E551: Your Returns Are About to Kill Your Profits

In this episode, Mike and Dave dissect Amazon's latest announcement regarding Return Fees, how this will affect sellers starting on June 1st, and a possible option to combat these fees. 

Another day, another fee gets announced. It seems like third-party sellers are getting hit left and right lately with new fees, the latest one being Return Fees. In this episode, Dave and I are going to dive into the latest announcement regarding Return Fees, what this means for sellers, and how you can possibly combat these fees. 

The Big Takeaways 

If you're in a hurry, here's a few of the big key points from this episode: 

  • Starting June 1st, Amazon will start charging sellers $2-$4 extra dollars to process returns. 
  • This will only affect SKUs that have surpassed the return threshold in their category. The specific thresholds have been listed by Amazon here. 
  • To check for your product's return rate, check out Amazon's SKU Economics Dashboard which is available in Seller Central. 
  • Take into account your product's return fees, and double check if your products are still profitable. 
  • If you're over the Return Threshold for your product, increase your price. 
  • Turning on the “Returnless Returns” option for your most returned products can be a viable way to combat these extra charges. 

Timestamps 

  • Podcast Start – 0:00
  • Looking at return rates and return thresholds – 0:35 
  • The return fees announcement – 1:22 
  • The published thresholds for categories – 2:21
  • How return fees affect your products profitability – 3:30
  • All the new fees to think about – 4:54
  • Tip: The SKU Economics Dashboard – 5:20
  • How the Return Rate Thresholds are calculated – 6:08
  • What sellers should do – 6:56 
  • Mike's most returned product – 7:05
  • Tip: How to “possibly” combat these return fees: turning on returnless returns – 7:47
  • Dave's most returned products – 10:33
  • People taking advantage of Amazon's return policy – 11:26
  • The automotive category's return threshold – 14:11
  • The silver lining: being forced to double check operational costs – 15:39 
  • Return fees will be charged for units above the threshold – 19:12
  • How return fees compare to storage fees – 20:46
  • Return fee predictions – 21:43 
  • Catching up on Hockey with Dave – 21:57

Links to Tools Mentioned: 

Dave, thanks again for coming on the podcast! It was nice catching up with you again, and I look forward to the follow-up episode we'll do about returns soon. 

If any listeners would like to have a discussion about this, let me know by emailing us directly at support@ecomcrew.com.

Also, if you have any questions or any topics you’d like us to discuss on the podcast, you can email us directly as well! We would really appreciate it if you would leave us a review on iTunes

Thanks for listening!

Michael Jackness

Michael started his first business when he was 18 and is a serial entrepreneur. He got his start in the online world way back in 2004 as an affiliate marketer. From there he grew as an SEO expert and has transitioned into ecommerce, running several sites that bring in a total of 7-figures of revenue each year.

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