amazon follows up with "refund only", what do merchants think?
2024-08-31
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domestic e-commerce companies have launched "refund only" services one after another, and cross-border e-commerce companies can no longer sit still.
recently, amazon released a "refund without return solution" for sellers, which means "the seller provides a refund or exchange and allows the buyer to keep the original product. the seller can automatically issue a refund or exchange based on the rules defined by the seller without the buyer returning the product."
some sellers believe that the program harms their interests, while others say that the service is reasonable. in amazon's view, the program helps save costs incurred by high return rates, buyer return processing, warehousing and removal.
there is constant controversy over “refund only”. what do sellers think?
taobao once caused considerable controversy due to its “refund only” service, and this time amazon’s launch of the “refund only” service has also attracted attention.
regarding amazon's follow-up, bao haojing, general manager of hangzhou yuanqi shizu information technology co., ltd., told china business news, "in the past, consumers might have bought and left the goods alone, but now they will return the goods if they buy too much. the store's return rate this year is one percentage point higher than in previous years. in addition, the logistics costs of returning goods after users choose to return them need to be borne by the platform, but 'refund only' can reduce this part of the expenditure."
in addition to reducing platform costs, the service is also beneficial to sellers in reducing costs. bao haojing said that under normal circumstances, "returns and refunds" are divided into two situations. one is that the product has no quality problems but the consumer wants to return it, and the seller can resell it after the return. the other situation is that the product has quality defects or the product quality is affected during the return process, and it cannot be resold.
"we often encounter the second situation, where consumers return the goods to amazon warehouses. the packaging boxes are damaged during amazon's transportation and cannot be sold again. for the second type of return, not only does amazon need to bear the return shipping costs, but the seller also needs to bear the disposal costs." bao haojing said.
in reality, there have been cases of refund only in the past. "for example, if a customer complains that there is a problem with the product, we sellers will communicate with the consumer whether we can refund part or all of the payment, and the consumer does not need to return the product." bao haojing said that in this case, the seller also needs to pay the platform a commission for the transaction. if it is the above-mentioned refund only operation, the background will show that the transaction is completed normally, so the seller needs to pay amazon a commission and logistics fees. however, if a refund is only made through the platform, the platform will not charge a commission for this transaction. for the merchant, it only loses a product and shipping costs.
"amazon adjusted its traffic rules this year. if a seller's return rate is high, the platform will label the seller with a high return rate, reducing the seller's link weight, resulting in no traffic for the seller. after the return rate of subsequent orders decreases, the mark will also be cancelled. our sales increased a lot due to promotions a while ago, but later we found that the ads could not be burned, and we found that the weight was reduced. once the weight is reduced, it will affect the creation of links, and the seller's loss is the loss of several product returns. therefore, it is very important to control the return rate." bao haojing said.
amazon said in its solution that returns using the refund-without-return program will be tracked as customer returns and will be counted towards the asin’s average return rate, but will not be counted towards the high return rate threshold.
another clothing seller, chen qi (pseudonym), who is trying the "refund only" service, said, "returns involve the return of unsalable goods, removal fees, storage fees, and whether the return is related to future return rates and resulting in sales fluctuations. this needs to be decided based on the specific circumstances."
zhang zhouping, chief researcher of bense think tank, told china business news that judging from the policy content, amazon’s “refund only” policy has set preconditions for refunds only, including price setting and authority selection for sellers and buyers, and it is not a one-size-fits-all policy that applies to all sellers and buyers.
industry competition is more intense
zhang zhouping believes that the current market competition is fierce. if amazon wants to continue to maintain its leading position in the market competition, it must learn from the competition, constantly improve its own competitive advantages, maintain its competitive advantages while expanding more incremental markets.
in recent years, platforms such as temu and shein have experienced rapid growth in foreign markets, which has also made giants such as amazon aware of the crisis. in may this year, the third-party e-commerce data platform ecdb released the 2023 us fashion e-commerce rankings. among them, amazon and walmart ranked first and second, and shein ranked third, ahead of traditional retail giants macy's and nike.
the latest report released by probolsky research in august showed that in the price war for us consumers, temu beat amazon, with 76% of respondents believing that temu is cheaper than amazon. temu's pricing is very competitive and very attractive to budget-conscious shoppers. however, 81% of respondents also said that amazon's delivery speed is faster.
in order to cope with the competition, amazon has launched a number of measures. in april this year, amazon announced that starting from may 15, it would provide discounts on sales commissions for low-priced clothing products in europe, japan and canada. the commission reduction varies in different regions. in canada, amazon's original sales commission for clothing products priced below 20 canadian dollars was 17%, which was reduced to 10% after adjustment. at the end of june, amazon communicated with sellers about the new project "low price store".
regarding amazon's various measures, seller chen qi said, "lowering commissions is a real benefit, and other measures have not yet shown results."
some merchants are still worried about the "refund only" service. zhang zhouping said that merchants are more worried about the policy being abused. in the implementation of specific policies, amazon should balance the interests of merchants and consumers, refine and further improve the policies, and constantly adjust the policies based on feedback from big data during the implementation of the policies, set the conditions and levels for refund only, and fully grasp the degree of control.
amazon's second quarter 2024 financial report showed that amazon's net sales in the second quarter of 2024 increased by 10% to us$148 billion, slightly lower than analysts' expectations of us$148.8 billion. as the data fell short of analysts' expectations, amazon's stock price fell by more than 6% in after-hours trading.
in the quarter, amazon's north american retail business had operating income of $5.1 billion, lower than the expected $5.4 billion. regarding the current consumer trends, amazon cfo olsavsky said that consumers are more cautious and prefer low-priced products.
(this article comes from china business network)
