Omnichannel E-commerce: A Retail Strategy Trend For 2023

Good news! The market value of the retail industry in India will hit 1.7 trillion in 2026, an increase of over 80% since 2018! Clearly, the retail industry is zooming at a breakneck pace. 

However, it is quite evident that a single-channel approach isn’t enough any longer, especially if retailers want to be a part of the above growth story. Modern Indian consumers (74%), shop across channels and love the seamless, integrated shopping experience offered by omnichannel E-commerce. 

Now, before you go ahead and adopt an Omnichannel Strategy for your E-commerce business, it’s important to understand the ins and outs of this powerful approach –including the opportunities it presents, the roadblocks in adopting it, best practices, etc. And that’s why we have created this exhaustive guide, the only thing you need to adopt omnichannel E-commerce for your business.

What is Omnichannel E-commerce?

Omnichannel E-commerce is a retail strategy that focuses on offering an integrated shopping experience across multiple channels. It integrates different touchpoints where your customers are likely to interact with your brand into a single unified system. It could include online marketplaces, social media, brick-and-mortar stores, mobile apps, etc. The goal of the omnichannel approach is twofold. One, to enable customers to engage with your brand in any channel they prefer. Two, to ensure that the customers can switch between two channels seamlessly.

What Is The Difference Between Single Channel, Omnichannel, and Multichannel commerce?

ParameterSingle ChannelMultichannel Omnichannel
DefinitionBusinesses sell their products through a single channel.Businesses sell their products through multiple channels that are not integrated.Businesses sell their products through multiple channels that are integrated with each other. 
Options for InteractionA minimal number of options for purchasing, communicating with customer support, and tracking orders.More options. However, there is a lack of integration and consistency across channels.More options with a consistent and seamless experience across all channels.
Data sharing across channels (For creating personalized experiences in other channels)NANot shared across channelsShared across channels
Inventory ManagementVery simple as there is only one channel to manage.Complex because there are multiple disconnected channels.Simple as there is a single centralized inventory to manage the inventory across all the channels. 

How Does Omnichannel E-commerce Work? 

In an omnichannel system, all the channels are tightly interwoven to provide a consistent experience. Customers can start shopping on one channel and continue on the other without losing their cart. They can also track their orders and communicate with customer support via any channel of their choice. 

Here is a simple example of how omnichannel E-commerce works.

Channel 1: Social media

Mary sees an ad on social media for a dress she likes. She clicks on the ad and is directed to the brand’s website. 

Channel 2: E-commerce website

She browses the dress, reads the reviews, and adds it to the cart. However, she didn’t complete the purchase. 

Channel 3: Mobile app

After a few hours, she receives a push notification on the brand’s app with a targeted promotion for the dress she left in the cart. She clicks on the notification and is taken to the same dress’ page in the app. This time, she plans to buy it. However, at checkout, she chooses to pick up the dress in-store as she wants to try it out before purchasing it. 

Channel 4: Phone

She calls the phone support team to ask for the address of the nearest store. She also collects information about the store timings. 

Channel 5: Physical store

She goes to the physical store and tries on the dress. The size doesn’t fit her, so she exchanges the product then and there and leaves with the one that fits her.

How Omnichannel E-commerce works

As you can see from the above example, the customer is seamlessly shifting between different channels without any interruption. This drastically improves their overall experience and trust factor with your brand. 

Businesses adopting an Omnichannel Strategy have to employ a centralized inventory management system to ensure that the customers have access to the same products at the same price point across all channels. They must also ensure that their messaging is uniform everywhere. This keeps the customers at ease, knowing that they have multiple options to reach out to your brand in case something goes wrong in their purchase journey. 

Examples of Omnichannel E-commerce 

Let us explore the examples of brands that have successfully implemented Omnichannel E-commerce. From retail giants to upcoming businesses, these companies have leveraged omnichannel strategies to drive sales, increase customer loyalty, and stay ahead of the competition.


How Pepperfry is using omnichannel commerce to boost customer experience

Pepperfry is a leading E-commerce brand that specializes in furniture and home décor. It has adopted an Omnichannel Strategy allowing its customers to order their products anytime, anywhere from any device. A key aspect of their omnichannel approach is the ‘Studios’ where people can explore and experience all types of furniture in person. Even though customers cannot purchase furniture from these studios, they help in making informed purchase decisions. 

Channels present: Website, mobile app, social media, and physical store.


Omnichannel in ecommerce example from Lenskart

Lenskart is an optical retail chain that has established a strong network of stores across the country. It has successfully established an omnichannel ecosystem where customers can either place an order online or from a retail outlet. At the store, they get to try on the product in-person, but the stores have a limited category of products. The online channels have been carefully designed to accommodate its vast catalog that customers can browse and order from the comfort of their homes. 

Channels present: Website, mobile app, physical store, social media, and marketplaces like Amazon and Flipkart.


Omnichannel Ecommerce Example From H&M


H&M is a Swedish fashion brand with a strong retail presence in India and known for its trendy and affordable clothing. Besides its brick-and-mortar stores, the brand also has an online website and a mobile app for customers to purchase their products. H&M has invested in creating a seamless in-store experience for its customers looking to try the attire before they buy. Customers can browse products online and find nearest stores having them. The brand is even quite active on social media platforms showcasing its products from time to time and highlighting promotions and new sale events if any.

Channels present: Website, mobile app, social media, and physical store.

Why Brands Should Focus On Omnichannel E-commerce?

Let us take a closer look at how Omnichannel E-commerce can help you stay competitive in today’s retail space – 

Better Customer Experience

An omnichannel experience puts the customer first. It prioritizes their needs and preferences and delivers a better customer experience. For starters, it allows customers to shop on their own terms – a key recipe for offering a better customer experience. Some would like to buy in-store, some prefer E-commerce sites, and some mobile. By offering a range of channels, you are catering to different customer preferences, which can lead to a better overall experience.

You also reduce the time it takes for customers to complete a purchase. A simple example would be allowing customers to use their smartphone to scan a barcode in-store and complete the purchase on your E-commerce store. They do not have to wait in line to make the payment. In other words, you are effectively reducing the friction in engaging with your brand, which has a direct impact on customer experience. Decathlon has mastered this art to deal with the weekend rush. They have built a dedicated Scan & Go app that lets customers make payments through their smartphones by scanning the QR Code while exiting the store, making the check-out process seamless. 

