Transcripts
Welcome back to Unboxing Logistics, everyone.
Speaker:I'm your host, Lori Boyer from Easy Post and woo.
Speaker:2025 has been quite the year so far, and it is continuing to roll on.
Speaker:We have had so many great guests already this year and so many
Speaker:important topics to talk about.
Speaker:Let's just continue on with that wave.
Speaker:Today we are gonna be talking about one of our favorite topics.
Speaker:Least favorite as well.
Speaker:But we are gonna be talking about returns.
Speaker:I think this is really important.
Speaker:It's a topic that we need to return to very frequently.
Speaker:And I have brought on Virgil from WeSupply.
Speaker:He, I'll let him introduce himself, but he is an expert on the returns industry.
Speaker:Virgil, tell us who you are.
Speaker:Hello everybody.
Speaker:My name is Virgil Ghic and I'm the co-founder of WeSupply Labs.
Speaker:And WeSupply is basically post-purchase experience platform.
Speaker:We specialize in the order tracking as well as the return
Speaker:side, but not limited to that.
Speaker:Specifically for the enterprise sector.
Speaker:We're working mostly with bigger retailers, and we help them from like
Speaker:split shipments, very unique use cases around that to, all the way to warranty,
Speaker:store pickups, curbside pickup, and BigQuery, big data analysis around that.
Speaker:So that's our specialty.
Speaker:I love it.
Speaker:We have so many questions on returns.
Speaker:But today we're specifically gonna be talking about how, you know, a lot of
Speaker:times we talk about the loss kind of of money when it comes to returns, and today
Speaker:we're gonna be really diving into actually how you can kind of flip that on that on
Speaker:its head and make returns part of your growth and, and part of your strategy.
Speaker:So it's, it's a piece that we can't get away from, but because we can't get
Speaker:away from it, it's a great opportunity for us to be able to use it as a
Speaker:way to get ahead of the competition.
Speaker:So.
Speaker:Absolutely.
Speaker:Virgil and I are gonna dive into all of that today.
Speaker:But first, a little get to know Virgil, a little behind the scenes Virgil.
Speaker:An interesting thing we've been doing is our Reality Check AI.
Speaker:What I've done is I've asked ChatGPT question about return.
Speaker:And I'm going to tell you what it says, and I just want your
Speaker:professional opinion on how it did.
Speaker:If it was off, it was spot on.
Speaker:And then I ask for a grade A to F on how well AI is, is
Speaker:knowing about our industry.
Speaker:So.
Speaker:We went into returns.
Speaker:I asked ChatGPT specifically about returns in 2025.
Speaker:Specifically what it thought would be the biggest trends
Speaker:when it came to returns in 2025.
Speaker:Biggest issues that we can see, and this is what it said.
Speaker:Okay, I'm gonna pull it up.
Speaker:Okay.
Speaker:I'm curious.
Speaker:Okay.
Speaker:I know it's always fun.
Speaker:Number one, it said that we will see an increase in the
Speaker:number of returns this year.
Speaker:That return rates are rising up to 30% even.
Speaker:It gave me an estimate.
Speaker:And that we should estimate that return rates in 2025 are gonna be higher
Speaker:than we've experienced in the past.
Speaker:Number two, it gave us three, so we're gonna go to that.
Speaker:Two, it said that we will continue to see retailers and ecommerce are gonna
Speaker:continue to see the use of technology and AI in optimizing their returns.
Speaker:Number three, and this is the one where I'm a little questionable
Speaker:that we will continue to see a growth and a movement towards
Speaker:sustainability when it comes to returns.
Speaker:Okay, so first impressions.
Speaker:What did it get right?
Speaker:I think they're all right, but they are quite basic I would say.
Speaker:Exactly.
Speaker:It's like, it's like the vanilla up there.
Speaker:Pretty easy.
Speaker:You can't go wrong with those answers, kind of thing.
Speaker:Okay.
Speaker:So Virgil, we gotta give our AI a grade on how they did in
Speaker:their answer about returns.
Speaker:Hmm.
Speaker:So it was a little vanilla but accurate.
Speaker:So A to F. What kind of grade would you give it?
Speaker:Hmm.
Speaker:To this particular answer?
Speaker:Yeah, for it answer.
Speaker:It's a C.
Speaker:Just that answer.
Speaker:This is just a C.
Speaker:Anything you feel like underneath that it might have missed?
Speaker:I think it's more complicated than that.
Speaker:You know, and if we think about why, let's, let's ask why, first of all.
Speaker:You know, why do we think, you know, returns are gonna increase?
Speaker:And, you know, there are many reasons.
Speaker:But probably one of them is, you know, looking at, you know, the
Speaker:current state of economy, you know?
Speaker:It's not the past, so people.
Speaker:Yeah, right.
Speaker:You know, in the past they used to purchase something.
Speaker:You don't like it, you put it in a corner and you forget about it.
Speaker:It happened to me, and it happened to probably everybody.
Speaker:Now people see, you know, a little bit different economic,
Speaker:you know, circumstances.
Speaker:So we see layoffs happening.
Speaker:We see, you know, interest rates are still, you know, crazy high.
Speaker:They're not coming down.
Speaker:So people are looking after their, their money, you know, more than they used
Speaker:to in the past, more than, you know, during the, let's call the pandemic
Speaker:era, where, you know, it was splurge of like, you know, nothing was optimized
Speaker:and then everybody was making a killing.
Speaker:And you know, those are the little things why I think, you know, people, brands
Speaker:are gonna see more, you know, returns.
Speaker:You know what's so interesting is I'm kind of that person who's guilty of
Speaker:having, you know, bought something.
Speaker:I have some curtains I bought a few years ago.
Speaker:I never got around to sending 'em back, even though I ordered new ones.
Speaker:But just today, literally this week, I bought my son new shoes.
Speaker:They were a little bit tight and I thought, oh, he's gonna grow out of these.
Speaker:I made an appointment on my, my calendar today.
