How Amazon’s Broken Returns Process Is Driving Sellers To Leave Amazon

Brief Summary

This video explores the complex and costly issue of product returns in the age of online shopping, particularly focusing on Amazon and its impact on small businesses. It highlights the rise in fraudulent returns, the financial burden on sellers, and the environmental consequences of discarded merchandise. The video also examines potential solutions, including strategies for responsible reselling, and Amazon's efforts to reduce waste through programs like "Grade and Resell" and donations.

• Rise in fraudulent returns and wardrobing.
• Financial burden of returns on small businesses, including increased prices and new fees.
• Environmental impact of returns, with millions of tons of carbon emissions and billions of pounds of waste ending up in landfills.
• Amazon's initiatives to address returns, such as new return options for sellers and programs for reselling and donating returned items.

Introduction

Good Buy Gear is a company that specializes in inspecting and reselling returned baby gear, aiming to give these items a second life instead of them ending up in landfills. The company's facility in Pennsylvania processes a large volume of returns, with plans to handle 200,000 items this year. The video highlights the challenges faced by online retailers, particularly those selling on Amazon, due to high return rates and fraudulent activities.

Rising costs, rising prices

Returns have become a significant expense for retailers, especially with the rise of online shopping. The cost of return shipping often exceeds the product's value. Sellers on Amazon experience higher return rates compared to other platforms like eBay and Walmart. To mitigate these costs, many sellers are increasing prices, with some retailers also charging customers for returns. Amazon has introduced new returns fees for sellers, further impacting their margins. However, there's evidence that these changes may be leading to a decrease in overall return rates.

Customers who cheat

Amazon has implemented tools to combat returns fraud, such as allowing multiple appeals and requiring photo evidence. Some sellers, like Jelliff, have invested in camera systems to monitor outgoing and incoming items, helping to deter fraudulent returns. Amazon has also introduced options for sellers to customize returns, such as choosing not to have returns resold or automatically telling customers to keep the item. Despite these efforts, some sellers feel that Amazon should do more to hold fraudulent customers accountable, as fraud and return abuse significantly impact their net profit.

Reselling responsibly

The story of Lisa Myers, inventor of Ceres Chill, illustrates the potential dangers of reselling used baby items without proper inspection. After a customer received a returned cooler with someone else's rotten breast milk inside, Myers stopped using Fulfillment by Amazon (FBA) and started outsourcing returns to GoodBuy Gear. GoodBuy Gear specializes in inspecting baby gear, ensuring safety and quality before resale. The company's resource-intensive process involves multiple employees and detailed inspections, leading to significant growth in new sellers signing up.

Zero product disposal?

Most Amazon sellers rely on FBA, which may not provide the same level of customization and quality control as specialized services like GoodBuy Gear. Amazon has faced criticism for destroying millions of pounds of unused products. While Amazon states it is "working towards a goal of zero product disposal," it has not provided a timeline. Amazon offers programs like "Grade and Resell" and "FBA Liquidation" to give returns a second life. The company also has an FBA Donations program, partnering with nonprofits to donate eligible items. Despite these efforts, some items still undergo energy recovery (incineration) due to legal, hygienic, or product damage reasons. Amazon encourages shoppers to purchase used or refurbished items through platforms like Amazon Resale, Amazon Renewed, and Amazon Outlet.