Increase in Sales and Website Traffic

By being present on multiple channels, you can reach a wider audience and provide customers with multiple options for engagement. This creates more opportunities for customers to make a purchase, which can lead to increased sales. 

Omnichannel E-commerce also improves your brand’s visibility among potential customers, which can drive website traffic. For example, if you constantly post brand ads on social media or set up multiple pop-up stores in the locality of your target audience, they will be able to recognize your brand and products better. And customers are always more likely to purchase from a brand that they are familiar with. 

Boost Customer Loyalty & Retention

In an omnichannel approach, you offer multiple methods to shop, different places to engage, and a much more personalized experience. This automatically attracts a band of loyal customers who are not only going to purchase from you repeatedly but also share their positive experiences with others.

Omnichannel E-commerce also allows for better communication with your customers. This is the foundation of any strong relationship. For example, you can use different social media channels to respond to customer queries and provide customer support. This is a great way to show your commitment to customers, which will ultimately lead to better loyalty and retention. 

Better data collection and understanding of the customer journey

Once you implement an Omnichannel Strategy, you’ll be able to collect customer data from one channel and fill in the data gaps on other channels. You will have access to complete, organized, and centralized data. This will give you a better picture of what products or content your potential customers are engaging with, how they are interacting with them, at what point in time, etc. 

This valuable information can then be used to understand the customer journey and personalize their experience irrespective of where the customers are or which device they use. For instance, you can use the information collected in an E-commerce store to provide customized product recommendations when customers visit your physical store. This can improve their overall shopping experience and increase the likelihood of a sale.

Challenges with Omnichannel E-commerce

While Omnichannel E-commerce can provide numerous benefits to you, it can also present several key challenges that must be addressed. Here are some of the common challenges associated with implementing Omnichannel E-commerce –

Logistic challenges 

As you know, Omnichannel E-commerce is all about offering a consistent experience to users irrespective of where they engage with your brand. To achieve this, your inventory, logistics, and delivery processes should be in perfect sync across different channels. 

With multiple channels to sell through, it gets very difficult to balance stock and demand. Overstocking is very common in omnichannel implementations. This is primarily due to a lack of real-time visibility into inventory levels across all channels.

There are also logistical issues associated with returns and cancellations. Many E-commerce brands do not have clear policies and procedures in place for handling returns owing to the sheer complexity involved in handling those processes in multiple channels. This can lead to customer dissatisfaction and result in a loss of sales.

Data privacy challenges

Collecting customer data is the only way to personalize the customer experience and drive sales. While customers love personalized experiences, they fear for their privacy due to the misuse of data collected. Recent data breach incidents have only strengthened their apprehension. 

When you integrate multiple channels and adopt new tools and processes, you are getting exposed to new variables and risks. This considerably increases the risk of cyber attacks. Hackers can always exploit the vulnerabilities in one channel to gain access to sensitive data in another channel, putting customer data at risk.

To counter this, you must take precautionary measures like multi-step authentication, training employees on various data attack types, and following password protection. You also need to ensure that general industry guidelines for security and data privacy, such as GDPR and CASL are followed in all the channels. 

Globalization challenges 

When you are expanding to multiple countries, you have to consider the local language, currency, laws, and cultural trends to be successful there. For instance, customers in the US would not like to see the final order amount in Indian Rupees. A French customer would like to see the website content in French. And, data privacy laws are also different in different countries. Implementing this in one channel is difficult. Imagine doing the same across multiple channels that are connected with each other. It will not be easy. 

One way to deal with this challenge is by adopting an E-commerce solution that can handle multiple catalogs and currencies. However, creating and managing multiple catalogs is also not easy when you do it in-house. The simpler option is to partner with a Seller of Record or E-commerce specialist like ANS Commerce who will take care of everything related to E-commerce while you focus on delivering more personalized global experiences. 

Lack of tech infrastructure

Integration of multiple channels in Omnichannel E-commerce requires a robust technology infrastructure that can support various software applications, CRMs, Inventory management tools, Order Management Tools, and data analytics tools. 

Most companies lack this or find that their current tech stack is not advanced enough to support the complex omnichannel requirements. 

In other words, their existing commerce platform will not be able to scale with their omnichannel strategy. As a result, many businesses end up re-platforming their E-commerce solution or hiring additional support, which can drastically increase the cost. Thinking of moving your online store to a new platform? Checkout our blog on E-commerce migration and replatforming to get started. 

How to create an Omnichannel Strategy for your brand?

Creating an effective Omnichannel Strategy requires careful planning and execution, taking into account your target audience and channel goals. Let us now explore the key steps involved in creating an Omnichannel Strategy for your brand.

Step 1: Understand your target audience

Start by analyzing your customers’ preferences, behaviors, and buying habits. Collect data, such as purchase history, demographics, and social media activity, to gain insights into their preferences and how they interact with different sales channels. Send surveys, invite customer feedback, and leverage social listening tools to gather this data. 

Step 2: Select the right channels

Now, select the right channels for your business. Pick the ones that your customers prefer. For example, if most of your customers spend time on social media shopping, include that as one of your channels. You can also pick ones suitable for your business. For example, if you are in the home decor industry, you might want to include physical stores as one of your channels, as it will help customers visually experience the product before buying. 

Step 3: Define goals for each channel

Each channel should have a clear purpose that aligns with your overall omnichannel strategy. For example, your physical store could focus on offering a more personalized shopping experience, while your website may focus on convenience. 

Step 4: Connect the channels

Now start connecting all your channels. While executing this step, you must ensure that customers can switch between different channels seamlessly. For instance, if a customer starts shopping on your website and later visits your physical store, they should be able to access their online shopping cart in-store.

Step 5: Maintain your channels

Once you have connected the channels and established your Omnichannel Strategy, it is essential to maintain and update your channels regularly. Monitor customer feedback and track sales performance to identify areas for improvement. Additionally, keep up-to-date with emerging technologies and trends to stay ahead of the competition.

Ready to provide an omnichannel experience to your customers? 

