Zappos: How to Make Profit by Offering Easier Ecommerce Returns

The e-commerce industry is getting a little too big for its britches, much to the delight of happy and bargain-savvy shoppers the world afar. According to a recent Forbes publication, B2B e-commerce will surpass $6.7 trillion in worth by the year 2020, thanks to sites like Amazon and Alibaba.

While e-commerce has certainly made many things easier – such as finding bargains, improved selection, always open store hours and so forth – it still lacks in one department overall: returns.

While retailers make it very easy to point and click your way to a new purchase, often the prospect of returning that purchasing is tough, and you usually have to wait and pay for return shipping, too, something that deters a lot of shoppers from various retailers.

But, new studies are finding that when retailers make the returns process simple, automated and hassle-free, profits improve by a large margin.

What We Can Learn From Zappos

Sometimes we can take a look at what other retailers are doing and borrow a page from their game plan. In this instance, it’s best to look at Zappos – one of the top online retailers of footwear.

zappos

They have a simple returns policy and model. If you don’t want it, return it. They pay return shipping with convenient front door pickup. In fact, returning a product is so easy – you just place it in the box and out front of your door after filling out a simple form online – that it’s faster and more convenient than visiting any shoe store. That’s the idea.

But Zappos sees almost half its products returned by consumers each year. And you would think that this would hinder and intrude upon their profit margins. But such is in fact not the case.

Zappos has explained that they make most of their profits off the customers that return things the most often. This is because these shoppers usually convert for a higher value. What’s more, they don’t shop anywhere else because they get the selection, deals and easy return policy they seek from this store.

Easy Returns Attract More Sales

Can you improve sales and profit margins by making returns easy and straightforward, just like Zappos does? Take this interesting Science Daily study as proof. When two retailers were followed over several years and more than 20,000 transactions, it was found that the group that offered easy returns earned more than 25% more profits than the group that did not. The only difference was the group that earned more offered hassle-free returns.

Customers Purchase More with Lenient Returns

Every year, UPS releases their Pulse of the Online Shopper report. This past year, the findings were astounding, to say the least. They found that more than 60% of people were actually reading your returns policy. If you don’t make it simple, most will shop at another store. But, when you do make it simple, over 40% of these people are inclined to make a future purchase during the same time that they place a return. Who would have thought?

The Key To Success 

We’ve established that easy returns are what consumers want. We’ve also shown you that when you make these returns simple and hassle-free, profits improve. And we’ve helped you understand what it is that consumers want and why they want it. Now the only thing left to show you is the software you can use to automate e-commerce returns. With this kind of availability, getting your store up to par with the industry leaders is just a few clicks away.

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