Speaker:I've got to return these.
Speaker:I cannot let these sit around because they were like $40 and
Speaker:it is exactly what you're saying.
Speaker:You know, we're all a little bit more conscious of every dollar kind of matters.
Speaker:Yeah.
Speaker:And I think that that's gonna be a big deal.
Speaker:And it's the same for companies.
Speaker:So I'm glad we're gonna jump into this topic because we're in an economy right
Speaker:now, it's kind of this sort of unsettled situation where every dollar matters.
Speaker:And I think that we're gonna dive into that one.
Speaker:One more thing that I want to talk about.
Speaker:Sure.
Speaker:Who is somebody that you just really admire?
Speaker:I've been taking the time to kind of get to know and, and learn about mentors and,
Speaker:and just people who are good examples in the industry and outside of the industry.
Speaker:And I would just love to hear from you, Virgil, who is somebody that you really
Speaker:admire and why do you admire them?
Speaker:Great question.
Speaker:So I have two mentors that I work closely, you know, for the
Speaker:past five years at this point.
Speaker:Six.
Speaker:One of them is called Dan Martell.
Speaker:He's the founder of SaaS Academy.
Speaker:I was one of their earliest, you know, cohort and, you know, still there.
Speaker:So you know, I think I learned a lot there around, you know, like
Speaker:growing your business and everything.
Speaker:What I really like about him is you know, he's always emphasizing
Speaker:on having a clear vision.
Speaker:If you know exactly where you wanna end up, you're gonna get there much faster.
Speaker:It's like going on a road trip without a map, you know, without a clear destination
Speaker:versus having a clear destination.
Speaker:And when you know exactly where you want to arrive, when the team knows
Speaker:exactly where we, they need to arrive and what's the destination looking
Speaker:like and how it will feel, and what the company's gonna look like and what
Speaker:kind of customers we're gonna have, and It's very clear for everybody
Speaker:and not just for the management team.
Speaker:You know, who should know it.
Speaker:And it's not about, you know, like the big things in the lunchroom area,
Speaker:you know, the mission statement.
Speaker:That's nonsense.
Speaker:You know, when I talk about, you know, like anybody in the company,
Speaker:you know, like, who are we?
Speaker:And they can answer it and it matches, you know, like what the founder's vision is.
Speaker:You know, and that is communicated throughout.
Speaker:I think the brands, the companies, you know, will get there much faster.
Speaker:And I really like that, you know, that I learned from him.
Speaker:And focusing on that, knowing exactly where we want to get, you
Speaker:know, makes us get there much faster.
Speaker:I love that.
Speaker:That is a huge point for all of us out there.
Speaker:Everyone who's listening and hearing our, our Unboxing Logistics family,
Speaker:do you know what your end goal is?
Speaker:Don't get so tied down in the day to day.
Speaker:I think vision and, and visibility and understanding is a massive pain point for
Speaker:so many of us across the board when it comes to our businesses, when it comes
Speaker:to shipping, when it comes to everything.
Speaker:Having that vision is so critical.
Speaker:I love that Virgil.
Speaker:Yeah, I have another one too.
Speaker:Oh yeah, let's do another one.
Speaker:Yeah, because I had two mentors, you know, in the past few years.
Speaker:And the other one was Tony Robbins.
Speaker:So we've been working, you know, I'm part of like the Tony Robbins
Speaker:ecosystem, let's call it that way.
Speaker:You know, for past like three years, I think at this point, two,
Speaker:three years, something like that.
Speaker:And that, that's been really, really great.
Speaker:And what I really liked there, what I learned from there, that was like, life
Speaker:changing, let's call it that way, is, you know, overcoming the limiting beliefs
Speaker:that you have as you know, as a founder, as you know, a company, et cetera.
Speaker:And, you know, one of our thing was at the beginning when we started WeSupply,
Speaker:was like, okay, let's make customer support, customer experience better.
Speaker:Because I used to work in retail and after every weekend we had
Speaker:like 5,000 square 5,000 support messages, like, hey, where's my order?
Speaker:I haven't received the product.
Speaker:Then customers were filing for, you know, chargebacks, you know, it was horrible.
Speaker:You know, this was whatever, like almost 10 years ago.
Speaker:And, you know, that was the first mission, you know, like make customer
Speaker:service, you know, effortless.
Speaker:That actually there's a book about it.
Speaker:It's called The Effortless Experience which is I think, like phenomenal.
Speaker:But then it changed a bit and it changed into, how can we make
Speaker:shipping and returns profitable?
Speaker:Right.
Speaker:So that's like, it sounds like an oxymoron, you know, like, okay, it cannot
Speaker:be profitable because it's a cost center, just like support is a cost center.
Speaker:Well, it doesn't have to be support, customer support, customer success can
Speaker:be a revenue generator if the customers have, if the support team has time,
Speaker:you know, to talk with the customer to upsell, to help them, to guide them,
Speaker:to overcome challenging situations.
Speaker:Maybe the product is supposed to arrive before Christmas or before
Speaker:the birthday party and it doesn't arrive and it will not arrive.
Speaker:What are you gonna do then?
Speaker:You know?
Speaker:And by working really closely, you know, you can change that.
Speaker:And I think the same thing applies, you know, in shipping as well as in returns.
Speaker:If we are just offering, you know, 30 day return policy, no questions asked.
Speaker:No nothing.
Speaker:The chances of making it profitable is none.
Speaker:Most likely you're just gonna lose a lot of money.
Speaker:Right?
Speaker:But if you are designing the experience, if you are designing the outcomes,
Speaker:you're designing the logistics behind the scenes, and you're spending time
Speaker:of like, how can we optimize this?
Speaker:And constantly and overcoming that belief that like shipping and returns
Speaker:must cost us money into how can we make money off of shipping and off of returns,
Speaker:over time you're gonna find the ways.
Speaker:And going with that, challenging the status quo basically.
Speaker:But what are the limiting beliefs of growing the business?
