Sartoriamo
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- Nov 29, 2010
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Some thoughts: spoilered for those who don't GAF
Fair point, and I understand what you're saying. I wrestle with that same issue from time to time. I believe it starts with the past 20+ years' gradual transition from auctions to BIN, and the different mindset that accompanies it.
When I first started eBay in 1998, it was auctions only, and just as in a real, live auction with an auctioneer, if you won the bid, you owned the item. End of story. Returns weren't even a thing. Auctions generally take two forms: those intended to "get rid of stuff", and those where demand is expected to push prices on sought-after items to stratospheric heights (like Sotheby's), so with eBay, for the most part, we're talking about the former.
I still buy a LOT at live, local auctions, and the business model for that is essentially "buy on the day then wait for the flip". One of the auctions I frequent is a company that will do sales for homeowners who are on a short timeline to closing, but the estate sale companies are booking months out. That company can do an auction with only a day or two notice, and the house is empty by the end of sale day. Prices are generally low, but the tradeoff is the instant "displenishment" of the estate. There's a mindset that accompanies that type of buying, which is that if you're buying it for yourself it's a steal, and if you're buying it to flip, there's margin. This remains the dominant mindset amongst eBay auction buyers. "Let me see how little I can pay for this". Competitive auctions whose yields exceed BIN expectations are vanishingly rare on eBay (in my experience most yield about 50% of realistic BIN, albeit without the wait, and many much less).
And so, eBay has moved gradually from an auction site to a predominantly BIN site, and with it, the habits and expectations of buyers. Back when I started on the 'Bay, there wasn't really anywhere else to shop or sell online, so people were geared up for that set of expectations. But now, when you buy anything online, any time, any where, expectations and habits are different. Which is why I will be the last holdout when it comes to "officially" accepting returns. No, I'm going to keep operating a no-returns policy (for as long as they'll let me), and here's why:
The new breed of buyer operates differently, not least because of the bad habits intentionally instilled by Amazon and others like universal super-fast shipping, free returns and so on. In fact, Amazon went one step further and started an "order now and pay only for what you keep", an egregious and anti-competitive system (funded by the company's massive cash reserves) that not only trains customers to make returns routinely, but to over-order with the expectation of returns. It is as a last stand against these people that I maintain a strict no-return policy (yes, even though I graciously accept almost every return).
The fundamental challenge is that now, even auction buyers feel they can be as capricious and fickle as they like, with the expectation that their lowball bid wins will be treated with the same concierge-level customer service as paying full whack at an LV store. Screw that! You're getting a STEAL, mofo. Take your medicine like a man: sell your **** forward; consign it; put it on OfferUp. Don't expect me to sacrifice my meager margin for you failing to pay attention. I know, that's just fantasy on my part, but it's exactly what I have always done.
So, bottom line: it IS possible to configure your business to take returns. My friend @capnwes has done that quite successfully, by running his eBay business more like a regular retail business, and baking his global cost of returns into his pricing.
But regular retail mail-order businesses have return levels that we'd lose sleep over. My sister built a $100M mail-order business in France and told me her routine return rate was 15%, and much of what was returned was trashed beyond repair. I did try for a time offering returns to try and lower my FVF, but the return rate skyrocketed, presumably because when people see "30-day returns" they quit paying attention before they buy. By maintaining a no-return policy, I still believe (right or wrongly) that I'm heading off some of the worst potential "serial returners", and I will take whatever time is necessary so answer their questions in a bid to minimize returns.
Just my 2¢. Others may disagree . . . and I'll be interested to see what they have to say.
When I first started eBay in 1998, it was auctions only, and just as in a real, live auction with an auctioneer, if you won the bid, you owned the item. End of story. Returns weren't even a thing. Auctions generally take two forms: those intended to "get rid of stuff", and those where demand is expected to push prices on sought-after items to stratospheric heights (like Sotheby's), so with eBay, for the most part, we're talking about the former.
I still buy a LOT at live, local auctions, and the business model for that is essentially "buy on the day then wait for the flip". One of the auctions I frequent is a company that will do sales for homeowners who are on a short timeline to closing, but the estate sale companies are booking months out. That company can do an auction with only a day or two notice, and the house is empty by the end of sale day. Prices are generally low, but the tradeoff is the instant "displenishment" of the estate. There's a mindset that accompanies that type of buying, which is that if you're buying it for yourself it's a steal, and if you're buying it to flip, there's margin. This remains the dominant mindset amongst eBay auction buyers. "Let me see how little I can pay for this". Competitive auctions whose yields exceed BIN expectations are vanishingly rare on eBay (in my experience most yield about 50% of realistic BIN, albeit without the wait, and many much less).
And so, eBay has moved gradually from an auction site to a predominantly BIN site, and with it, the habits and expectations of buyers. Back when I started on the 'Bay, there wasn't really anywhere else to shop or sell online, so people were geared up for that set of expectations. But now, when you buy anything online, any time, any where, expectations and habits are different. Which is why I will be the last holdout when it comes to "officially" accepting returns. No, I'm going to keep operating a no-returns policy (for as long as they'll let me), and here's why:
The new breed of buyer operates differently, not least because of the bad habits intentionally instilled by Amazon and others like universal super-fast shipping, free returns and so on. In fact, Amazon went one step further and started an "order now and pay only for what you keep", an egregious and anti-competitive system (funded by the company's massive cash reserves) that not only trains customers to make returns routinely, but to over-order with the expectation of returns. It is as a last stand against these people that I maintain a strict no-return policy (yes, even though I graciously accept almost every return).
The fundamental challenge is that now, even auction buyers feel they can be as capricious and fickle as they like, with the expectation that their lowball bid wins will be treated with the same concierge-level customer service as paying full whack at an LV store. Screw that! You're getting a STEAL, mofo. Take your medicine like a man: sell your **** forward; consign it; put it on OfferUp. Don't expect me to sacrifice my meager margin for you failing to pay attention. I know, that's just fantasy on my part, but it's exactly what I have always done.
So, bottom line: it IS possible to configure your business to take returns. My friend @capnwes has done that quite successfully, by running his eBay business more like a regular retail business, and baking his global cost of returns into his pricing.
But regular retail mail-order businesses have return levels that we'd lose sleep over. My sister built a $100M mail-order business in France and told me her routine return rate was 15%, and much of what was returned was trashed beyond repair. I did try for a time offering returns to try and lower my FVF, but the return rate skyrocketed, presumably because when people see "30-day returns" they quit paying attention before they buy. By maintaining a no-return policy, I still believe (right or wrongly) that I'm heading off some of the worst potential "serial returners", and I will take whatever time is necessary so answer their questions in a bid to minimize returns.
Just my 2¢. Others may disagree . . . and I'll be interested to see what they have to say.
(so I am out shipping fees and PP fees), so I guess you guys are a bit better off, but my return rate is below 10%.
