How much money can a women's clothing online store make when its sales are approaching 10 million? The answer is minus 600,000.
This is the real revenue of e-commerce practitioner Zhou Meng in a recent promotional event. According to statistics, only 3.5 million yuan was refunded and 3.8 million yuan was refunded. Zhou Meng bluntly said that the crux of the problem lies in the soaring return rate.
It is generally believed in the industry that the normal return rate of men's clothing on e-commerce platforms is usually no more than 10%, and that of women's clothing is around 20%. At present, the return rate of clothing categories has risen to 40%-50%, and the return rate of some women's live broadcast rooms is even as high as 70%-90%.
Merchants trapped in the "return rate".
"In 11 years in the industry, this year is the year with the highest return rate." Xu Bingfeng, the owner of clothing e-commerce in Junpu Village, Jieyang City, Guangdong Province, told China News Weekly.
Chaoshan people are good at business, casting wide nets and fishing. In Jieyang, where "I'd rather sleep on the floor than be the boss", the e-commerce gene is distinct. As an early local entrepreneur, Xu Bingfeng has operated clothing stores in Taobao, Pinduoduo, Douyin e-commerce and other channels.
According to his observations, there are significant differences in the return rate of different platforms. Shopping-based platforms display product information through search, and consumers often have clear needs, and the return rate is relatively low. In the live broadcast of social entertainment-based platforms, impulse consumption is the majority, and the return rate remains high, and 90% of this data is derived from this kind of women's live broadcast room.
For practitioners like Zhou Meng and Xu Bingfeng, a high return rate means many problems in the business process, which can be said to affect the whole body.
The most immediate impact is a significant increase in costs. Xu Bingfeng said that the returned clothes need to go through the process of disinfection, ironing, resorting and packaging. Taking a piece of clothing priced at 50 yuan as an example, plus the promotion fee, handling fee and freight insurance deducted by the platform, on the premise of not affecting the resale, it has already lost at least 10 yuan before it makes a profit. If the clothes cannot be re-sold, the losses are even more severe.
Inventory management has become similarly tricky. When 500 orders for a piece of clothing are received on the platform, Xu Bingfeng usually stocks 2,000 copies. However, if the final order is less than 100 copies, the returned and backlogged goods cannot be sold, and can only be treated as tail goods at a low price. In his opinion, the number of orders under a high return rate may even be misleading for inventory management.
Diagram / Diagram Worm Creativity
In order to reduce the inventory rate, some merchants try to find ways to find ways from the pre-sale period. Zhou Meng recently set the pre-sale period for the latest batch of clothes at 15 days. According to her, this is because one batch of goods is sent out first, and when the clothes are returned with "no reason to return within seven days", they can be re-issued to the next batch of pre-order customers. Whether this method will work, she is not sure, "When a dress is sent back and forth 5 or 6 times and is not sold, it may not be able to be sold in the end."
Profit margins are constantly compressing, and it is becoming more and more difficult for women's clothing e-commerce to make money. Some of the smaller and almost no brand support merchants have withdrawn due to losses, and the remaining merchants have to take the return cost into account in the price of the goods according to the average return rate, and at the same time reduce the operating costs of each link to ensure the survival of the enterprise.
As a result, the grade of clothing fabrics and environmental standards has been reduced, and the number of imitations infringing on patents has increased. In the long run, women's clothing prices continue to rise, quality becomes more uneven, pre-sales periods are gradually extended, consumer satisfaction continues to decline, and the return rate enters a new round of high, thus falling into a deadlock that is difficult to break.
Why is the "return rate" skyrocketing?
Many merchants believe that the return rate is significantly higher, which is closely related to the platform mechanism, such as the price comparison system, "return shipping insurance", seven-day no reason to return and "refund only" and other policies have spawned a large number of invalid orders.
Although the launch of the price comparison function is convenient for consumers to shop around, Zhou Meng said, "After buying, the system will prompt the price reduction information of the product and remind consumers to return the goods." In this case, some consumers will choose to return the goods for a refund.
