Using Amazon’s Fulfillment by Amazon (FBA) program is a popular way to get started selling products on the marketplace. Sellers who use FBA have a higher chance of obtaining the Buy Box and experience the conveniences of having products in Amazon’s extensive fulfillment network.
However, very little about selling on Amazon is simple. Amazon sellers, both new and established, are familiar with FBA fees, with a significant pain point for some being the cost of customer returns. Amazon has a generous return policy for most categories. FBA returns can reduce sales and cost money for a Seller Central account in several ways.
The Cost of FBA Returns
First, there are the fees. Sellers still incur fulfillment fees and may also be charged refund administration fees when a product is returned. If the returned item is damaged or unsellable, Amazon may not reimburse the full value of the product, which is a direct loss to the seller. Then, those returns run the risk of leading to negative customer reviews, which can damage a seller’s or brand’s reputation. This social proof alone negatively impacts the product’s visibility, lowers conversion rates, and can hurt overall sales.
Returned inventory that cannot be resold accumulates storage fees, which the seller is responsible for, and must be removed from Amazon’s storage facilities at the seller’s expense. On top of fees and negative customer feedback, Amazon may suppress or delist products with excessive returns. All of this combined means that high FBA returns erode profitability and hurt a seller’s account health, which makes it difficult to win the Buy Box or enjoy the benefits of the FBA program in the first place.
Using Return Reasons to Your Advantage
It’s not all doom and gloom, though. Before returns become a large problem, sellers can, and should, look at the reasons customers return their items and pay close attention to any feedback they provide. Use the data that customers give you. If there are complaints about certain features the product is supposed to have, consider how you might improve the product.
If customers are unclear on how to use the product or its features, this could be an opportunity to update the content on your product detail page. Answering common complaints and questions about the product can give shoppers more confidence in the product and help prevent future returns. The more images of the product you can provide, the better. Even more so, having a relevant video to use would be beneficial.
Clarify Product Instructions or Improve Product Fit
If the main reasons behind customer returns are poor fit or unclear instructions, then clarify how to use the product, explain its purpose, and provide clear instructions on the product page itself, even if the product already comes with instructions in the package. Many Amazon shoppers may return to the product detail page to find instructions or clarification if they’re having trouble.
While the title and bullet points on a detail page have strict character limits, enhanced content modules are available through Amazon A+ and the Brand Store. Sellers can use this highly customizable Amazon real estate to inform shoppers about the product, as well as set customer expectations on the quality and value of the product. Based on the frequency and amount of questions you receive from return reasons, reviews, or even questions users ask before purchasing, you may have enough information to create a helpful FAQ section.
Evaluating Pricing and Competition
Price-conscious shoppers may return products when they find a cheaper price from another seller. The frequency of this return reason suggests that the seller needs to reevaluate their current selling price in relation to their competition. Amazon offers a repricing tool at no additional cost to sellers who have a Professional selling plan. Sellers can set parameters and thresholds in this tool to prevent pricing issues, though we still recommend monitoring price changes.
Key Strategies for Reducing Returns and Boosting Sales
If customers express why they’re unhappy, then sellers have a chance to address these issues and make them happy. Improving the product, product page content, and overall customer experience can also increase your product’s rankings on Amazon. The bottom line is that insights gained from customer feedback and return reasons can enhance both the customer experience and your own experience selling on Amazon.