A FlipKart group company, ANS Commerce, is India’s #1 Full Stack E-commerce Growth Partner, renowned for its expertise in implementing omnichannel strategies. If you’re looking to provide your customers with an exceptional shopping experience, then ANS Commerce is the partner you need. 

With our deep understanding of the E-commerce landscape and proven track record of success, we will help you seamlessly integrate all of your customer touchpoints, from brick-and-mortar stores to E-commerce platforms and marketplaces, to create a cohesive omnichannel experience. 

By partnering with us, you can rest assured that your customers will enjoy a consistent, personalized shopping experience, regardless of where they are in the buying journey. 

Want to know how we can scale your E-commerce business? Book a free consulting session with our expert today. 

Strategies To Streamline Return Management And Reduce Cost: A Complete Guide

Here’s a fact— at least 30% of all products ordered online are returned as compared to about just 9% in brick-and-mortar stores. Also, a survey suggests that 92% of consumers will buy again if the brand’s online return process is easy.

What does this data depict?

The need to have an easy return policy for any E-commerce brand. 

Having a return process in place allows your customers to have confidence in buying from you. It’s a signal from you that you put your customers’ satisfaction above everything and value their time and money. 

However, handling returns isn’t easy. You need to have a streamlined Return Management process while keeping costs down.

In this article, we’ll be talking all about that. Starting from the basics.

What Is E-commerce Returns Management?

In retail or E-commerce, Returns Management is a procedure that deals with customers who wish to return purchased items. This process involves engaging with customers, receiving returned products, and replenishing the stock with returned items. It is crucial for retailers to handle Returns Management effectively as mismanagement can lead to significant cost implications.

Why Do Customers Return A Product?

Returns aren’t a bad thing, in fact, it’s inevitable. No matter how good your products are, there will always be returns.

However, you can always decrease the return rate by implementing some common strategies. Now to decrease the return rate, you first need to understand what are the common return reasons. Here are a few reasons why customers return products:

Incorrect Product Size

Over 50% of the returns are because of sizing issues. While this may seem beyond the control of an online store, there are ways to mitigate it. 

In a physical store, customers have the opportunity to try products and get a better idea of their size. They can even try on clothes and shoes to check for proper fit and comfort. But this is not possible while shopping online. Discrepancies due to sizing can easily be tackled by offering detailed product description and using size standardization. There are many plug-ins available in the market to help you recommend accurate sizing to your customers. 

Product No Longer Required

Many customers order products online, but sometimes circumstances change and they no longer require the item when it arrives. For instance, a customer may have ordered something online and by the time it comes, you might have got a better version offline, thus not needing it anymore. 

Another reason for returns is when an upgraded version of the product becomes available. Electronics, such as chargers, mobile phones, tablets, and laptops are common examples of this. While this type of product return may be out of your control, there are ways to encourage customers to keep the product by highlighting its unique benefits and/or offering a discount coupon. 

Mismatch Between Product And Description

It’s not uncommon for products to appear different in reality than they are described in the product description, which can lead to customer disputes and reflect poorly on business practices. To avoid this, product descriptions must be detailed and accurate. 

Crafting complete, clear, and accurate descriptions is crucial to answering customers’ questions and avoiding disputes. Additionally, it’s important to proofread the descriptions and accompanying images before publishing them, as first impressions matter. Take the time to write, read, edit, re-edit, and proofread descriptions to ensure their accuracy and avoid any potential misunderstandings. Make sure your descriptions are accompanied by clear product images from different angles, leaving no surprises for the end consumers. By providing clear descriptions and real-life product images, sellers can prevent unnecessary disputes and returns. Read our blog on how to click awesome product photographs to get started. 

Wrong Product Shipped

Effective product picking is a critical task in the fulfillment process, and failure to do so diligently can lead to a significant number of returns. It’s important to ensure that the correct products are properly sorted and selected, as mistakes can result in unnecessary labour and shipping costs. 

To mitigate this risk, partnering with a 3PL (third-party logistics) fulfillment provider with robust OMS (Order Management Systems) can be a viable solution. These providers have expert teams who handle products, sort them, and pack and ship them. They also offer storage solutions, and when an order is received, they can process it on your behalf. By utilizing the services of a 3PL provider, businesses can minimize the risk of errors in product picking and save on associated costs.

E-commerce Return Management Process Explained

E-commerce Return Management Process

The Returns Management process involves multiple touchpoints or points of interaction between the customer and the E-commerce business. However, it all begins with the customer initiating a return.

Customer Requests A Return On Their Order

Returns can occur for a variety of reasons, some of which may seem illogical and based solely on the customer’s emotions. Let’s consider the scenario in which a customer is dissatisfied with their order. 

In this case, the customer would select the item they wish to return and provide a valid reason, as requested by the E-commerce business.

Return Request Is Rejected Or Approved

If return requests do not meet the conditions set by the E-commerce business, they may be rejected, and the interaction regarding that order ends. 

However, if the return request is valid, it can be approved, and the process for initiating the return will begin.

Order Is In Transit

From the moment an order return is scheduled to be collected until it reaches the E-commerce store, it is considered to be in transit. During this time, E-commerce brands can take advantage of these moments to share return status updates with their customers.

Product Is Returned To The Store

After the returned product has been received by the E-commerce store, collecting customer feedback on their shopping experience with the brand can begin. If the feedback is positive, the E-commerce business can consider encouraging the customer to shop for a replacement product (if they haven’t already chosen one).

E-commerce Returns Management Process: Best Practices

We’ve already talked about the importance of having a good Returns Management process in place and now here are some best practices to help you achieve the same.

Have A Shopper-friendly Returns Policy

More than 67% of shoppers check a brand’s return policy before buying. This is why it’s imperative to dedicate a page on your website clearly describing your return policy.

Here are a few things to consider while creating a return policy-

  1. Clarify conditions and deadlines for return.
  2. Mention your objectives and customers’ needs clearly.
  3. Don’t encourage fraudulent returns and wardrobing.

By creating a customer-friendly returns policy that balances flexibility with the E-commerce store’s objectives, a win-win situation can be achieved. This can result in increased conversions without the need to spend excessively on customer acquisition or return-related expenses. 

To ensure that customers can easily find the returns policy, it should be prominently displayed in areas of high visibility, such as the home page, product pages, checkout page, and FAQ section. This will help to minimize confusion and streamline the returns process, ultimately improving the customer experience. Read our complete guide on E-commerce return policy to get started. 

