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Published on August 31, 2021

The return society: How to minimize your business costs

Amazon is often accused of decimating small business. Certainly, it has made survival harder with new norms of “FREE SHIPPING” and “FREE RETURNS.” These obviously aren’t free. If you don’t have Amazon Web Services to subsidize you, online selling can turn out to be very, very expensive. The problem is that customers have come to expect it as their right. And not just free shipping…free overnight shipping and returns for any reason whatsoever.

The way around this to both work with human emotion AND manage expectations upfront. The first step, however, is to return-proof your offering as much as possible. Make sure that your good/ service is working, complete, and the best quality you can afford to provide. Next, ensure the description is as exhaustive as possible, and then add more. Offer sizes and dimensions in multiple measurement systems (metric/imperial, small, 0-2 etc). Then take numerous, quality photographs from all angles.

Depending on the cost of the article, it may even be worth it to invest in providers/ software that can provide 3D/ augmented reality visualization (like threekit and 3Dsource). Upload them and if the color is misleading, do it over. Remember that some people don’t read product descriptions, so convey size by taking photos in relation to a relatable object or on a realistic model.

Now to the emotions part. People react strangely to the word “free.” They also dislike shipping costs, which seem like an unnecessary evil (thanks Amazon). So bump up the price and offer free shipping. Then research ways to do it cheaper. This includes things like using the optimal amount of packaging, going with multiple carriers for different weights, making more use of bubble mailers, and dumpster diving grocery stores for materials. I say optimal weight of packaging because if you use too little, the good will be damaged and your return bill will bounce up again.

The next step is to manage expectations. Returns are costly both to you and the environment, so you can politely keep this front and center in the consumer’s mind during the purchasing process. According to global newswire, returns of products purchased online generate five billion tons of trash and 15 million tons of carbon dioxide annually. Mention your commitment to denting this figure while stressing consumer satisfaction. Hotels gently nudge people to re-use towels.

In a similar manner you can include a step in your shopping basket that notes the environmental impact and offers a link to FAQs or a chat to ensure the product is absolutely perfect for the customer. Then when you ship, offer them an option of longer shipping as a way to help you batch orders and minimize their carbon footprint.

Depending on the cost bracket of your good, you can also work on people’s emotions when packaging. Include a personal note or small token makes people feel a little guilty about returning something they could otherwise live with. Sometimes this can also be a way for you to help other small companies with affiliate products or similar target markets. It can help them with exposure and you with lower returns, not to mention a more satisfied customer.

 

Article written by Krista Tuomi. 

Krista Tuomi is a professor in the International Economic Policy program at the School of International Service, American University. She has worked as a policy analyst in the areas of innovation and investment, and recently her focus has been on best practices in the startup investment climate, particularly on policy related to angel investing, crowdfunding and seed financing. Her passion for the field of innovation and entrepreneurship extends into her volunteer work, which includes SCORE, Boots to Business, the Veteran Small Business Challenge Competition, Syracuse’s Institute for Veterans and Military Families, and the Angel Capital Association.

Initially published on Bizwomen.

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