Anticipating and Accounting for Spoilage
Most successful high-volume Amazon sellers understand the frustrating inevitability of dealing with customer returns. These sellers need to be familiar with the concession rates for each of their products, and how each relates to the industry-wide return rate.These rates are important because they help sellers understand how to incorporate losses from spoilage in their projections for cost structure or when developing a business plan. It's also crucial for high-volume sellers to monitor their Amazon seller performance metrics on routine basis.
Sellers need to be aware of the industry-wide return rate as well. In the used business and consumer electronics sector, the return rate is exceptionally high, so sellers should be aware of this fact and adjust accordingly. In order to avoid reaching a higher return rate than expected, Amazon sellers should make an effort to be extremely accurate in describing the condition the item is in. When creating the description for the item, the most successful Amazon sellers are often very detailed in their wording. Using an accurate image of the item in its packaging is also essential.
Many high-volume sellers benefit from offering an assortment of items with a ride range of concession rates and characteristics. This is evident in the consumer electronic sector where successful sellers typically offer a broad selection of average selling price items in the PC category with low return rates, such as PC monitors. Since these items have low concession rates and low profit margins, they bring a lot of positives to the account, allowing sellers to go after larger unit buys or more popular high ticket items like iPads and surface tablets.
High-volume sellers understand that importance of getting rid of products that don't sell. Moving on and taking the loss is far more valuable than being hamstrung by unpopular items. When the margins don't add up, sellers can end up essentially paying Amazon out of their profits when paying on the extra fees from returns. Successful sellers account for the FBA fees and adjust their pricing and expectations accordingly. The extra fees may add up to close to 30 percent, but operating as an FBA seller still saves far more money long-term.
A huge part of seller's ability to win the Buy Box is related to their return rate and the negative feedback left by customers. Successful high-volume sellers anticipate how return rates may be affected by external factors like the holiday shopping season. Many of these sellers use data to help determine whether specific ASINs should be discontinued or not based on their return rate and the current shopping cycle. Sellers can use a customer concessions returns report to identify the products with the highest rate of returns or negative feedback
Successful high-volume sellers understand how and when to cut their losses. They also know that their inventory management is affected by how strict or lenient their current return policy is. Adjusting inventory expectations with how returns may be affected by the shopping cycles or marketplace dynamics is how many high-volume sellers add on to their net profit margins.