Avoiding Product Returns May Help Grow Your E-Commerce Business
May 26, 2022
The Harsh Reality of E-Commerce Shipping
A Crippling Statistic
One of the most interesting statistics among e-commerce businesses is product return rates when compared to brick-and-mortar stores. In 2021, the average rate of returns for online purchases was 30%. Among returned orders, 20% were due to customers receiving damaged product. (source: invespcpro).
The Claims Process SUCKS
Filing a UPS claim is quite literally the worst thing ever. I would rather fold 30 fitted bed sheets than spend my time filling out the paperwork for a damage claim. The paperwork combined with the back and forth emails with a claims department and the weeks (yes, weeks) of waiting to finally receive a check in the mail is something that is barrrrrely tolerable as a one-off occurrence – let alone at scale as your business grows. All this equals wasted money, wasted time, and unhappy shoppers who are already impatient to begin with.
How Can The Right Packaging Help?
Proper packaging and safe product shipping has the opportunity to provide a competitive edge for your business. We believe in packaging that minimizes/eliminates damage while maximizing product protection and unboxing aesthetics to put your brand in a position to succeed among countless competitors.
How Do I Know If I Have The “Right” Packaging?
Try to view packaging as an opportunity to add value to your product rather than dealing with it as a cost center.
Here are a few tips to consider. This is advice that I have shared with businesses over the years as a packaging consultant. I still adhere to them today when developing Flush products. I believe changing the fundamental way we view packaging creates an environment to capitalize on an opportunity to get the most out of your packaging.
Packaging Should Be Repeatable
Consistent packaging is paramount when trying to scale your business. Building consistency through packaging will minimize packing time and excess waste while creating a strong base upon which you can scale your business. Allowing opportunity for variability in your packaging will manifest itself through damage:
Inconsistent amounts of cushioning materials
With products like bubble wrap and packing peanuts, it's hard to maintain consistency with scale. As a result, some shipments may receive more cushioning than others.
Variation in product orientation within a shipping box
Product stacked on each other with no regard to maintaining sufficient air-cell space.
Random product placement within a shipping box
Product placed along the inside edge or corner of a box making it susceptible to edge/corner damage.
Packaging Should Minimize Your Costs
Just because one form of packaging costs $.50 less than another does not necessarily make it less expensive. I have seen many companies use this approach when trying to cut packaging costs. Often times it leads to other unforeseen costs like:
Added assembly time
If a less expensive type of packaging takes longer to assemble, pack, and tape, then it could lead to added labor costs for fulfilling a product.
Higher damage rates
Cheaper packaging in general may come with increased risks of damage during shipping. For small businesses, it's difficult to absorb these costs.
Compromised unboxing aesthetics
Typically less expensive forms of packaging can come with a tradeoff in regards to the overall unboxing experience. Risking an unappealing first impression on your customer may cost you the loyalty of that customer.
Higher shipping costs
Less expensive forms of protective packaging (e.g. bubble wrap, packing peanuts) usually require shipping boxes that are quote a bit larger than the product being packed. Larger boxes may cost more to ship due to a concept called "dimensional weight". We touch more on this topic here where we discuss how dimensional weight is calculated and how it can impact your shipping costs. Ideally, we want to avoid being charged for dimensional weight.
The costs of dealing with damaged products can be crippling. The combination of costs for replacing broken items, paying for a replacement shipping label, and the time a customer remains without product impacts the reputation of your business and greatly reduces the chances of a customer returning to purchase again. However with a fresh outlook towards protective packaging, small e-commerce businesses can better navigate the harsh realities of shipping to reach new levels of growth.
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