July 2023

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The Planet vs. Returns

Let’s talk about returns, they are inevitable, and they have a serious environmental impact. Amazon orders result in a lot of returns, it’s estimated that 30-40% of online orders will be returned. In December-January alone there is an estimated 1 million returned products from Amazon customers. There is nothing wrong with returning products, sometimes they just don’t work out or it’s not what the customer needs or wants, but what do those returns mean for our planet?

Amazon returns account for 5 million pounds of waste that end up inlandfills yearly. Landfill waste does not decompose, instead, landfillscontribute to 15 million tons of carbon emissions in the atmosphere. As wellas pollute soil, groundwater, and local waterways. Trash doesn’t go anywhereand returns only add to that pile. Returns add considerable amounts ofcarbon dioxide to the atmosphere not only through landfills but the entirereturn process. Shipping a single product can produce up to 10 pounds ofcarbon for every 1,000 miles traveled, double that for returning a product.That much carbon emitted per product has a considerable effect on thewarming of the planet.

Looking at returns this way paints a pretty grim picture. What can we do, stop offering returns or at least stop offering free returns? Definitely not, customers expect and often rely on that system changing that could cause a huge loss in consumers. There are other solutions that will reduce the impact of returns and create a more circular business.

  • Encourage mindful shopping and reduce returns with premium content, images, and informative descriptions so the customer knows what they are receiving.
  • Acquire your own returns from Amazon: if they are sellable, resell. Offer used products for consignment or as worn wear, which will increase your sales and customers. Do what you can to ensure your products do not contribute to landfill waste!
  • Donate your returned items or recycle them into something new.
  • Choose sustainable shippers and packaging.

Again, returns are a part of being a retailer online, but they do not have to impair the planet as much as they currently do. Let us know any other ideas you have on reducing your brand’s carbon footprint!
-From Sophie Johnsen, Operations Manager currently pursuing Sustainable business degree

Prime Day PPC Insights (So Far)

For our brands on average:

  • Spent 1.5-2x the daily average for Prime Day
  • 250% lift in PPC Sales compared to 2 days before Prime Day
  • 32% ROAS lift compared to 2 days before Prime Day

First day saw the better results of the two days:

  • Both ROAS and Sales from PPC Campaigns declined in 2nd day
  • 2nd day was actually more expensive to advertise on CPC basis (~10% higher CPCs)

-From Senior Lead Richard Gauthier

“When we know WHY we do what we do, everything falls into place. When we don’t, we have to push things into place.”
-Simon Sinek

Wendi’s Corner

Welcome to the True Hero Monthly Newsletter

Brought to you by our founder – Wendi Mathis Held

Are you profitable on Amazon?
If you are one of our brand partners, you know we talk about profit margin often. As a service provider, we are another line item on the PNL and if you are not profitable, we can be removed. I know that, so we focus on our brand’s margin!

We look at sku level margins and ask for reasonable commissions. That said,we are not always (often, but not always) privy to the internal cost ofworking with Amazon – hours spent on customer service, warehouse laborcost, finance and leadership cost, etc. To the level we can see, we run themargins – landed, invoice cost, marketing spends, promotions, commissions,freight, damage, returns, ASP (average selling price) and all the other thingsAmazon charges on 1P and/or 3P. We look at each sku, factor in all the costsand see which items are truly profitable. On 1P, we look at Amazon’s netPPM (pure profit margin) so we are proactive on how we market andpromote.

Too often, brands do not know if they are profitable with Amazon. Amazon does not make it easy. We help you understand! There are several things that go in and out of the business that need to be taken into consideration. When onboarding brands we will ask how much of your business is on Amazon (we recommend 10-30% – there are exceptions of course!). Next question – is it profitable? Yes – Great, No – Why? We need to start digging into the unknown.

What you don’t know could be costing you margin.