Impact of returns on E-commerce business

Last week, I was on a Zoom call with my dearest friend Magdalena Radzka along with a few of her friends who are in the fashion sector.

Post listening to them on their expansion plans in GCC, I asked them a question –

“Have you figured in the cost of returns in your pricing?”.

There was a pin-drop silence as the answer was evidently ”No”.

I narrated my experience of handling an abaya client in the past wherein we figured out that the returns due to size issues were the highest and ate the brand’s profit margins.

“Reverse logistics in e-commerce is the biggest margin eater”, I replied.

I narrated to them a solution that I had implemented with my abaya client and helped them to resolve the issue of the return to a great extent.

The solution also helped the client to upsell and increase their ticket size.

Few things to take care of in an e-commerce business

a)?? Control your Customer acquisition cost.

b)?? Increase your Customer lifetime value (CLTV)

c)?? Increase your UPT (units per transaction)

d)?? Add new customers into your channel

e)?? Focus on maximizing gross margins (GMROI).

To Learn how Sephora is keeping its innovative quotient high, click here.

To develop an influencer marketing plan, click here.

In case you want any help to re-energize your e-commerce sales then schedule a free -coffee chat with me by emailing [email protected]

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