Avoid These Common Mistakes

Here are two of the most common mistakes that brands make while selling online.

Mistake: Inaccurate product photo

Photos are among the first few things that customers check before buying any product. If the photos are misleading or different from the real product, the chances of returns are high.

Solution: Keep the photos real. You can make it look attractive but make sure it still shows what exactly the product is like. You can also ask your customers to share real-life photos of the product. Ask them to post their pictures of your product and tag your brand on Instagram. And then use tools like Pixlee, Yotpo, or Later to automatically collect images/videos and display them on your website.

Mistake: Wrong product description

Before buying anything your customers would do extensive research and after that research, if the product doesn’t look or feel like the description, they will return it and may never come back. 

Solution: Write descriptions that match the product’s qualities and standards. 

For example, Nykaa provides in-depth as well as visually appealing product descriptions that are easy-to-read and understand.

Product Description Example By Nykaa


Offer Fast And Easy Returns 

A staggering 92% of shoppers are more likely to make repeat purchases if the returns process is easy. Furthermore, E-commerce businesses can simplify the returns process by enabling customers to initiate returns easily and quickly through a returns portal. 

With a returns portal, customers can access their orders, select the item they wish to return, provide a reason for the return, and select a return method in just a few minutes. This streamlined experience can make customers more inclined to continue shopping with the E-commerce business, ultimately boosting customer loyalty and retention. Also, adding the option to return in-store can also be helpful for people who want to return immediately. 

Collect Customer Feedback

Collecting customer feedback is essential. The reason behind this is that these feedbacks provide you with valuable insights into the customer experience. By understanding why customers are returning products and their overall satisfaction with the returns process, E-commerce businesses can improve their Returns Management policies and procedures. 

Moreover, customer feedback can also help identify common issues that customers may face when returning products. For example, if customers frequently experience delays or issues with return shipping, you can take steps to address these issues and improve the returns process.

How Flipkart collect feedback from customers

Use Data To Decrease The Chances Of Return

Making your marketing and operations team work together can get your brand to touch new heights. 

By leveraging customer feedback and segment data, you can easily identify the following things:

Problematic products:

By checking and analyzing feedback and returns you can easily spot which products are problematic and getting returned the most.

Problematic customers:

Create personalized profiles for high-risk customers by utilizing customer segmentation and feedback. Share this information with your marketing team to help them determine the appropriate customers and products to target. 

When a product with a high return rate is bought or a customer with a history of high returns makes a purchase, send them a targeted email.

Problem with the products that are good but different:

For instance, with the help of user feedback, you know there’s a t-shirt that runs one size smaller than the standard size. Now to handle this, you can mention on that particular brand’s products’ page that the size runs smaller than the usual ones. This small note will help customers determine and order the right size and, in turn, will reduce returns. 

Restock Returned Products To Improve Inventory Flow

The success of a retailer heavily relies on its inventory management. Apparel products, in particular, tend to lose their value quickly over time, which means it is essential to avoid being left with a large amount of unsold merchandise at the end of the season.

This is exactly why effective inventory management and proper reverse logistics are crucial for E-commerce retailers.

About 30% of products sold are returned. Timely grading and restocking returned products are vital as every minute in the warehouse and every touch by a worker increases the cost. Inefficient handling of returns can lead to up to 10% of sales revenue loss. This issue becomes even more significant for multichannel sales, where fully integrated inventory management can make a significant difference. 

Thus, streamlining the returns process improves both customer experience and operational efficiency.

Recapture Costs From Damaged Good

Recapturing costs from damaged goods is the process of recovering the real value of the returned product. In this process, instead of simply rejecting the product, you can try to salvage some value by repairing, repackaging, or reselling the product. By recapturing the costs of the returned product, you can reduce your losses and improve your bottom line. Proper inventory management and reverse logistics processes can help you streamline this process and recapture as much value as possible from damaged goods.

Provide Exceptional Customer Service During Returns

According to a report, a whopping 89% of consumers say that they are more likely to return and make another purchase after positive customer service. 

It’s no secret that customer service is an essential component of brand building. Nearly 3 out of 5 customers report that good customer service is crucial to stay committed to a brand. And if you don’t provide good customer service during returns, they will feel betrayed and may never buy from you again. 

Outsource Your Reverse Logistic Process To ANS Commerce

At ANS Commerce, we specialize in helping E-commerce businesses to optimize their storage and supply management processes. Our services encompass the entire supply chain, from product inwarding to final delivery and even Return Management. By leveraging our expertise and technology, we can help streamline your operations and improve efficiency, ultimately saving you time and money. 

Whether you need assistance with inventory management, warehouse organization, or order fulfillment, our team is dedicated to providing customized solutions that meet your unique needs. Let ANS Commerce be your partner in optimizing your supply chain and taking your business to the next level.

Connect with our E-commerce expert today to see how we can help you grow your business. 

How E-commerce Brands Can Use Merchant of Record And Seller of Record For Global Expansion

The world has become a much smaller place today – a true global village where everyone is a click away. Even E-commerce businesses have joined the party, selling their products across borders to tap into new markets and expand their customer base. But the expansion is not without its own share of hurdles.

Cultural differences, language barriers, currency fluctuations, and regulatory complexities are just a handful of obstacles that they encounter on their way to international success. Such challenges have made global expansion a really slow endeavor. In fact, the share of cross-border sales in total E-commerce sales worldwide has risen only by 7 percentage points between 2016 and 2022.

The easiest way for businesses to counter these issues and experience exponential growth internationally is by partnering with a Merchant of Record (MoR) and a Seller of Record(SoR). Both these entities help you navigate the difficult waters of cross-border trade and achieve success on a global scale. In this post, we will take a look at both these concepts along with their key differences. 

What is a Merchant of Record?

A Merchant of Record (MoR) is a service provider that acts as a legal entity responsible for selling goods to end customers. It takes care of the financial and legal aspects of your business, including processing payments, managing taxes, and handling compliance. The primary goal of an MoR is to enable businesses to sell internationally without worrying about local laws and regulations. An MoR does not assume the identity of the business selling the goods and will always be identified separately as a third party.  

How does the Merchant of Record model work?

