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Dropship return policies

by crediblezephyre
4 replies
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I'm looking into creating a return policy for a dropshipping business. Now, i've never made a dropshipping business so I'm looking for some wisdom from experienced folks.

I'm doing dropshipping mostly because I don't have a lot of starting capital. With most of my research and calculations, I can start a site for around $200 upfront and under $100 ongoing monthly. The only seriously risky business that concerns me is returns.

I can't really afford any so I'd like to reduce the risk as much as possible. I understand that not having one is probably a really bad idea. I've read that it's best to see what your suppliers policies are and base yours off of theirs (I haven't contacted suppliers yet so I don't know what their policies are).

Does anyone have experience or any wisdom to share? How frequently do people return products? What have you done that worked best? (aka is there anything anyone can suggest or tell me that will make me feel better about the risk? )
#dropship #policies #return
  • Profile picture of the author chuff1026
    thats a loaded question
    the return policy should be based on your supplier
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  • Profile picture of the author violet0176
    *Only accept returns on damaged or defective items.

    *If you do accept returns charge a 20% "restocking fee" which will usually deter most would be returners.

    Why would it cost you $200 to start a website? BigCommerce and Shopify offer the first 2 weeks free and reasonably low monthly rates.
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    • Profile picture of the author PIGGY BANK NINJA
      The initial question to ask is whether returns are sent to the manufacturer or to you. If returns can be sent to the manufacturer then it is their policy you need to evaluate. If returns are sent to you, and you cannot afford any risk from returns, then either have a no return policy or make it onerous to discourage returns.
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      • Profile picture of the author Importexport
        In my thread Is Dropshipping the Best Low Budget Business Model? I quoted from a post by another warrior, who wrote: "Customer returns. By far the biggest issue when dropshipping. Remember, Dropshippers DO NOT accept returns on items unless the item is faulty (some may accept item exchanges, though I have never come across one that accepts a return just because the end consumer changes his/her mind). When you buy from a Dropshipper it is classed as a Business to Business transaction (B2B), and the consumer protection laws do not apply in B2B transactions."

        This warrior did not elaborate, but I think it is important to appreciate that your customers are protected by consumer protection laws and they are also protected by sites such as Amazon and eBay.

        The result is that if they change their mind and return the goods with an excuse you will lose your argument if you refuse a refund.

        Consequently, depending on what product type you are selling you might need to have sufficient funds to cover inventory, because if customers change their minds, maybe due to a model upgrade just released, you have to refund and suddenly finance those refunds. You might suddenly find that dropshipping is not such a low budget business model after all.

        See my thread linked above for a viable alternative.

        "If you think education is expensive - consider the cost of ignorance."
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