Episode 49: How to Handle Drop Shipping Returns

Transcript: Charles:            In this episode of Business of eCommerce, I talk about how to handle fraud shipping returns. This is the Business of eCommerce, episode 49. Charles:            Welcome to the Business of eCommerce, the show that helps eCommerce retailers start, launch and grow their eCommerce business. I'm your host, Charles Palleschi. Charles:            I'm here today to talk a bit about the topic of how to handle returns for drop shipping, for drop shippers, anytime where you're as an eCommerce retailer shipping products where it's not coming directly from your warehouse. It's coming from a third party warehouse. What's the best way to handle those? Charles:            I found an blog [inaudible 00:00:46] actually that given an outline that I wanted to kind of start with, and I kind of go into each topic a little bit, give my own kind of comments on it. I thought it was a good place to start, so I'll also link to that in the show notes, that blog [inaudible 00:00:59] which was great. Charles:            First, two parts. Let's talk about what's going on, what the issue is. So, you're a drop shipper or you work with some manufacturers, that sort of thing, ship directly from their warehouse, however you want to define it. But essentially, when you're shipping product, it's from a third party. They have a return policy. It's not your return policy. What do you do? This is a totally common issue. Lot of folks have this. Charles:            What also makes this a bit more difficult that you have to always think about is you might ship from multiple suppliers, so it's not just one, one warehouse, one supplier, multiple. So, how do you handle that? Charles:            First, let's say two things. First part we'll talk about how to actually get ready for it ahead of time, how to start, and then when it actually happens, how to actually handle the returns themselves. Charles:            So, how to [inaudible 00:01:54]. First, talk to each supplier and learn their policy. Each supplier is gonna have a different policy, right? Where some might allow 90 days, others 60, others 30, some maybe not at all. Some are gonna have a restocking fee. Some of them who pay shipping costs, also that might depend on if the product was defective, if it was the wrong size, damaged, there's a lot of different things. You need to go through each one of their return policies before you even start down this road, just to get an idea of what are you working with here and what are they willing to do for your as your supplier. Charles:            Once you know that, then it's important to understand your return policy. The goal here is you're working with multiple suppliers, let's say. It could be simple. You're working with one. If you're working with one, we'll do the simple case first, you might honestly might just want to copy their return policy. That's the easiest, right? They offer 30 days, you offer 30 days. You know it's in that window, easy, right? If there's a return, can you get the return? It's the supplier's return policy, yes. Very easy answer. Charles:            But what happens when you work with multiple suppliers? The goal here is there's some wiggle room and it really depends on how you want to handle this as a retailer, where you're comfortable, but the goal here is to try to come up with your return to closely merge this and it ends up being kind of the lowest common denominator of all their return policies. For example, if one offers a 90 day window and another one offers a 30, you might only want to offer a 30, right? Cut yours down so that you know any product sold in your stores will be covered under your manufacturer return policy. Charles:            If you want to go over, now you're in the gray area. It's up to you. There might be some manufacturers that offer 15 day or shorter, so once you get below 30 it starts to get a little dicey, so you do want to think about this,