What is merchant of record

When the end customer buys from your E-commerce store, they are officially buying it from your MoR partner. They are the legal seller of your product in the country of your customer but do not hold any inventory. In this model, the service provider becomes the only buyer of your goods in that country. 

Once the MoR partner receives the order notification, they buy the product(s) and resell it to the customer. They take care of the international payments and taxes, and your customers do not have to worry about foreign exchange fees as they are paying a local business in local currency. 

Key responsibilities

  1. They are responsible for securely processing customer payments, including managing payment gateways and processing credit cards in accordance with applicable laws and regulations.
  2. They are responsible for calculating, collecting, and remitting taxes related to daily online transactions.
  3. They are responsible for implementing protective measures against fraudulent activities 
  4. They are responsible for generating and maintaining accurate financial reports.
  5. They are responsible for managing relationships with payment service providers, financial institutions, and other stakeholders involved in the transaction process. 

What is Seller of Record?

A Seller of Record is another legal entity that is entirely responsible for selling and delivering goods to your customers. Unlike MoRs, who never own the products( and the inventory) (in the customers’ eyes), the SoRs can be the owners and even responsible for fulfilling customer orders, provided you authorize them. The main goal of a Seller of Record (SoR) is to handle the entire lifecycle of a sale so that the business can concentrate on more mission-critical activities.

How does a Seller of Record model works?

What is seller of record

You give the SoR the legal right to sell your goods under their name, making them the original seller of your products in front of the customers. When a customer purchases the product, the SoR handles the sales transaction, including processing payments, issuing invoices, and collecting customer information. They also become the primary point of contact for customers regarding purchases.

The SoR works in a revenue-sharing model, where you receive a percentage of the sales revenue, while the SoR retains a percentage as compensation for their services.

Key responsibilities

  • They are responsible for managing orders and fulfilling them. It may include anything from inventory management to shipping and delivery.
  • They are responsible for the quality management and the performance of the products being sold.
  • They are responsible for providing customer support related to products, orders, returns and refunds, etc.
  • They are responsible for price management, including setting prices, managing discounts and promotions, etc. 
  • They are responsible for maintaining accurate records of sales transactions, financial transactions, and customer data

Difference between Merchant of Record, Seller of Record, and Payment Service Provider

ParameterMerchant of RecordSeller of RecordPayment Service Provider
Core ResponsibilityActs as a merchant and is responsible for payment processing, compliance, and financial and legal liability.Acts as the seller of the products and is responsible for day-to-day operations and customer support.Provides payment processing services, but does not take on merchant or seller responsibilities.
Legal LiabilityAssumes legal liability for processing payments, managing refunds, and handling chargebacks.Assumes legal liability for products sold.Does not assume legal liability for payment processing or product sold.
Customer RelationshipManages the customer relationship, including customer communication, support, and issue resolution related to payments.Manages the customer relationship, including product inquiries, returns, and refunds, .Typically does not manage the customer relationship related to payments, as it is primarily focused on payment processing.
Fraud ManagementResponsible for monitoring and preventing fraudulent activities related to financial transactions.Not responsible for fraud management. Not responsible for fraud management. 

Benefits of using a Seller and Merchant of Record services

Using a Seller of Record and Merchant of Record service can offer several benefits for businesses, especially in the E-commerce space. Some of the key benefits include:

  1. Access to legal expertise

Both the SoR and MoR service providers are well-versed in navigating the complex landscape. They can offer their expertise in different areas like taxation, consumer protection, and data privacy laws. Through them, you will ensure that the sales transactions are always conducted in compliance with applicable laws, reducing the risk of penalties.

  1. Global expansion

SoR and MoR enable you to enter new markets without having to handle the intricacies of international sales, including local taxes and customs duties. You can focus on your core competencies, such as product development and marketing, while leaving everything else to the SoR and MoR service provider.

  1. Improved customer experience

The SoR and MoR service providers have extensive knowledge about the pulse of the local customers and can offer better customer service to your end customers in that country. This rapport is necessary to build a positive customer experience and trust with customers, as they have a single point of contact who knows their needs better. 

  1. Lower operational cost

SoR and MoRs can significantly reduce operational costs by eliminating the need to hire, train, and manage staff for handling day-to-day tasks such as order processing, payment collection, and customer support. Also, you need not invest in software licenses, hardware, infrastructure and other operational resources. 

  1. Faster execution

When you partner with an MoR or a SoR, you get a lean and agile team solely focused on managing the operational aspects of your business. They can efficiently handle different tasks by using their expertise. They can also adapt to changing market conditions and scale your operations up or down swiftly, providing you the capability to respond quickly to market demands.

Factors To Consider While Partnering with a Global Merchant and Seller of Record for E-commerce Expansion

Partnering with an MoR or an SoR for global expansion can be a strategic decision, and one needs to consider several factors before finalizing such a partnership. Here are some key factors to keep in mind:

  1. Reputation

Evaluate the reputation and experience of the MoR or the SoR service provider. Look into those companies with a proven track record in handling international E-commerce transactions. Research their credentials and go through the reviews on different platforms to ensure they are reliable and trustworthy.

  1. Knowledge of Local Laws & Regulations

Ensure that the provider you choose can process payments in the countries where you plan to expand your E-commerce operations. Also, verify if they understand the local laws and regulations in all those countries, including tax requirements, data protection, and consumer rights. It is also important that they have a good understanding of the customer base, so that you can start tapping into the local market right away. 

  1. Pricing and Fees

Understand the pricing structure and fees charged by the SoR and MoR providers for their services. Compare them with other providers in the market to ensure they offer competitive pricing. Consider factors such as setup fees, transaction fees, currency conversion fees, and any other additional charges that may apply.

How much do Merchant and Seller of Record services cost?

The cost of MoR and SoR services can vary based on multiple factors, including the volume of transactions, the planned location of your business, the expertise of the provider, and so on. Also, there are several components in the fee structure of a Seller of Record and Merchant of Record provider that can determine the final cost. Here are some of the parameters – 

  1. Service fees: This is usually a percentage of the transaction value or a flat fee per transaction. This is the main cost you incur for partnering with an MoR and SoR for outsourcing various agreed functionalities of your business. 
  2. Set-up fees: This fee is usually charged while onboarding a new seller. For the MoR and SoR, it will cover initial setup costs, such as integrating with payment gateways, configuring tax settings, and other technical setup tasks if any.
  3. Additional fees: There may be certain additional fees for optional services, such as chargeback management, currency conversion, and custom reporting. 