Speaker:And you know, today the brands will say like, oh, shipping is killing me.
Speaker:Returns are through the roof.
Speaker:We're losing so much money.
Speaker:Tariffs went up, right?
Speaker:Like, oh, we can't even get the products back.
Speaker:Well, if you think that way, that's a limiting belief.
Speaker:And you know, you're not gonna grow.
Speaker:But if you're think changing your mindset around it, you're
Speaker:gonna start understanding how can I optimize each little piece
Speaker:in my business to overcome that?
Speaker:And you know, I'm happy to have this conversation with you because
Speaker:there are like so many ways of how you can do it, you know.
Speaker:I love the whole concept of the limiting beliefs, of moving past those.
Speaker:I think that's huge for everyone in the audience.
Speaker:And this is a tidbit of background Easter egg knowledge for people
Speaker:who wanna know about Lori Boyer.
Speaker:But I worked for Tony Robbins for a long time doing marketing with him.
Speaker:So we'll get along well.
Speaker:Spent many years with Tony so that's fantastic.
Speaker:Okay.
Speaker:You've gotten me so excited.
Speaker:You have teased a little bit already about the cost center and returns and overcoming
Speaker:that limited belief that returns have to just drain your wallet, and that
Speaker:there's nothing you can do about it.
Speaker:Control's outta your hands.
Speaker:Sorry.
Speaker:That's like my, my junior high age students who, you know,
Speaker:sorry, mom, there's nothing I can do, but that's not how we are.
Speaker:Talk to me a little bit about returns as a cost center.
Speaker:Okay.
Speaker:I, I pulled up some stats.
Speaker:We've got 16% in recent years of retail sales were returned.
Speaker:$800 billion worth.
Speaker:Where are these costs really coming from?
Speaker:Why, why is it so expensive, I guess first, for something to be returned?
Speaker:16% only?
Speaker:That's what this sta- I know.
Speaker:I thought it was closer to 30.
Speaker:What is the number, you know, Virgil?
Speaker:Depends on the industry and vertical.
Speaker:Yeah, absolutely.
Speaker:But fashion, 50.
Speaker:Yeah, fashion is super high.
Speaker:There's a super, let's, let's actually break some of those down.
Speaker:Virgal.
Speaker:What are the industries that can expect to see the highest return rates?
Speaker:Ah, fashion.
Speaker:Fashion, for sure.
Speaker:It doesn't fit.
Speaker:We know we have issues with people ordering, you know, 17 different types
Speaker:and planning to return 16 of 'em.
Speaker:Fashion is a big one.
Speaker:Are there any others that are, are big on returns?
Speaker:Well they're all pretty big these days, honestly, unless it's like
Speaker:something, well, let's, let's just stick to fashion because there, you
Speaker:know, like there's the easiest way.
Speaker:Okay.
Speaker:Like why customers are returning too big, too small.
Speaker:Okay.
Speaker:That's like more than 50%.
Speaker:I actually ran a report, you know, looking at the customer yesterday,
Speaker:and it was like close to 60.
Speaker:Just too big, too small.
Speaker:Okay.
Speaker:So the majority of the reason it was just didn't fit.
Speaker:Yeah, it doesn't fit, but that doesn't tell you anything.
Speaker:Like it's just too big or too small.
Speaker:Like how is it big?
Speaker:You know?
Speaker:Like if we're looking at the dress, is it too big?
Speaker:Like, do you mean too long?
Speaker:Is it too big as like too wide?
Speaker:Is it too big where?
Speaker:Around the top area?
Speaker:The hip area?
Speaker:Or is it just too, like on the bottom area?
Speaker:How is it big?
Speaker:So if we are just asking, you know, the customer too big, too small.
Speaker:That's not actionable.
Speaker:Nobody knows what to do with that data.
Speaker:But if we dig a little bit deeper, right, and it's like the first
Speaker:question is like, okay, it doesn't fit.
Speaker:It's too big.
Speaker:Like how is it big?
Speaker:You know?
Speaker:And we can customize that, you know, per product.
Speaker:Too big is different for jeans, is different for dresses, it's
Speaker:different for T-shirts and is different from man to woman.
Speaker:Okay, so the first mistake I'm hearing you say is that when people
Speaker:get a return, they're not asking enough questions about the why.
Speaker:So for clothing it could be this sizing, you know, where is it
Speaker:to, you know, that kind of stuff.
Speaker:That's absolutely fantastic.
Speaker:Great.
Speaker:What else?
Speaker:And if you tie that data back, right?
Speaker:So now you understand that this is, you know, too wide or too
Speaker:loose or whatever, and you tie that back to the SKU level data, right?
Speaker:So you understand that you know this particular item X like that, and you
Speaker:analyze it and you give it back to the merchandising team or the manufacturing
Speaker:team, they can do adjustments.
Speaker:And they can maybe say it on the website.
Speaker:Okay.
Speaker:This model runs big or runs wide around that area, size it down or,
Speaker:you know, buy, you know, upsell it with, you know, like a belt, you
Speaker:know, around the, the waist area.
Speaker:You know, so you style it differently, so not necessarily all the time, you know,
Speaker:it's like, it's just too big, too small.
Speaker:Sizing is the biggest issue.
Speaker:It's 60%.
Speaker:There's nothing we can do.
Speaker:That's not like that.
Speaker:You, if you have the data, you can look into it, and if you look into
Speaker:it and you analyze it, you can take action on it, you know, and.
Speaker:So, Virgil, what kind of data should we look for?
Speaker:So you're looking at why something was returned, what is there
Speaker:other data that people should be looking for with their returns?
Speaker:Oh, yeah.
Speaker:When do they return?
Speaker:Okay.
Speaker:Right.
Speaker:So for example, why does that matter?
Speaker:Well, let's say it's the beginning of the season, right?
Speaker:Let's say it's the summer season.
Speaker:You know, it's the beginning.
