7
I don’t have a RM account so I’m not sure if this is even possible but, can you buy letter postage on there that you aren’t charged for until it is scanned? If it is, is it worth the people selling low-value items putting a return label in with the package so the customer never has to open a return on Amazon?
Seller_0msMReDTskp1Y
We sell accessories and most of our returns arise from customers buying the wrong part after being misled by Amazon search (customer needs an accessory for device X, searches for it, Amazon offers accessory for device Y, customer buys it and complains to us when it doesn’t work). We’ve tried to stop this happening as it is a waste of everyone’s time and money. Now it seems it is going to just be a waste of our money.
Seller_AosJD54bRJJWc
what about the impact its going to have on customers ordering multiple items/sizes as they now know they can just return the ones that dont fit for free?
Seller_FGrlSKDjwty1z
I managed to upload all our SKUs on the sheet they produced. Asked for exception on the basis of our items being HAZMAT / liquids. Remains to be seen if our items are exempted. We do not have many SKUs, feel sorry for those with thousands. Our prices will go up to cover this if not + if Amazon is forced to pay more tax as per news items they will pass it on to us so more price rises for customers. Quite depressing really its another layer of problems faced when selling on Amazon, they certainly like to make it hard. Imagine how much better they might do if we could list items easily and just sell them, or if seller support was not so unrelentingly poor. We reduced all our SKUs by approximately 70% to cope with all the issues selling on Amazon creates. I was hoping to add a few back in again at some point will not be doing so now. Thank god we also sell viaour own website!!
Seller_g84uEizcbEKaK
Its easy for Amazon to spend other peoples money.
We get many return requests for a particular £300+ product simply because people don’t assemble it correctly. We point them to our video on the subject and all is well. But with this daft policy, they’ll all come back. We’ll start putting an explanatory insert in to counter this.
But that’s just one line. We have cheap £5 -15 lines that we can’t pay £2.75 for random returns. But I wont give it away so we’ll be pulling many lines off here.
Of course people will be abusing it and returns will go through the roof once this gets out. So lines that remain will have to have another price increase. We allow 20% fees for selling on here (15.3% plus any ads, fraud, extra CS, extended return windows, extra work with twice yearly account freezes, etc). It probably needs to go to 23% or 25% with this to cover costs.
Moving forward, we’ll slim down here. Keep the lines that have almost zero returns going. Other fast moving stuff push onto FBA, and radically scale back any seller fulfilled. Or increase the price to counter the added expenses.
Seller_t1stbSYkguzWr
At first glance all I can see that this is a car crash of an initiative. As a consumer I love Amazon for how easy and no fuss things are, and how easy it is to get things sorted, but since becoming a FBM I must admit its a horrendous platform. I think they should actually make seller university an actual institution as you need a degree to navigate all of the pitfalls that they create themselves. The biggest issue I have with this is it opens the door to scammers. Amazon is already awash with rogue buyers out there who know that for most of us anything less than 15 or 20 quid isn’t worth the postage or hassle to get back in…so they get free stuff. With the threat of A to Zs, not to mention messages to customers which they don’t even see it ends up not been worth the time to actually follow up and chase or ask for evidence etc.
The fact that you can go into almost any Range, B & M, Ebay or Amazon marketplace and see the EXACT same item but just at different prices is unreal. Do they really think that people don’t find a product they like, google it for the cheapest price and purchase from there anyway? There is now so much cheap tat for sale on Amazon that makes you wonder if they are doing this to actually drive some of those vendors away.
It would just be nice if Amazon remembered that we too are technically also their customers once in a while.
Seller_g84uEizcbEKaK
Am I correct in thinking that return costs with FBA are absorbed into the existing Amazon fees and sellers don’t pay extra for those? If so, FBA is the way to go if your margins allow.
Seller_LPyAcrgO3zR2D
It was only a matter of time before Amazon made this decision. As for ‘negotiated’ return rates with chosen couriers, Amazon pretending that they are doing US a favour? Ha ha they still are making money on these rates probably only pay 75p from Hermes!! Wait till Christmas return window opens… Abused springs to mind