Originated in 2013, the return freight insurance has brought vital traffic to the platform, reducing the return cost of consumers in consumption decisions; The "refund only" introduced in 2021 further stipulates that when buyers have quality problems with goods purchased on e-commerce platforms, they can protect their rights to the platform, and after being approved by the platform, they can only get a refund without forcing returns; Returning goods within seven days without reason also gives consumers a "right of repentance".
Especially for women's clothing, some netizens said, "It is also extremely convenient to pick up the parcel at the door, and it has become the norm to take 10 pieces and leave 1 piece." ”
These rules were originally intended to create a better e-commerce consumer experience, but now they have become a loophole in the eyes of some "wool parties". For example, if someone buys a wedding dress or performance costume, wears it for a few days and then applies for a 7-day return without reason, which not only seriously damages the legitimate interests of the business, but also affects the honest and trustworthy market environment.
In addition to the endless stream of individual wool pickers, large-scale wool parties are also common. Xu Bingfeng revealed that someone once placed a large number of orders for clothes with freight insurance from the e-commerce platform, and then refunded them after the goods were received, and then chose to send them back by themselves, and each single freight insurance may pay 8 yuan to more than a dozen yuan, but the actual shipping cost of each order for him is only two or three yuan, and on average, there is a profit of more than 6 yuan per return.
"Abuse of the rules, malicious returns, this part of the people has undoubtedly increased the return rate." Xu Bingfeng said helplessly, "In the past, the requirements for return negotiation and review were strict, but now many situations are handled directly by robots, and the return decision is convenient and arbitrary." ”
It is worth mentioning that the platform rules are not the root cause of the increase in the willingness to return goods out of thin air. Successful ordering is only the beginning of e-commerce consumption, and the key is whether consumers can be satisfied and willing to stay after the goods are in hand.
On the Black Cat complaint platform, many consumers complained that some clothes of fast fashion brands such as ZARA, UR, H&M, etc., had problems such as poor quality, mismatched goods, deformation and fading after several washes. In recent years, these brands have also been accused of plagiarizing clothing layouts in public reports. In order to pursue speed and reduce costs, many merchants have not invested enough in product quality control and design innovation, which has gradually reduced consumer satisfaction with fast fashion brands, which in turn has led to an increase in return rates.
"Not paying attention to quality, pursuing drainage, and over-following the trend are the core reasons for the high return rate of some women's clothing merchants." Li Mingtao, president of the China International Electronic Commerce Center Research Institute, said in an interview.
Women's clothing because of its strong fashion attributes, diverse styles, color and fabric choices, consumers actually receive the goods after the color difference, the size is not suitable, the fabric touch, or the actual body effect is not satisfied with the probability will be relatively large, which actually puts forward higher requirements for aesthetics, materials and technology.
As one consumer said, "When a very lazy person starts to return goods constantly, you can imagine how bad the design and quality of some products are." "After all, for many people, whether there is freight insurance or not, the clothes that they can't wear can't be reluctantly left behind.
Comparison of the strange buyer show posted by netizens. Picture/Screenshot of Xiaohongshu
How to break the situation of e-commerce women's clothing?
Looking at the mountains of returns, Zhou Meng's heart was full of confusion and unwillingness. She worries that more e-commerce companies will not be able to survive after they fall, but she doesn't know where the turnaround is.
In fact, not all women's clothing e-commerce companies are plagued by high return rates.
Industry insiders pointed out that some businesses focusing on subdivisions, such as professional wear, cheongsam, and stores focusing on large-size women's clothing customization, communicate with customers in detail and tailor-made, consumers have clear purchase goals, good shopping experience, and the return rate can be effectively controlled. In addition, e-commerce companies that sell high-end women's clothing, such as cashmere coat stores with fine workmanship, are more cautious in their purchasing behavior and have a lower return rate due to the high quality of the fabrics and higher prices. In addition, the designer-led independent e-commerce brand has a refreshing personalized fashion concept, high quality and price, and the return rate can be maintained at a low level. This type of merchant is currently developing well in the e-commerce platform.