Speaker:If I purchase then something and you know, I have 30 days to return it, and then the
Speaker:last day I generate the return label, and then I take 30 more days to return it.
Speaker:You know, it's the end of the season.
Speaker:So at that point, by the time it's inspected, by the time the product is,
Speaker:you know, back on the shelf, if it's in that condition, in that condition.
Speaker:It's already end of season.
Speaker:You already have to mark it down, even if it's in a perfect scenario.
Speaker:Now, if you buy it like mid-season, there's basically zero chance of reselling
Speaker:that product again, it for full price.
Speaker:So optimizing for how long it takes the product to get back in stock.
Speaker:You know, getting it back on the shelf, inspecting it fast, you know,
Speaker:another data point that you can use, you know, to optimize returns.
Speaker:Okay.
Speaker:So let's talk a little bit about the solution for that.
Speaker:So let's say that you pull your data and you find out that a large
Speaker:percentage of your returns are not really resellable because of of timing
Speaker:are, what are the kind of hints, what do you do to try to address that issue?
Speaker:To get the product back on shelf faster?
Speaker:Yeah.
Speaker:To either get the product back on shelf to just, you know,
Speaker:how do you avoid those costs?
Speaker:We don't have to reinvent the wheel.
Speaker:You know, there are like other bigger stores, but they have
Speaker:like 30 day return policy.
Speaker:But the first 15 days, 14 days, you know, they give you full money, right?
Speaker:And after that, they give you store credit.
Speaker:So now they are just incentivizing you to to, to return it faster.
Speaker:Okay?
Speaker:So incentivize fast returns.
Speaker:Love that.
Speaker:Love, love, love that.
Speaker:After you generate the label, you know, 30 day to return it.
Speaker:Like for the other, the other day I was returning some shoes and there
Speaker:was a check mark on the bottom.
Speaker:You know, it says like, I confirm that I will return the
Speaker:product in the next seven days.
Speaker:I was like, what is this?
Speaker:But it makes sense because they don't want that product to come back in September.
Speaker:You know, they want it back as soon as possible.
Speaker:And even if the customers are not returning it in time, you know.
Speaker:At least majority will see that and will take action or it'll be
Speaker:top of their mind sending them reminders like, Hey, we see that you
Speaker:initiated the return, send it back.
Speaker:You have only three more days to send it back.
Speaker:You know, stuff like that.
Speaker:Do you have recommendations around how long?
Speaker:I, I know we said 30 days and then 30 days to.
Speaker:What are, I guess, kind of some benchmarks that people struggle a
Speaker:little bit with their return policies?
Speaker:Do you have recommendations for that?
Speaker:Yeah.
Speaker:So 30 days is fine, but it, if it's just like simple 30 days and
Speaker:there's no so no strategy behind it, you know, it's not fine.
Speaker:So for example, one of my favorite brands is REI, right?
Speaker:And they used to have a hundred like one year return policy, you know.
Speaker:And I love that, you know, but in their case, you know, maybe it works,
Speaker:you know, maybe it works from margin perspective or the type of products
Speaker:they have, you know so it depends.
Speaker:But the whole point is just have a return policy that's designed
Speaker:to, for, that is optimized.
Speaker:It's not just like a D for 30 day.
Speaker:End of day, we can't do anything.
Speaker:That that will not work.
Speaker:So based on, you know, industry, there are many ways and maybe you cannot
Speaker:optimize on that part, you know, and it is what it is on that side.
Speaker:But there are many other ways where you can optimize.
Speaker:When you receive the product back, let's say I have this T-shirt and
Speaker:it's a brand new T-shirt and it still has the tag on it, right?
Speaker:But it fell on the ground, right?
Speaker:And on the ground I have, let's say a dog or a cat, and now it has dog hair on it.
Speaker:So when it gets back at the warehouse, what do they do with it?
Speaker:They're gonna look at it.
Speaker:They're gonna say like, oh, this product has dog hair on it.
Speaker:If you don't have like a roller to clean it up, you know the product
Speaker:will not be put back in stock as new.
Speaker:It will be as defective.
Speaker:And in order to fix it, all it takes is, you know, maybe
Speaker:with a roller to clean it up.
Speaker:If the tag is missing, maybe they can retag it.
Speaker:So those are the little things where you can optimize.
Speaker:And the cost of the merchandising is like, is the highest as ever.
Speaker:You know, like the inventory that you already have in your warehouse is
Speaker:way more valuable than the inventory that's gonna come in, you know, in a
Speaker:month because of the current situation.
Speaker:You know, it might be tariffs, it might be whatever it is.
Speaker:So what you have, you have to look at how can you repurpose?
Speaker:I loved that.
Speaker:I just gonna pause 'cause I loved how you said the inventory you have in
Speaker:your warehouse is more valuable than the inventory you're gonna have it in a month.
Speaker:And I think sometimes we forget that, and we forget about the importance and
Speaker:so, can we back up just a little bit?
Speaker:You'd mentioned earlier data that they should look at in the re- in the
Speaker:warehouse or, or when it comes to the return in the warehouse, what, what
Speaker:other data should we be looking at there?
Speaker:Yeah, so first of all, I think understanding how much return
Speaker:cost, you know, is very basic stuff that's wrong most of the time.
Speaker:So when most of these reports are coming in, it's like 800 billion is
Speaker:what the value of the products returned.
Speaker:Or the full cost.
Speaker:'Cause we only look at the full cost.
Speaker:Is the marketing cost to acquire that customer?
Speaker:Is the labor cost to ship out the product?
Speaker:Then the time, the opportunity cost, you know, while it's lingering
Speaker:around, then it comes back.
Speaker:Then it's the return cost, then it's the return processing cost.
Speaker:Then there's the customer support cost.
Speaker:They're all these costs.
Speaker:So on a hundred dollars return, does it cost you a hundred bucks?
Speaker:Probably not.
Speaker:It's cost you way more than that.
