80% return rate! Shipping insurance is killing merchants

Paidai said

2024-06-21 14:28Published in Guangdong science and technology field creators

Author | shore

Edit | Lin Xia

This year's 618 promotion has just come to an end, and the call for reform of e-commerce platforms has become higher and higher.

After #某电商女装商家吐槽退货率高达80%# appeared on the hot search, freight insurance has once again become the focus of the public.

On June 13, Fang Jianhua, the founder of women's clothing brand Inman, published an article entitled "Calling on Relevant Departments to Intervene in the Crackdown on "Compulsory Freight Insurance" on his personal public account.

Subsequently, merchants began to debate topics such as #whether e-commerce platforms should enforce freight insurance# and #运费险成了服装品牌的电商之痛#.

In fact, as early as the start of the 618 promotion, there were many merchants who expressed their concerns about compulsory freight insurance. At present, on the one hand, there are merchants who are tormented by freight insurance, and on the other hand, consumers who angrily denounce the "wrong version", what kind of development will the freight insurance mechanism go in the future?

|Inman founder calls for cracking down on "compulsory freight insurance"

As Fang Jianhua mentioned, the original intention of return freight insurance is to alleviate the freight disputes caused by returns and exchanges in the process of online shopping, and improve the shopping experience of consumers, which is a good thing in itself. However, with the intensification of competition, in order to attract consumers, the platform has gradually turned return freight insurance into a mandatory requirement, which has greatly increased the operating pressure of merchants.

Fang Jianhua also listed the "three sins" of compulsory freight insurance.

First of all, the forced freight insurance pushes up the return rate, resulting in a large number of invalid orders, and merchants have to suffer. Fang Jianhua calculated such an account: "A return order in the garment industry will cost about 15 yuan in the absence of income, which is equal to the advertising fee of the merchant, and the investment in packaging materials and express delivery fees will be directly lost." If the sales volume is 10 million yuan, the customer order is 200 yuan, and 40% of the returns are conservatively calculated, the loss cost is as high as more than 300,000 yuan, and the associated costs are lost more than one million per month. ”

Secondly, the mandatory freight insurance allows users to exploit loopholes and make improper profits. Fang Jianhua mentioned that on Weibo Xiaohongshu, you can search for a lot of strategies for "freight insurance wool". By placing an order and then returning the goods, the user takes advantage of the loophole of the freight insurance to earn the difference between the return courier fee and the freight insurance compensation. According to him, some peers shared that some people rented warehouses to start the business of "freight insurance wool".

Finally, Fang Jianhua believes that a large number of returns cause a large amount of waste of packaging materials, disrupt production plans, and generate ineffective costs, resulting in an increase in ineffective investment by merchants and occupying resources in product research and development. "When the return rate reaches 50%, one transaction user needs to bear the return cost of another return user; When the return rate reaches 70%, one transaction user needs to bear the return cost of two return users, and a vicious circle of bad money driving out good money has been formed in the long run, and it is increasingly difficult for consumers to buy good products. ”

Many businessmen believe that Fang Jianhua expressed their current situation and voice. Under this article, a merchant said, "Freight insurance is a means to increase the platform's own benefits under the guise of improving the buyer's after-sales service experience." The increment of each platform is gone, so promotion, various insurances, and even fines have become new sources of revenue for major platforms. ”

Consumers, however, have a different view. From some high-praise comments on social platforms, we can see consumers' attitude towards "high return rate": "The version and color I made myself are like Si, and I blame others for returning them, who wants to waste time and money"; "The difference between the picture and the real thing is too great, and the fabric is really not flattering"; "First check the quality and material of your product, then whether the promotion is exaggerated or exaggerated, and finally determine the authenticity of the product. If you do this, I don't think there will be so many returns. ”

|“ "Compulsory freight insurance" has become the standard configuration of the event, and the return rate continues to rise

Starting in 2021, various e-commerce platforms began to launch freight insurance. Shipping insurance (seller's version) refers to a service in which the insurance company provides insurance for the one-way shipping cost incurred due to the return when the buyer and seller have a return request. The original intention was to improve the shopping experience of consumers.

According to the merchants, from 2022 onwards, the big promotion activities will begin to be mandatory to bind freight insurance. By 2024, compulsory freight insurance has become the standard for major platforms to require brands to participate in activities.

With the popularity of freight insurance, the return rate of e-commerce has also begun to remain high.

Some time ago, #某电商女装商家吐槽退货率高达80% #登上微博热搜. Some netizens broke the news that their friends sold women's clothing on an e-commerce platform, and during the 618 promotion, they created about 10 million yuan in sales in only 10 days, but only the refund amount was 3.5 million yuan, the return refund reached 3.8 million yuan, and the remaining 2.7 million yuan was still unknown.