Expand Your Footprint in India with ANS Commerce By Your Side 

ANS Commerce is a leading E-commerce growth accelerator that offers comprehensive solutions to businesses looking to expand their online presence in India. With a deep understanding of the Indian market and a wide range of services, we are the go-to partner for many international businesses looking to establish a strong foothold in India. 

From setting up online stores, E-commerce marketplace management to ROI-driven performance marketing services and managing logistics and order fulfillment, we take care of everything related to your everyday operations so that you can focus on other strategic activities and capitalize on the booming E-commerce market in the country.

To know more about how ANS Commerce can help you expand your business in India, book a 1:1 consultation with our E-commerce experts

How To Calculate E-commerce Return Rate?

As an E-commerce seller, no one better than you know the importance of keeping an eye on various business metrics. After all, these metrics offer you a treasure trove of insights that will help improve customer satisfaction, product performance, and overall business health. One such key metric that holds immense significance for your business is the Return Rate. Calculating and analyzing it correctly is an essential step in making informed logistics-related decisions. In this post, we will dive into the ins and outs of E-commerce Return Rate calculation, including why it matters, how to measure it accurately, and how to optimize it. So, grab your calculators, and let’s get started.

What Is The E-commerce Return Rate?

The E-commerce Return Rate is a metric that measures the percentage of online purchases returned by customers. In other words, it highlights the frequency at which customers return the products for various reasons. This value can be used to evaluate the effectiveness of your online store’s customer service, product quality, and overall user experience. A high Return Rate indicates customer dissatisfaction or issues with the quality of your products.

How Do You Calculate Your E-commerce Return Rate?

Let us learn how to calculate your online store’s e-commerce rate, along with a simple example to illustrate the same. 

Return Rate

The return rate can be calculated by dividing the total amount of products returned by the total amount of products sold in a particular period. Its formula is given by –  

E-Commerce Return Rate = (Products Returned/Products Sold) X 100

For instance, if you sold 10,000 products in 1 year while 2000 units were returned, your Return Rate would be: 2000 / 10,000 x 100 = 20%

As you can see in this example, 20% of the products sold in this timeframe were returned. However, this value doesn’t answer why the products are getting returned or how the return process is taking place. Put simply, the Return Rate doesn’t highlight how many of those returns could have been avoided with a simple solution and how many of those returns were actually ‘exchanges’. And that’s why it is important to measure the refund rate and exchange rate of your online store.

Refund rate

As the name suggests, the Refund Rate is the total number of refunds given for the total number of returns in a given period. Its formula is given by – 

E-Commerce Refund Rate = (Refunds Given/Products Returned) X 100

In the same example, if the number of refunds given was 500, then the refund rate would be:

500 / 2000 x 100 = 25%

Many people use Refund Rate and Return Rate interchangeably, which is wrong! As you can see, they are two different metrics representing two different aspects of your E-commerce business.

So what does a Refund Rate indicate about your business? Let us answer this with another example. Imagine you are an online fashion retailer. A customer buys a shirt but returns it due to an incorrect size. They end up exchanging the shirt for another one in the right size. As you can see here, even though this order resulted in a return, it didn’t result in a refund. In other words, it did not create a loss of revenue for your business. 

However, if the customer wanted a refund strictly, it could lead to revenue loss and indicate other issues with the product or your business, such as late delivery, poor product quality, defective product, product not matching the description, etc. All these are serious issues that can also result in loss of customers and loss of reputation. So keep a close eye on your Refund Rate along with your Return Rate. 

Exchange Rate

This is another metric you must measure, along with the Return Rate and Refund Rate, for improved visibility into your returns operations. It is the total number of exchanges made for the total number of returned orders in a given period. Its formula is given by – 

E-Commerce Exchange Rate = (Exchanges Done/Products Returned) X 100

Going back to the same example, if the number of exchanges done was 1000, then the exchange rate would be: 1000 / 2000 x 100 = 50%

After selling, the next best thing for an E-commerce business is exchange. Why? Because it will not result in a loss of revenue (apart from the minor shipping costs). Sometimes, it can even result in an upsell. 

Your exchange rate should always be higher than the refund rate, as it indicates that your brand has been successful in convincing customers to once again try your brand’s product despite not being happy with the original process. It can also indicate that your organization has a seamless exchange process, adding to improved customer experience and brand loyalty. 

What Is The Average E-commerce Return Rate In India? 

E-commerce has seen tremendous growth in India in recent years, with many consumers turning to online shopping due to convenience and accessibility. At the same time, the Return Rates have surged in many categories. But before we look into the different categories where returns are maximum, let us look at the average Return Rates in different channels. 

Average Return Rate Across Selling Channels

  • The average Return Rate in E-commerce stores in India is around 30%
  • E-commerce Return Rates in India can shoot up to 40% during the festive time
  • The Return Rate is only 10% in brick-and-mortar stores in India. 

E-commerce Return Rates by product category

Returns are inevitable in every industry. However, some industries are disproportionately affected. These industries feature products that are highly subjective when it comes to fit and style expectations. Unsurprisingly, clothing, bags, shoes, and accessories take the top spot in the list of most returned online purchases by Indian customers. A staggering 49% of Indian online customers returned clothing, while 39% of customers returned bags and accessories. Only 22% of customers said that they did not return anything back to the online store. 

Most returned online purchases by category in India

What Are The Common Reasons For Product Return?

Product returns are a common challenge in the world of E-commerce, and there are various reasons why customers may choose to return a purchased product. Here are the most obvious ones:

  1. Defective Products: Customers may return products that are damaged, broken, or have missing parts. In most cases, the product gets damaged during shipping due to poor handling and bad packaging. 
  2. Size, Fit, or Color Issues: Customers may return products that do not fit them properly. This is a common return reason in the clothing and footwear categories. Color discrepancies between the received product and product image can also lead to returns.
  3. Buyer’s Remorse: Customers may return products if they change their minds after making a purchase. This is quite common among impulse purchases. Once received, customers realize they do not actually want the product.
  4. Performance Issues: Customers may return products if they experience issues with the quality or performance of the product. It could be malfunctioning electronics, poor durability, or other product-related problems.
  5. Negative after-purchase experience: Customers may return products if they experience poor customer service, unresponsive or unhelpful sellers, or any other negative experience after placing the order. 
  6. Delayed delivery: Customers may return products if the order is delivered after the promised delivery date. Delayed deliveries can lead to frustration, disappointment, and inconvenience, prompting them to return the products. 
  7. Better Pricing from the competition: If the customers can find the same product at a lower price on some other site, they may return the product they purchased from your site. Make sure you are providing a competitive price on your website. 