Speaker:And if the product comes back and it's, you know, defective, it doesn't
Speaker:have a label on it or it just has dog hair on it, that can be cleaned
Speaker:up, you know, and resold as brand new.
Speaker:You know, because it is brand new.
Speaker:It was never worn, it just fell on the ground for a second.
Speaker:If we factor in all the costs, kind of like having a profit and loss,
Speaker:the P and L, you know, in returns, then we really understand and just by
Speaker:understanding the full cost will open up so many opportunities of optimization.
Speaker:I have to say it again.
Speaker:So Virgil, another huge point there.
Speaker:If you have understanding and visibility of every cost point and it,
Speaker:and it sounds like from what you're saying, each business may be slightly
Speaker:different on where they have, you know, different cost points, but.
Speaker:Look at your own unique business.
Speaker:If you understand the cost in every spot, then you should be looking at
Speaker:each one of those spots to optimize.
Speaker:Is that right?
Speaker:That's correct, yeah.
Speaker:Oh yeah.
Speaker:That's brilliant.
Speaker:The time it takes.
Speaker:Yeah.
Speaker:Okay.
Speaker:So.
Speaker:And the opportunity.
Speaker:You know?
Speaker:Yeah.
Speaker:And when you tie it back, so for example, most of the companies are looking like
Speaker:they, they have departments, right?
Speaker:And interdepartment conversations are, I think, the hardest
Speaker:thing in the world to solve.
Speaker:I don't know why, but it is, you know?
Speaker:And everywhere I worked it is like the hardest thing.
Speaker:So you have the marketing team that's acquiring customers, right?
Speaker:And then you have the warehousing team, right, that's processing the returns.
Speaker:If we have a real good understanding which channel is generating the
Speaker:most returns, the most fraud, the most, the slowest customers.
Speaker:Yeah.
Speaker:Maybe TikTok works fine from a cost of acquiring a customer, right?
Speaker:Acquisition cost is really low and it looks phenomenal, but at the end of
Speaker:the day, after the return is done, is it still the best channel or is it, I
Speaker:don't know, a different, Instagram is the best channel or Meta or whatever.
Speaker:Having that understanding brings a lot of clarity.
Speaker:So it could be that the marketing channel you've chosen brings in
Speaker:10,000 customers, but 9,000 of those customers return something.
Speaker:That's, that's super smart.
Speaker:So to look at each of those touch parts connected to each other.
Speaker:Kind of brings me back to what ChatGPT had said earlier that the second,
Speaker:you know, big trend was technology.
Speaker:Obviously it sounds like technology is key to being able to have
Speaker:this visibility for everything.
Speaker:Yeah.
Speaker:And, and dig deep, you know, 'cause it's a different thing, you know,
Speaker:like which region you know, is not aligning with the product?
Speaker:You know, maybe some people from a specific area of the country, you
Speaker:know, are more prone to return those products because this just doesn't fit
Speaker:the climate, you know, in that area.
Speaker:Having that understanding is important.
Speaker:So look at everything.
Speaker:It could be, look at the region that.
Speaker:I guess what you're doing is as you're looking at the data, you're looking for
Speaker:red flags, like, oh, in marketing, this source is getting a lot of returns.
Speaker:Geographically, this area brings a lot of returns.
Speaker:These specific products are being returned frequently.
Speaker:And then everything from in the warehouse, we're having slow
Speaker:turnover of certain products or, or whatever it is, so that you can
Speaker:then hone in on each of those areas.
Speaker:Can we flip it a little bit, Virgil, and talk about the, making it
Speaker:actually kind of profitable for you.
Speaker:This is a part that's a little crazy.
Speaker:I was recently reading an article by MIT Sloan and they were talking
Speaker:about a business that had actually changed all of the way they did their
Speaker:returns and, and actually ended up with making an additional profit.
Speaker:I think it was like $22 million of profit just because they switched up returns.
Speaker:And I think that's just mind blowing to even think of returns as a profit center.
Speaker:What, what does that really mean for you?
Speaker:How, how do you turn returns into kind of a revenue driver?
Speaker:Great question.
Speaker:Let me give you an example how you can turn shipping
Speaker:into a revenue center, right?
Speaker:So that, that's like a clear example, right?
Speaker:So we have this we have a pretty big customer and they have, you know, stores,
Speaker:it's a retail, right retail chain.
Speaker:And they have a lot of stores, and they have same day delivery.
Speaker:Right.
Speaker:So they have ship it home, you know, free shipping, same day
Speaker:delivery, no, same store delivery, you know, it call, it's free.
Speaker:And then they have a premium version, two hours, same day delivery.
Speaker:The day they announced it and the day they implemented it, more than 40% of all their
Speaker:orders chose same day two day, two hour.
Speaker:Instead of losing money, you know, free shipping because when you
Speaker:have like long time, you know, you have a lot of costs there.
Speaker:You know, you have customer support costs.
Speaker:Customers are unhappy.
Speaker:Where's my order?
Speaker:When do I get it?
Speaker:Then you might have damaged items, you have packaging,
Speaker:you know, all kind of stuff.
Speaker:When it's fast, you're eliminating a chunk of those, right.
Speaker:Now the customers are paying premium, you know, like 11, $12,
Speaker:you know, for same day delivery.
Speaker:Super fast.
Speaker:They get it faster.
Speaker:Customer support drops, you know, there's no need for packaging
Speaker:for big boxes because you're just delivering from a store, you know,
Speaker:to, to the customer's location.
Speaker:You are optimizing.
Speaker:Now, not everybody has retail locations, but that's just one
Speaker:little example of like, same day delivery costs us so much money.
Speaker:Yes.
Speaker:But if you're playing around with it, you know, and you offer a premium service
Speaker:instead of paying, you know, for free shipping, you're making money and they're
Speaker:actually making 2 $3 per each shipment.
Speaker:And I love that because I love how you mentioned the customer support and the
Speaker:customer service because again, it's keeping an eye on all the costs, and
Speaker:not just thinking about, oh, this was the shipping cost, but the customer
Speaker:support costs went down as well.