The netizen said that his friend thought that the overall return rate could be controlled below 50%, but he did not expect it to soar to 80% in the end. Even if the tail goods can be sold out at a low price, it is estimated that there will be a loss of five or six hundred thousand.

"High return rate" has almost become the status quo of women's clothing e-commerce. In the exchange group of Paidai merchants, some merchants said that the return rate of their women's clothing seven or eight years ago had reached 30-40%. Now the return rate of women's clothing is less than 50%, so you have to "burn incense and worship Buddha".

But in fact, the return rate is not only increasing on the women's track.

In the Paidai merchant group, some women's bag merchants posted the return rate and refund-only data of their stores. Among them, the return rate in May was 68.65%, and the return rate in April was 68.15%.

The merchants who do men's business have not been able to "escape". A merchant who has shifted from selling women's clothing to selling furniture bluntly said that the return rate has been rising this year, and it has reached the life and death line of 50% of "basically no profit". Merchants who make medical device products also said that the return rate has soared from 2%-5% in the past to more than 30% this year.

Before the start of this year's 618 promotion, Pai Dai had interviewed and exchanged with many merchants, and the overall feedback was that the merchants were not highly motivated to participate in this 618. One of the main reasons for this is the concern about the impact of mandatory freight insurance on profits.

Sky Sky, a Taobao merchant who operates children's footwear, said, "The full reduction and freight insurance are too powerful, the lowest price of 83% off, plus freight insurance, few categories can bear it." ”

Many merchants bluntly said, "The main thing is that I am afraid of freight insurance, and I have to open freight insurance for a month, and I am afraid to think about it", "I can't afford to return the goods".

|“ Where is the "unreasonable" freight insurance going?

Why is freight insurance so strongly opposed by merchants? The root cause of this is that forced shipping insurance leads to extremely high return rates.

There are at least two reasons behind the extremely high return rate. The first is that the "wrong version" mentioned by consumers or other places that affect the consumer experience, and the second is that the freight insurance itself is indeed unreasonable, which makes it easy to drill loopholes and pick wool.

From the perspective of consumers, the reason for the high return rate is that consumers are dissatisfied with the quality of the goods, such as the wrong version of the goods, poor product quality, etc. "With such a high rate of clothing returns, it is recommended that merchants consider their own reasons." Some consumers said it bluntly.

In this regard, some merchants pointed out that the return rate has risen, and the cost of merchants has increased, which can only compress the cost of products, resulting in a decline in product quality.

"The return rate of clothing is already high, and I try more than a dozen pieces offline to buy one. At this time, it is necessary to test the store, the goods should be on the right version, the introduction should be as detailed and comprehensive as possible, the try-on data should be sufficient, or the customer service is professional, such as specializing in clothing. A netizen suggested.

In addition to the high return rate due to the quality of the goods, the operating mechanism of freight insurance may be unreasonable.

A lawyer mentioned that freight insurance should not be a mandatory requirement for the platform. Platforms should optimize the rules and give merchants the right to choose whether to take out freight insurance.

Some lawyers also believe that there are loopholes in the rules of the current freight insurance mechanism, and consumers are taking advantage of the loopholes to "pick wool", which essentially violates the principle of maximum good faith in the insurance law and is a fraud.

In this regard, the advice given by the above-mentioned people is that insurance companies should improve the underwriting and claims rules, and should crack down on insurance fraud. For example, the premium is adjusted according to the actual frequency and cost of returns, reducing the abuse of fixed premiums; To strengthen risk control, insurance companies can cooperate with e-commerce platforms to use big data analysis to identify abnormal return behaviors and take restrictive measures against high-risk users (consumers).

As the market enters the stock competition, platforms have begun to use methods such as "refund only" and "mandatory freight insurance" to improve user experience and retain consumers. In essence, the platform improves the consumer experience, which is also a good thing for the merchants within the platform. The problem is that platforms need to strike a balance between satisfying the interests of consumers and maintaining the interests of merchants, so as to avoid basing the gains of one party on the loss of the interests of the other.

For merchants, the market competition is cruel, and the best way is to continue to cultivate internal skills, keep yourself competitive, and better adapt to the current competitive environment.

In the future, it is still unknown whether the mandatory freight insurance will be canceled by e-commerce platforms. All businesses can do at present is to find a balance and survival space between satisfying the consumer experience and making a profit from the business as much as possible.

View original image 22K

• 

• 

• 

• 

• 

• 

• 

• 

•