"To get rid of the quagmire of low-price competition in the industry, the first step is to do a good job in the construction of intellectual property protection mechanisms, and introduce more traffic to merchants who focus on research and development, release new products, and build their own brands." Li Mingtao said that the problem of imitation in the clothing industry has been around for a long time, once there is a new product popular, imitation products are flooded on the platform in a blink of an eye, and the production line has not yet started, someone can steal the picture online to make money. In the end, bad money drives out good money, which damages the sustainable development of the industry as a whole, and it is difficult to protect the rights and interests of consumers.
Zhou Meng once encountered the theft of the product detail map, "Even if you appeal to the platform, after you take it off the shelves, those people will change stores and put them on the shelves again." "And the imitation has a price advantage over the genuine version, but the fabric and craftsmanship are far from the same.
In Li Mingtao's view, this situation must not become the norm in the women's clothing industry, and it is necessary for platforms, merchants and consumers to work together to break through the current dilemma.
On July 26, Taobao announced that it would optimize the "refund only" strategy, which will be officially implemented from August 9. The new regulations are expected to "loosen" high-quality merchants, not mandatory "refunds only", provide quality inspection services for merchant appeals, and will use algorithms to identify users with abnormal refund behaviors, giving merchants and consumers more independent disposal rights.
It can be seen that balancing consumer experience and protecting the rights and interests of merchants is very important for mainstream e-commerce platforms.
Li Mingtao said that as the leader of the rules, the platform has a large voice in price setting, cost bearing, promotion mechanism, etc., and lacks strong constraints. The platform and the merchant should form a common goal, rather than the platform just unifying the rules and putting all the responsibility and pressure on the women's clothing merchant.
Specifically, the platform can also work with women's clothing merchants and industry organizations to determine the average return rate to ensure the healthy development of the industry, and take flow restriction measures for merchants whose return rate is higher than the average return rate on the platform, and urge them to reduce the return rate.
When there is a situation where the return rate of a large area of merchants exceeds the warning line, the platform can appropriately adjust the return rules for the women's clothing industry, such as no longer giving away freight insurance, and establishing a consumer return credit evaluation mechanism.
"The rules of appropriate concessions and allowing trial and error are not without a bottom line", Chen Yinjiang, executive director of Beijing Sunshine Consumer Big Data Research Institute, said in an interview that the law protects the legitimate rights and interests of consumers, consumers and operators are both market transaction subjects, and both parties must follow the principle of honest and trustworthy market transactions. If the consumer abuses the no-reason return provision to the detriment of the legitimate interests of the operator, the operator may also require the consumer to bear tort liability in accordance with the Civil Code.
Chen Yinjiang pointed out that consumers should consume more rationally. When shopping for women's clothing, don't just be attracted by low prices and promotions, but pay more attention to the quality, brand and actual needs of the product. For the products you want, carefully review the product details and reviews to understand the details such as fabric, size, etc., to avoid unnecessary returns due to impulse purchases. At the same time, respect the original design, resist plagiarism and counterfeit products, jointly maintain a good market environment, and promote the healthy and fair development of the e-commerce women's clothing industry.
As for the large-scale behavior of relying on freight insurance to earn the price difference, Li Mingtao believes that it is essentially insurance fraud, which violates the original intention of the design of freight insurance products. He said that the freight insurance underwriter should work with the platform party to further improve the freight insurance rules and eliminate the "wool party" of freight insurance from the source. At the same time, it can be referred to the relevant government departments to intensify the crackdown.
Women's clothing manufacturers need to continue to improve their own consumption insight capabilities, make good use of e-commerce big data to adjust the R&D and design direction of women's clothing products in real time, establish a flexible supply chain rapid response mechanism for women's clothing market segments, strengthen brand attributes, rely on product differentiation to avoid vicious competition, and form a positive cycle mechanism conducive to the sustainable development of the industry.
Xu Bingfeng already has a new plan, "When the gross profit margin is close to the critical point, we plan to close the freight insurance, only refund these functions, lose the attraction conditions, the customer flow may experience a period of decline, but the merchants who are confident in their products will finally have the opportunity to return to the right track." ”