Hello and welcome to the WeSupply. This is Virgil.
So majority of the companies are actually losing a lot of money, and they have a really hard time processing returns, mostly because all the returns are going back to one centralized location.
So let me just give you this example:
Let’s say you’re, you have a web store, and you’re selling, you know, in US, and you have multiple warehouses, one on the East Coast, one on the West Coast. And let’s say your customer is on the East Coast in New York City. And they are trying to return a product. Now, where do you return that product on the East Coast warehouse or on the West Coast warehouse? Well, most of the returns are going to have one centralized location to return on product. And this is mostly happening because they do not have a system in place to actually route each product to the right location.
So if we think about it, we have a lot of challenges these days, actually. So as I said, you know, if you have multiple warehouses, for returns, takes a lot of time and money to process these returns. And if you work with drop shippers, or different vendors, for example, let’s say you’re selling lifestyle products, from clothing all the way to furniture, the clothing might come from one company, right? From one vendor from Nike or whoever it might be, you know, whatever, it’s going to ship the product for you as a drop shipper, but the furniture might come from a completely different company.
So if the customer purchases both products, where do you actually return those?
Are you going to return them to one location or another? What what are you going to do?
And the same thing can happen if your company’s returned locations are not equipped to process these products. So for example, you’re selling bathtubs, right, and you have a big bathtub hundreds of pounds, very heavy product. But you’re also selling accessories like the faucet, you know, or different fittings, whatever it might be. If you return that entire bathtub to the warehouse that is not equipped to receive that heavy product that is not equipped to lift that heavy product, how are they even going to process that return?
It’s very, very challenging. And many, many retailers are actually facing this problem every day. As I said, you know, one of the biggest challenges, you know, like in efficiencies, you know, like, you have multiple warehouses throughout the country, but you’re always sending back all the products to the main location, it can be a nightmare, honestly, it can be a nightmare.
The customers these days are demanding transparency. So a few weeks ago, I watched, there was a 60 minute like, video on YouTube, in which a company actually researched How is Amazon you know, handling returns, you know, where they are sending back each product, and if they are disposing those products or repairing those products, to make sure that they are reducing the carbon footprint. You know, they process returns in a sustainable fashion. products that can be recycled are actually recycled and not dumped into the landfill
And for example, if you’re sending specific products such as mattress, nobody’s going to sleep in your return mattress, right? Usually those products are sent in to donation centers where they’re cleaned, you know, and basically donated to a person in need. So, if you think about this entire situation, returns are not just challenging processing them, but the entire logistics behind and if you have, you know, highly discounted products final sale, kind of things, you want to return those products to maybe an outlet or a liquidation store instead of back to your warehouse and from that warehouse to, one of your locations. So, a lot of challenges, but in the same time, you have a lot of opportunities.