What Is The Impact Of A High Return Rate?

When your Return Rates soar, it can have far-reaching repercussions on your business, ranging from financial losses to operational difficulties. Let us explore some of the consequences of a high Return Rate in the E-commerce space – 

  1. Impact on finances 

Whenever your customers return products, it results in unwanted costs associated with processing returns. Besides refunding customers’ payments, you may have to bear the shipping charges to return the product to the origin. Also, in most circumstances, the returned products may not be in a resalable condition. This can result in further loss of their original value. In summary, high Return Rates can cause a dent in an E-commerce store’s profitability and cash flow.

  1. Impact on operations

Processing returns is not easy. It is a time-consuming and resource-intensive process. You will require additional labor to manage inventory and logistics. Returns can also disrupt your regular inventory management process. Returned products have to be restocked, refurbished (or disposed of), and sold again. High Return Rates can also lead to excess inventory of returned products, locking your capital and warehouse space. 

  1. Impact on customer loyalty

High Return Rates can affect customer satisfaction and loyalty, which will ultimately lead to reduced customer lifetime value. Returns are inconvenient and time-consuming for customers. If they feel like they are constantly returning products, it can negatively impact their overall satisfaction with your brand. Dissatisfied customers are less likely to be loyal and may switch to competitors who offer better quality products and a better experience. 

  1. Impact on reputation

High Return Rates can also negatively impact the reputation of your E-commerce business. Customers who experience repeated returns will convey their frustration in the form of negative reviews. When potential customers go through these reviews, they will view them as a sign of poor product quality, inaccurate product descriptions, or inadequate customer service, all of which can result in a loss of trust and credibility for your brand. 

  1. Impact on environment

Returns can result in additional transportation, packaging waste, and potential product waste if returned items cannot be resold. This can lead to environmental concerns, such as increased carbon emissions and higher waste generation, both of which may affect your business’s sustainability and CSR efforts.

Ways To Reduce The E-commerce Return Rate 

With online shopping becoming the norm, the rate of product returns has drastically increased these days. However, certain proactive measures can be taken to tackle this issue head-on. Here are they:

  1. Provide detailed information

About 23% of returns are due to inaccurate or misleading depictions of the product. Provide detailed specifications and high-quality images for every product so that there are no last-minute surprises. This will drastically reduce the likelihood of returns due to product-related issues. Similarly, to avoid sizing-related returns, provide an easy-to-read size chart for every product. If possible, offer fit recommendations so that customers always pick products in the right size. 

  1. Have a clear and transparent return policy

Around 67% of customers check the returns page before making a purchase. So you must have an easy-to-comprehend return policy for your E-commerce business. It should provide all the crucial information, such as how to initiate a return, possible timelines, and any associated fees or restrictions. A transparent and clear return policy builds trust with your customers and helps set realistic expectations when it comes to product returns.

  1. Perform thorough quality control and inspection

When you implement robust quality control measures in your E-commerce store, it will automatically reduce the number of defective or damaged products being shipped to end customers. If you have the budget, hire a separate team that will thoroughly inspect products   and identify any issues before it reaches the hands of the customers. 

  1. Improve your packaging

Proper packaging is essential to protect your products from damage during transit. So invest in high-quality packaging materials that are appropriate for the type of products being shipped. Also, ensure that products are packaged securely without leaving too much space in between to minimize the risk of damage due to movement.

  1. Offer Excellent Customer Service

Prompt and responsive customer service can help address customer concerns related to products, which will reduce the need for returns. You can provide multiple channels for customer inquiries, such as live chat, email, or phone. You can also leverage technology to provide personalized product recommendations based on customers’ preferences and past purchase history. It will help customers choose the right product for their needs and reduce the likelihood of returns. Also, provide clear usage instructions so that customers use the product the right way, reducing dissatisfaction. 

  1. Analyze Return Data

Continuously analyze return data so you will get valuable insights into return patterns or trends, identifying areas for improvement. Focus mainly on return reasons, product categories with high Return Rates, and common issues faced by customers. This will help you take corrective measures before they start affecting your reputation. 

E-commerce Returns Best Practices To Follow 

By implementing certain best practices, you can effectively address various challenges related to returns, leading to streamlined operations. Here are four such best practices – 

Offer brick-and-mortar returns

Did you know that around 62% of customers are more likely to shop online if they can return an item in-store? So if you own a brick-and-mortar store along with your E-commerce business, offer customers the option to return products in-store. This will be a convenient and hassle-free solution for customers who prefer to return products in person rather than dealing with the hassle of return shipping and repackaging. This strategy can also turn a return into an exchange or an upsell opportunity when the customer sees other products in the store.

Take customer feedback on the reason for the return 

When you understand the reasons behind product returns, you will be able to address the root causes and implement preventive measures. This is possible only if you encourage customers to provide feedback on the reason for their return. You can use channels like online surveys, email follow-ups, or service calls to collect feedback. 

Use returns management software to assist with exchanges

By using returns management software, you can streamline the entire returns process, making it seamless both for your team and your customers. Returns management software can also facilitate exchanges and allow customers to request a replacement or an alternative product easily. This will reduce the need for a return altogether and reduce revenue losses. 

Partner with a 3rd party logistics company experienced in reverse logistics 

3PLs experienced in handling E-commerce returns can efficiently manage the entire returns process, letting you focus on other critical aspects of the business. They can take care of everything from receiving returned items to inspecting, restocking, or disposing of products. You will save time, effort, and resources while ensuring that returns are handled in a timely and professional manner.