Speaker:And I would have to think, returns have the potential for really
Speaker:boosting that kind of customer lifetime value I that process.
Speaker:If it's bad for me, I don't really wanna shop with people again.
Speaker:So how does that play into it?
Speaker:So there you have a customer, they purchase something and
Speaker:now they want to return it.
Speaker:The easiest thing is, you know, like, yeah, here's the money, but oftentimes
Speaker:the customer doesn't want the money back.
Speaker:They just want, you know, a different size or they want,
Speaker:you know, a different product.
Speaker:Maybe this product is a little bit, you know, just doesn't fit.
Speaker:They need more features or they need, this is an overkill.
Speaker:Like the other day, I purchased something around the house and
Speaker:the product was phenomenal.
Speaker:It was just this big.
Speaker:I needed a product that was this big because it doesn't fit, you know?
Speaker:It's not, 'cause I didn't like the product, it was just too big.
Speaker:So I purchased a smaller version and guess what?
Speaker:The smaller version, of course is more expensive 'cause it's more,
Speaker:you know, high end, you know, like it's like the turbo, mini whatever.
Speaker:And that one was more expensive.
Speaker:So now, yes, I tried out, you know, I did an exchange.
Speaker:So I did not give, the company did not give me the money back
Speaker:to go and shop somewhere else.
Speaker:They converted me from the one product to a more expensive one.
Speaker:And when we think about exchanges, it's like you have multiple exchanges.
Speaker:You have even exchanges.
Speaker:You know, a hundred bucks for a hundred bucks, that's great.
Speaker:You're not losing the customer.
Speaker:Then you have a hundred dollars for $120, right?
Speaker:Then you're making $20 and you can incentivize this.
Speaker:You can give additional like 10% or additional $10 to do an exchange
Speaker:or convert it into a store credit.
Speaker:One of my favorite is you have a hundred dollar item that you are
Speaker:exchanging for an $80 product item.
Speaker:$20. Yes, you can offer it as a refund, right?
Speaker:But you can also offer, you know, maybe $25 as store credit.
Speaker:And store credit is a new incentive to come back and purchase again, right?
Speaker:Those are like little things.
Speaker:But $25 is quite significant.
Speaker:You know, like you can actually purchase something with that money, you know?
Speaker:And now you're incentivizing the customer to take store credit over cash.
Speaker:So they're coming for a store credit and then it's less than,
Speaker:you know, you pay for marketing.
Speaker:Yeah.
Speaker:I had a friend who was considering doing something else, tell me what you think
Speaker:about this, with their returns policy.
Speaker:He was thinking about when somebody exchanges then offering like, hey, as
Speaker:part of your trouble you could have 20% off of any additional purchases.
Speaker:So it just kind of that encouraging them to buy more, but also seeming like,
Speaker:oh, so sorry for your inconvenience.
Speaker:But in an effort just to boost more sales and I, I, it really does.
Speaker:It seems like there's a lot of creative ways that you could
Speaker:encourage more during this process.
Speaker:Yeah, especially if you have physical locations.
Speaker:So most of the brands we work with are retailers, right?
Speaker:Like they have web presence, but also stores.
Speaker:And if you're returning something to the store, if you're returning something.
Speaker:You want to incentivize returning to store, okay.
Speaker:That's like work, being in Vegas, right?
Speaker:You don't walk into a casino and not spend your money.
Speaker:It's impossible.
Speaker:So that's basically how it happens.
Speaker:You know, you incentivize people, you know, or like invite them,
Speaker:you know, and sometimes you don't have to give them more money back.
Speaker:It's just faster return, faster cash back, you know,
Speaker:effortless experience, et cetera.
Speaker:And how can you create that environment?
Speaker:Well, very simple.
Speaker:They come to the store.
Speaker:The moment they walk into the store, they're not gonna
Speaker:walk out with more money.
Speaker:The, it's not the so true, but it's true.
Speaker:You know, like there's data that proves it.
Speaker:You know that as soon as you walk into the store and you get like a hundred
Speaker:bucks back, you are gonna look around.
Speaker:You're most likely gonna find something.
Speaker:And you know, taking that even further, you know, how do
Speaker:you make that again, cheaper?
Speaker:If you ship it back, it costs you money as a brand, you know, $10, you
Speaker:know, $20, you know, the return cost.
Speaker:But if you have stores, you can have curbside returns.
Speaker:You can, and everybody's busy these days, right?
Speaker:You're picking up the kids from school, they're in the back.
Speaker:You just walk, stop by the store.
Speaker:You open the trunk, you check in, you click the button, they're coming out.
Speaker:They know they have to exchange this product for that, and it's effortless.
Speaker:As soon as you create an effortless experience for the
Speaker:customers, they want to come back.
Speaker:You know, especially, you know, if you're selling products for
Speaker:people who don't really have time.
Speaker:You know, I don't have time to go.
Speaker:You know, like the other day I have this coffee machine and it's broken now, right?
Speaker:It's a really phenomenal coffee machine.
Speaker:I have to return it or, you know, warranty it.
Speaker:The first thing that came to my mind, it's big, right?
Speaker:What kind of box do I find in which I can put this.
Speaker:Right now I have to go to, I don't know, Home Depot, find a box, buy
Speaker:some peanuts or whatever, you know, so the product doesn't get destroyed
Speaker:by the time it gets warrantied.
Speaker:So all that's headache.
Speaker:I don't have time for that.
Speaker:So making it easy, you know, for example, dropping it off at FedEx, you
Speaker:know, and they give you the poly bag.
Speaker:They print out the label for you.
Speaker:It's just easy, you know?
Speaker:And now it's not just true FedEx, you can do it I think at Kohl's, at
Speaker:Walgreens, they're like so many easy.
Speaker:I had to say my daughter, she always returns her Amazon packages to Kohl's.
