Is Customer Returns and RTO are Destroying Ecommerce Sellers on Amazon, Flipkart & Meesho? 🚫

Summary

The video addresses the major challenges of India's e-commerce ecosystem, focusing on the problem of returns, including RTO (Return to Origin) and customer returns. It explains how these returns affect both marketplaces and independent e-commerce websites. The speaker emphasizes practical strategies to reduce returns, such as improving packaging, uploading clear product images, and using size charts. While returns are a part of the business, the video suggests ways to minimize losses and handle customer expectations. It concludes with advice on building one's own e-commerce website alongside leveraging marketplaces for marketing and growth.

Takeaways

• 🛒 India's e-commerce ecosystem faces significant challenges with returns, especially for cash-on-delivery (COD) and prepaid orders.
• 🚚 There are two types of returns: RTO (Return to Origin) when the customer refuses the product, and customer returns, where the product is returned after delivery.
• 💡 To mitigate returns, proper packaging and clear communication with customers are essential, especially for fragile or high-value products.
• 📦 RTO returns are not under seller control, as they depend on delivery performance by marketplaces like Amazon and Meesho.
• 📉 Meesho experiences more fake and damaged product returns due to catering to a lower-budget audience.
• 📸 Recording a video of the product during packing can help sellers claim compensation in case of damaged returns.
• 💰 In RTO cases on self-run websites, sellers bear the costs for return shipping and handling, making it a more significant issue compared to marketplaces.
• 🔄 Managing customer expectations by uploading clear product images and accurate size charts can reduce the chances of returns.
• 🚫 If sellers want to avoid returns altogether, they can set up no-return policies for prepaid orders on their own websites, but this may reduce sales.
• 💻 Sellers should use marketplaces for branding and marketing but work towards building their own e-commerce website for long-term growth.

Q & A

What is the biggest problem in India's e-commerce ecosystem according to the speaker?

The biggest problem in India's e-commerce ecosystem is returns, especially with Cash on Delivery (COD) orders and prepaid orders.

What are the two types of returns mentioned in the video?

The two types of returns are RTO (Return to Origin), where the product is not delivered to the customer or the customer refuses to accept it, and customer returns, where the customer accepts the product but later returns it due to dissatisfaction.

What causes RTO returns, and why are they problematic?

RTO returns occur when a product is sent to the customer but is not accepted. It is problematic because the product comes back in the same condition, causing the seller to incur additional shipping and logistics costs.

Why do customer returns happen, and what issues arise from them?

Customer returns happen when the customer is dissatisfied with the product after receiving it. Issues like product damage, incorrect items, or even fraudulent returns can occur, causing loss to the seller.

What are some common problems sellers face with e-commerce marketplaces in India?

Common problems include high return rates, especially on platforms like Meesho that cater to a low-budget audience, where customers frequently return or damage products.

How can sellers prevent or reduce returns according to the speaker?

Sellers can reduce returns by ensuring proper packaging, providing clear product descriptions and images, using size charts for clothing, and documenting the packaging process with videos to avoid fraudulent claims.

What is a practical solution for dealing with RTO and damaged returns?

One practical solution is making a video of the packaging process. This can help with filing safety claims if a product is returned damaged or if a false return claim is made.

What challenges come with running an independent e-commerce website compared to selling on marketplaces?

Running an independent e-commerce site comes with challenges like managing returns (both RTO and customer returns), covering shipping costs, especially with COD orders, and ensuring proper customer communication and product quality.

How do marketplaces handle RTO returns, and how is it different from independent websites?

Marketplaces typically cover the cost of RTO returns, while on independent websites, sellers bear the shipping costs for both delivery and return if the product is not accepted by the customer.

What can sellers do to avoid issues with sizing in apparel e-commerce?

Sellers should provide a clear size chart and ask customers to measure their size before placing an order. This reduces sizing issues and subsequent returns.