eCommerce Return Cost Calculator

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eCommerce Return Cost Calculator

Customer returns in eCommerce are higher than in traditional brick and mortar stores. When shopping online, buyers only get to see the product images or read product descriptions and reviews. On the other hand side, the shopping experience in brick and mortar stores allows customers to evaluate the products of interest more thoroughly in a real-life context. Therefore, returns are less likely in brick and mortar stores when compared to online marketplaces. The return policy in eCommerce is normally in favor of the buyer because online sellers aim to avoid unnecessary negative reviews and provide the best possible customer service. In fact, customer service has a substantial impact on seller ratings and online sellers want to keep these up. Although returns will affect a seller’s eCommerce ROI, it is more important to have a high seller rating for two reasons. First, customers place more trust in sellers that have higher ratings. Hence, sellers with high ratings will be able to increase their sales faster. Second, marketplaces like Amazon take the seller rating into account to evaluate the Buy Box winner. Since the Buy Box is an integral part of increasing your sales on Amazon, sellers should be determined to keep seller ratings up in order to remain competitive. This highlights that sellers do not want to put their seller ratings at risk and that returns can be considered a cost of doing business in eCommerce environments.

Return cost calculator for eCommerce sellers

Customer returns have a substantial effect on the eCommerce return on investment for sellers and it is important for sellers to estimate the associated costs of returns reliably. For this reason, Algopix has just released an eCommerce return cost calculator. This tool will allow sellers to estimate the potential cost of returns and anticipate incurred losses from returns. As returns will have an impact on profitability, the return cost calculator can be leveraged to get a realistic perspective on a business’s financial performance. Once sellers accelerate their sales and experience returns first hand, they will be able to estimate the number and cost of returns. Based on these insights, the likelihood of unexpected expenses or even losses is avoided. The insights gained can also supplement the output of a return on investment calculator for eCommerce.