Speaker:You know, you have the thing where you return to Kohls.
Speaker:They give her $5 Kohl's cash.
Speaker:She spends money every single time.
Speaker:She never spends $5.
Speaker:She's always buying a $20 blanket.
Speaker:So you are so right.
Speaker:And they put the, the, the Kohl's returns, you know, all the way in the back.
Speaker:Yep, exactly.
Speaker:Hey, that is another great point.
Speaker:It's like sometimes getting through the store, seeing all the things.
Speaker:There are so many different ways.
Speaker:I wanna ask, one of the things actually my daughter just had was she just
Speaker:told me today during lunch, she said, oh, I want to return some tights.
Speaker:And they said, just keep it, okay, just keep it.
Speaker:Here's your refund, blah, blah, blah.
Speaker:How do you decide when to just say, keep it at it's more money than it's worth, you
Speaker:know, do you have suggestions around that?
Speaker:Oh yeah.
Speaker:You just need to know your numbers.
Speaker:So honestly, it's that simple.
Speaker:And so for example, if, but rule of thumb, around 25 bucks, $30, below that, it's
Speaker:not worth it to return because it costs you more, it's cost you more the label
Speaker:to return it, the labor to open the box.
Speaker:The product to be inspected.
Speaker:What do you do with that product?
Speaker:If it's not good to be resold, then you have to pay for, you
Speaker:know, like destroying the product.
Speaker:So that might cost you more than just.
Speaker:Keep the product and oftentimes, you know, that product is in perfect condition and
Speaker:you know, they can gift it to somebody.
Speaker:And that's always good.
Speaker:I remember once I purchased some toys for my kid, you know, and
Speaker:for some reason we had to return it and they said, just keep it.
Speaker:I'm like, oh yeah, but my kid cannot use it.
Speaker:Oh, but you know, I have some nieces, you know, so I gave it to my niece,
Speaker:you know, and that was great.
Speaker:So there's always ways, you know, to optimize that.
Speaker:The other thing is, so what happens quite often you have, you know, a
Speaker:contract with UPS, for example, and you know, like you're using that rate,
Speaker:you know, for shipping, you're using that for returns and everything, and
Speaker:you never even explore, you know, like what's what other carriers are offering.
Speaker:You know, they're cheaper version, you know, maybe specific routes are
Speaker:cheaper through FedEx or through USPS or other local carriers, right.
Speaker:And doing rate shopping and not just rate shopping for shipping,
Speaker:but also rate shopping for returns.
Speaker:And especially in returns where you want to optimize every penny.
Speaker:'Cause maybe it's the same thing, 'cause it arrives in two days or three days.
Speaker:It's not that big of a difference.
Speaker:You know, maybe you can optimize there, but if you do the numbers,
Speaker:you know, and you do the calculations at the end, end of the month, at
Speaker:the end of the year or quarter, you might be saving a ton of money.
Speaker:Right.
Speaker:But it's so easy to just say, oh, we just return everything through UPS.
Speaker:You don't have to.
Speaker:I love that.
Speaker:That is exactly one of these kind of outdated mindset.
Speaker:And I love that you've talked about rate shopping, not just for
Speaker:shipping, but for returns as well.
Speaker:These are kind of outdated.
Speaker:Ah, it's easiest.
Speaker:I'll just deal.
Speaker:In today's economy, every single dollar matters.
Speaker:It means that you can ship returned.
Speaker:If you can return things way cheaper with one carrier over another, go and
Speaker:do it because it absolutely makes sense.
Speaker:Okay.
Speaker:Virgil, I am feeling sad,, we're running low on time, so I wanna get from you.
Speaker:If somebody wanted to start today, what is some low hanging fruit?
Speaker:What are like your first steps?
Speaker:If somebody's like, okay, Virgil's right.
Speaker:I'm sure I've got some mistakes here.
Speaker:What, you know, how should, how do you recommend they start today?
Speaker:They can get out and get started on making some changes
Speaker:Around shipping and returns or just returns or just
Speaker:... On returns specifically.
Speaker:On returns specifically.
Speaker:So let's say they're like, okay, I know I'm bleeding a
Speaker:ton of money with my returns.
Speaker:What should I do?
Speaker:How do I just get started without being overwhelmed?
Speaker:Number one question I have usually is like, we have some data, but
Speaker:we don't know what to do with it.
Speaker:That's like one thing, you know?
Speaker:Okay.
Speaker:Because it just says too big, too small.
Speaker:That's not actionable at all.
Speaker:And spending a tiny bit of time, you know, configuring your return policy, your flow
Speaker:when you're returning products, you know, to really understand how is it too big?
Speaker:How is it too small?
Speaker:By product by category, you know?
Speaker:It doesn't take much.
Speaker:It's like a half a day of job.
Speaker:Within a month, you have more than enough data to really understand what's
Speaker:happening there and give it back to the merchandising team to optimize it.
Speaker:That's like number one.
Speaker:Love that.
Speaker:You've got to get the data that you need.
Speaker:Yeah.
Speaker:And, and about a month is what you said you need.
Speaker:So that's, that's fantastic.
Speaker:Great, great.
Speaker:Measurable thing.
Speaker:When you're receiving products, you need to inspect it, right?
Speaker:The inspection process for a T-shirt is very different than an inspection
Speaker:process from a water bottle.
Speaker:There are two completely different products, so you must have a res, an
Speaker:inspection process for this product that's different than this T-shirt,
Speaker:and if there's something wrong with the product, you don't just
Speaker:say like, this is not in brand new condition, so we have to dispose it.
Speaker:You know, you have to ask yourself, what can I do with this product?
Speaker:How can I save this product?
Speaker:Can I resell it on a marketplace?
Speaker:Can I start a resell program of used products?
Speaker:Can I just take a lint remover and remove the dog hair from it?
Speaker:Can I give, you know, like a, a, you know, label, you know, to put
Speaker:the labels back on the product.
Speaker:That's easy stuff.
