Let’s start straight. The success of any business is determined by four factors:
- Increase in top-line
- Increase in bottom-line
- Increase in customer-base
- Happy and satisfied customers
Almost every business strives to increase its bottom-line by putting more efforts in generating more revenue. However, the actual success of a business is dependent on its brand image and brand loyalty. The word-of-mouth publicity, spread by loyal and satisfied customers, face-to-face or through reviews given on digital marketplace gives a permanent boost to the brand value of your business. Products with top-notch quality are one of the important factors to increase your happy customers’ base. However, there are many other factors that create loyal customers for a business, such as:
- Perceived value of your product as compared to its price
- Order management, order fulfilment and after-sales services
- Number of variants available in a product
- Customer relationship and support
Out of all the above mentioned factors, order fulfilment services provided by a business have a significant impact on customer retention. Especially for E-Commerce retailers, an easy return service is one of the prime factors driving customer trust into their products. 67% of shoppers check the returns page of a seller before making a purchase. Furthermore, 92% of consumers will buy something again if they are satisfied by the way in which you handled return of your products. Hence, devising an on-point strategy for return management is vital to increase your customer base, sales and ultimately profit.
However, return management requires an efficient policy and accurate stock handling. Many challenges occur at inventory stage when a request for return is initiated. The prominent factors involved here are:
- Drafting optimal return policy: As mentioned earlier, customers are attracted to buy products from sellers to whom it is easy to return the products if they change their mind afterwards. Devising a return management policy that can build customer and does not affect your business’s bottom-line at the same time, becomes a challenging task.
- Maintaining warehouse efficiency: When you forecast your order demands through sales data from different channels, at that time it is also important to predict the percentage of products that you would be getting back. However, predicting your returns cannot be done as easily as forecasting demand. As a result, unpredictability of returned stock complicates all the warehouse operations.
- Refund costs: The unprecedented returns create complications in warehouse management and increases processing cost per item. Moreover, when unsatisfied customers return products, a business incurs heavy loss on both shipment costs and brand reputation.
While all these challenges appear to be in different dimensions, there is a single solution to all of them and i.e. effective return management. Cost of operations can be minimized with proper return management and seamless interaction platform with logistic partners and vendors. However, there are these three things that every business needs to take care:
Create an effective return policy
Devise a customer-friendly policy that will encourage a customer to buy your product without any fear. There are many e-commerce platforms, who emphasis on their returns policy as a unique selling point (USP). Therefore, you should create an effective returns policy that covers the following aspects:
- Reason of return
- Product margin
- Location of return
- Product discount
Automate the returns process
Efficient stock management software can automatically handle returned stocks to eliminate the complications arising in warehouse management. There are a very few standard inventory management software that provide return management features that offer:
- Automatic refund to the customers
- Restocking of returned items
- Organised database for sorting the returned stock
Invest in reverse logistics
By investing in reverse logistics you can cut down the cost of returns. By restocking and listing the returned items you can overcome the loss incurred in the return process. If you have an automated inventory management system that integrates your orders as well as returns, you can easily sell your returned stock. Furthermore, investing in reverse logistics also gives you several benefits such as:
- Reduced shipment costs
- Increased stock usage
- Improved customer relation
- Increased velocity of stock transportation
Thus, by taking care of the above mentioned three things you can easily manage your returned stocks. With the help of effective order management tools, you can overcome the problems arising in return management. Thus, you can ultimately convert the returned stock into an opportunity to increase your sales as well as customer satisfaction
Krishna Jani is a content specialist with 10+ years of experience in the field. Presently working as a professional writer for Orderhive, no.1 inventory management software that powers several businesses all across the world. She is an avid birder and nature lover who loves to explore national parks and wildlife sanctuaries during her leisure time.
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