Selling on Amazon is all about making a profit. But no matter what, you will have problems along the way. Returned products are annoying to all retailers and can drive them crazy. When products are returned to you, customers are not 100% satisfied with their purchase. This puts you at risk of losing your username or even suspending your account.
Another factor that makes returns a nightmare for Amazon sellers is cost. Over the past few years, the cost of shipping (of course, paid by the seller) has increased by 75%. In 2020 alone, the cost will reach $550 billion. There are many!
Therefore, as a seller on a platform with many rules and regulations, you should always monitor your return rate and do your best to reduce it. If not caught, these rates can hurt your profits or, worse, put you out of business. In this article, you will better understand the rate of return and then you will be introduced to some useful ways to reduce it.
What are Amazon returns?
Any Amazon seller can get negative feedback or reviews on their products. Let’s face it: bad experiences happen. It is natural. But the important thing is to prevent these bad experiences. The term “Amazon return rate” refers to the rate of returned products divided by the total number of sales (multiple times calculated at the same time). This includes orders returned by the customer or refunds by Amazon.
What is ODR?
As an Amazon seller, this metric can be useful to you as well. Order Defect Rate or ODR is a performance metric that shows how well sales are (standard is customer service expectations). ODR is calculated based on the number of times the negative metric was written by the total number of orders.
How is the rate of return calculated?
Now that you know this rate, you may be wondering how it is calculated. This rate is calculated as a percentage, as below:
The number of orders returned (or refunds) due to product problems divided by the number of orders shipped.
Why do customers return their purchases?
A customer may choose to return a purchase due to:
- They received defective or damaged products
- The size does not match them (this happens in some cases such as clothes or shoes)
- Product quality does not meet customer expectations
- The product description page does not give the customers the details they want
- The product is delivered in a very timely manner
To help reduce the rate of returns, some sellers work with Amazon FBA Business. This is a service that can reduce your workload and help you focus on quality products and successful shipping. FBA or Fulfillment by Amazon allows sellers to outsource orders to Amazon itself. Working with FBA will allow Amazon to take care of the entire process of picking, packing and shipping. Amazon also offers customer service and returns. Most of the time, Amazon FBA return rate is low.
How do I find my return rate on Amazon?
To reduce the recurrence rate, you must first study it thoroughly. But where are the numbers? To find your overall refund rate and refund amount:
- First log into Seller Central on Amazon.
- Click on “News”.
- Click on “Job History”.
- Here you will see the “Sales Dashboard”. From this dashboard, you need to click on “Seller” and the option under “By Date” (on the left side of the screen)
- Now you can view metrics sorted by date. The “reimbursement rate” is also here.
What happens when your Amazon bounce rate is high?
As we mentioned earlier, Amazon will not accept high return rates. But some products can be returned, not because you are a bad seller, but because they are. Let’s take a look at the return stats for some categories:
- Books and media: 5-7%
- House, kitchen and garden: 8-10%
- Consumer Electricity: 25-35%
- Clothing and fine jewelry:
up to 40% Amazon checks the number carefully and considers a return rate of 10% normal. If your account has a rate higher than that, you will receive a performance rating, and then Amazon will remove the product page (or may even suspend your account). After that, you will send a complaint and retrieve the list.
How can you reduce your Amazon return rate?
There are certainly ways to reduce the return rate on Amazon. These may not be as easy as “Just sell better products”, but if you try to do them, you will succeed. Remember that reducing the rate of return is not an overnight job. It requires research and hard work. You can even limit your products. Here are some useful ways to reduce Amazon’s return rate:
Manage your prices and offer promotions
when your price is high, the customer expects a unique and high quality product. Needless to say, he will often be disappointed after getting a computer.
If possible, test different prices and make improvements from time to time.
Show, don’t tell!
One of the best ways to introduce a product to your customers is to show them exactly what it is and how it works. Especially in electronics, it will work wonders. Once the customer has seen the functionality of the product, the risk of returning it will be greatly reduced. Add high quality video and detailed images. You can easily do this with your phone. Your customers will be interested in seeing all aspects of the product.
Write a winning description
Often, returns happen because the customer didn’t get exactly what they expected (remember those “what you order, what you get” memes?). If a product is returned more often than expected, you should take a look at the following lists. Edit your product description and add details. Things like dimensions, weights, size charts, properties, warranty information, and… Explain exactly how to use it and the pros and cons. In the article “How to increase sales on Amazon”, you will find accurate and up-to-date advice on writing and increasing sales. Check it out if you’re looking for ways to sell more.
Add a size chart
some items require clarification such as size. If you sell clothes, shoes, or accessories, your customers need to know their size and make sure they buy correctly. Upload a picture and enter the correct values. This way every customer can take measurements at home and buy their size. Most returns are due to incorrect measurements. Remember that Amazon has its own equivalents and you should know about them.
Make shipping as smooth as possible
No one wants to receive a damaged or damaged product, especially after a long wait. One way to lower your Amazon FBA return rate is to make sure your products are packed and ready to ship. You can’t prevent an epidemic or post a challenge, but you can control your own posting process.
Your first step to a low return rate is to understand why it happened in the first place. Customer reviews are valuable to every seller on Amazon. When people write something negative, you can easily get to it.
Choose strong packaging
Many Amazon purchases arrive broken, wet, or even completely damaged. Pack your products well and make sure they can withstand their journey.
Avoid articles with high return rates
This may not be good advice for sellers who have been selling things like jewelry and clothing for years, but if you’re new to Amazon, don’t pick up your products. Read about Amazon products and find out which packages get the most returns. You’re better off avoiding them, at least in the beginning. Some articles have high return rates. About clothes and fine jewelry (about 40%) and consumers (25-35%).
Pay attention to FBA products
Your Amazon return rate can decrease when you support FBA. Make sure you send them good and high quality products so they don’t come back. Please do not take this endorsement lightly as it affects your brand name and even your seller account.
Have a data-driven approach
data helps you identify the causes of past relapses and prevent future relapses. Collect data on unhappy customers and find out why they are unhappy. Data is the foundation of a successful business today. You should ask questions like which products are returned the most. Or what is the main reason for the return?
To analyze the issues, Amazon itself has given you an option. Just go to Seller Central and select the Customer option, then click Return. Here, you can select a period and see the return report.
You can’t solve a problem without knowing the cause. If you don’t want to open your Amazon account one day and estimate the number of returns, it’s better to think ahead. An ounce of prevention is better than a pound of cure. Check your profile and make a note. What could be better? Where are your weak points? Which products have the worst reviews and disappointments? Start solving problems one by one. It may take time, but the results will affect your return rate and make you a better seller on Amazon. What does it mean to be good? Marketing and other income!