Speaker:You know, if this product's box is damaged, do I have replacement boxes?
Speaker:But oftentimes in the past at least, and I know some companies who did not took
Speaker:the time to even open the box because it cost them too much to open the box
Speaker:and they were just trashing everything.
Speaker:Well, they are not doing that anymore, that's for sure.
Speaker:Now they're opening every box.
Speaker:They're inspecting every product, product.
Speaker:And if it's a little bit scratched, they're reselling
Speaker:it as scratched, you know?
Speaker:But have, doing that is so easy.
Speaker:Like you can do it tomorrow.
Speaker:You don't need new technology, you don't need anything.
Speaker:You just need an SOP and you need to have the willingness to do it.
Speaker:And if you're working with the 3PL, you know, because they are doing
Speaker:their returns, you know, provide them with software or ask them
Speaker:like, hey, can you fix my products?
Speaker:The product, if the box is damaged, let's put it in a brown box, you know,
Speaker:and still resell it at like 20% discount as open box or you know, damaged
Speaker:box or whatever you want to call it.
Speaker:But don't just discard it.
Speaker:Yeah.
Speaker:That's fantastic.
Speaker:So have a plan and a process kind of for each product or each
Speaker:category, that you're not approaching every return in the same way.
Speaker:Really smart.
Speaker:I love that.
Speaker:Anything else?
Speaker:The policies, you have to look at the policies, of course.
Speaker:You know, like don't just have like a simple 30 day.
Speaker:Design it.
Speaker:Your life is by design.
Speaker:If you design your life, you're gonna have a good life.
Speaker:If life just happens to you, you know, then you're not gonna have a great life.
Speaker:Right?
Speaker:But if you design your life, you're gonna have a great life.
Speaker:So if you design your return policy, you know, with some, you put some neurons in
Speaker:there, you know, then you're gonna have, you know, like a profitable, you know.
Speaker:Even if it's not profitable, but you are gonna decrease the cost significantly.
Speaker:Shop around for, you know, easier, cheaper ways of returning products.
Speaker:You know, like have, you know, rate shopping, it doesn't matter.
Speaker:It's coming back at that point, you know.
Speaker:But the most important, look at how can you decrease the return rate.
Speaker:And oftentimes, it's like the answer is so simple.
Speaker:You know, you might have a super talented graphic, you know, like photo
Speaker:processor who just wants to make the red to pop a little bit more, but
Speaker:that red is not the red that when you receive it and looking back why they are
Speaker:returning, you know, and what can you do?
Speaker:And most of the solutions are on the website, just saying too.
Speaker:It runs a little bit big, runs a little bit small, you know.
Speaker:I just wanna encourage everyone who's listening, start small.
Speaker:You don't have to do everything at once.
Speaker:So start with one of these hints.
Speaker:Get out there and say, I need more data, and now I'm gonna
Speaker:test this, and you can refine it.
Speaker:So obviously, don't just create a return policy and say, okay,
Speaker:I've done just what Virgil said.
Speaker:I've thought about it.
Speaker:Well, maybe in six months you're gonna want to change it
Speaker:based on what you've learned.
Speaker:So don't leave those things as stagnant.
Speaker:Everything needs to continue to grow.
Speaker:Virgil, I want you to tell us a little bit about WeSupply before we
Speaker:go, we're just about out of time.
Speaker:But tell us what, what, what you do at WeSupply.
Speaker:What, what the company is.
Speaker:WeSupply is a post-purchase experience platform.
Speaker:We're doing order tracking, notifications, returns, exchanges, warranties, product
Speaker:claiming, you know, for warranties.
Speaker:And then we have an entire in, in-store suite, you know, like curbside pickup,
Speaker:return to store store notifications, basically everything there.
Speaker:And what's really cool is we're taking all this data so you can already
Speaker:imagine the amount of data that we have.
Speaker:Yes, massive.
Speaker:And all this data, it's available in our system, of course, you know,
Speaker:but we're funneling it to BigQuery.
Speaker:You know, BigQuery being this big data platform, right?
Speaker:Database.
Speaker:From there you can come connect it to your business intelligence platform, to
Speaker:your looker dashboards, to whatever, you know, wherever you want to report it.
Speaker:And you can look into these data points, you know, getting, you
Speaker:know, like very deep into like why customers are returning.
Speaker:Understanding, having the data to back it up and then making changes,
Speaker:understanding which areas cost you much, which little, having the intelligence
Speaker:and then optimizing every part of it.
Speaker:And at the end of the day, you will make returns profitable.
Speaker:And I truly believe that it's, it's doable.
Speaker:Love it so much.
Speaker:Virgil, if people want to.
Speaker:Ask you questions about returns or just connect with you in general?
Speaker:Or if they wanna learn more about WeSupply and, you know,
Speaker:get some access to this data.
Speaker:What, what are the best ways to do so?
Speaker:Well, they can reach out to me.
Speaker:Probably LinkedIn is the best place.
Speaker:LinkedIn is great.
Speaker:I'm not even checking my email these days.
Speaker:It's just spam.
Speaker:So good to know everyone.
Speaker:One hour, you know, or whatever.
Speaker:We took us, you know, to talk, I got like five spam messages.
Speaker:You know, like spam phone calls.
Speaker:So LinkedIn is still the last thing that I'm like checking to some degree.
Speaker:Perfect.
Speaker:Perfect.
Speaker:So connect with Virgil on LinkedIn.
Speaker:Do you have a website for WeSupply?
Speaker:Yeah, it's wesupplylabs.com.
Speaker:Wesupplylabs.com and we'll include that link.
Speaker:So thank you so much, Virgil.
Speaker:I wish we had about 10 more hours.
Speaker:I think we could cover all of it, but it's been fantastic.
Speaker:So many great takeaways from today.
Speaker:Thank you everyone for being here, and we'll see you next time.
Speaker:Thanks, Virgil.
Speaker:Thank you.
Speaker:Bye Bye.