As warehousing and order fulfillment partner for E-commerce brands in India, we offer extensive support for reverse logistics. With years of hands-on experience, we fully comprehend the intricate complexities and challenges associated with handling returns. We receive, re-label and pack products with better QC standards and handle refurbishment across different categories. 

To know more about ANS Commerce, book a demo now

How Return to Origin (RTO) Is Impacting Profitability of E-commerce Businesses

E-commerce is the new normal for buyers and sellers, with countless businesses diving in amid the pandemic. Even major brick-and-mortar brands joined the bandwagon. While they did it as a survival response in the first place, the decision emerged as a game-changer for all the brands. 

Most businesses want to continue with it for the long haul. And statistics show that growth is imperative. E-commerce sales are projected to grow 10.4% in 2023, and the market size is expected to reach a whopping $6.3 trillion this year. That spells a huge opportunity for retail and D2C brands.

While everything about the industry sounds great, it has a fair share of challenges as well. Of course, competition is the one player, one needs to worry about the most. But that’s only the tip of the iceberg because there are a lot more things to stress about. 

Returns are one of them- in fact, Return to Origin (RTO) is a major headache as it can seriously eat into a seller’s profits. Research shows that E-commerce businesses lose over $400 billion in sales every year due to product returns. Nonetheless, having a strategy to deal with RTO can help business owners survive and thrive in the unpredictable landscape. 

Let us share a comprehensive guide on return to origin in E-commerce, its potential impact on businesses, and a strategic approach to get through. 

What is Return to Origin (RTO)

RTO, or Return to Origin, is a term used in E-commerce to describe the return of a package to the seller when it cannot be delivered to the customer for any reason. This can occur if the delivery attempt fails or if the customer refuses to accept the package. As a result, the package is marked as RTO and sent back to the seller.

Unfortunately, sellers must bear the cost of both forward and reverse logistics in such cases, which can be a significant financial burden. In fact, returns and exchanges can account for up to 50% of an E-commerce retailer’s revenue.

How to calculate RTO?

To calculate the RTO for your business, use the RTO rate formula below:

RTO rate = (Orders not delivered + Orders cancelled before delivery) / Total number of orders

The RTO rate represents the percentage of orders that were not successfully delivered. This is an essential metric to track as it indicates the efficiency of your shipping process. A lower RTO rate is desirable as it implies that products can be shipped faster and more reliably.

How RTO impacts business profitability despite high order volume? 

Research indicates that returns make up a daunting 30%+ of E-commerce shipping. It means a seller can expect one-fifth of their D2C orders to return. Even worse, it can affect a business’s bottom line due to the cost associated with shipping and managing inventory. Here are some potential pain points caused by the return to origin-

  1. Cost of forward and reverse logistics

The most evident reason to worry is the cost of forward and reverse logistics. The seller ends up paying for shipping the item initially (if they offer free shipping) and repeating it when it gets shipped back to them. That’s double the sum. They also pay operational costs in order processing, such as the cost of packaging, quality testing, and labor. These can add up to a significant sum that is enough to erode the profit margins. 

  1. Cost of managing damaged products

Some products returned by customers may be damaged or in a condition that makes them unsellable. In such cases, E-commerce companies have to bear the cost of managing these products, which may include repairing or disposing of them.

  1. Cost of repackaging and quality checks

When the seller gets another order for a return to origin product, they have to repeat the entire order processing schedule, from repackaging to quality checks and getting in touch with logistics. 

  1. Cost of blocked inventory

When a product is returned, it takes up space in the warehouse, blocking inventory that could have been sold. This space comes at a cost, as the E-commerce company has to pay for warehousing storage.

  1. Loss of marketplace commission

The loss compounds if one sells through marketplace. Depending on the marketplace a seller collaborates with, they may not get a refund for sales commission even if the order does not get through. On top of that, most marketplaces charge an additional fee for a return to origin. 

When these costs are added up, they can have a massive impact on the business’s profitability. And it worsens because of the sheer number of RTOs they encounter. Consider how much you can lose when one in five orders returns to the origin. 

What are the top reasons for Return to origin?

Return to origin in E-commerce is a part of the deal for D2C sellers because several reasons may lead to a return to origin. But it is vital to identify them so that you can reduce the possibility and implications of E-commerce returns. Here are the reasons for RTO:

  1. Incorrect user information

When a customer adds inaccurate information such as an incorrect address, phone number, and email, they are eventually set up for a return to origin situation. If the delivery person tries to reach such customers, they are unreachable. There is no option other than returning the product to the warehouse and marking the customer as an invalid user. Besides incorrect details, ambiguous information and spelling errors may also cause problems. Missing out on zip codes is one of the common instances. As a seller, verifying and confirming customer information before shipping the package is important to avoid any errors and reduce the risk of RTO. 

  1. Unavailability of customers

Another common reason for E-commerce product return is the unavailability of a customer to receive it. The logistics partner usually makes multiple delivery attempts before marking it for return-to-origin. Keeping customers in the loop by sending real-time tracking information or giving them a phone call before delivery can prevent RTO due to the non-availability of customers. 

  1. Lack of customer intent

Surprisingly, a buyer who orders a product online may end up rejecting or returning it because of a lack of intent. The reasons may vary, from a change of mind at the last moment, getting the same item at a lower price or earlier from another seller, not requiring the product any more, and more. Whatever the reason, a seller cannot force them to accept the order, even if it sounds right. 

  1. Delivery of damaged or wrong products 

Delivery of damaged or wrong products is another reason for return to origin. Damaged items can result from mishandling during shipping, while wrong products may be due to errors in order fulfillment. When customers receive damaged or incorrect products, they may return the item rather than keep it. If this happens, check with customers if they would like an exchange or store credits for the return. 

  1. COD payment is not ready

At times, the reason for RTO could be as simple as the recipient not having the cash payment to honor a COD order. They will probably ask the delivery person to ship it back to the seller. 

Another reason COD orders are prone to RTO is that customers may change their minds or have second thoughts about their purchase while waiting for the order to arrive. Since they have yet to pay for the item, it may be easier for them to cancel the order or return it. 

E-commerce merchants need to be aware of these risks and possibilities and take proactive measures to address them. Fortunately, it is possible to address most of them and protect the business and profits in the long run. 

Ways to reduce the return to the origin

While retailers cannot curb return to origin altogether, there are ways to minimize them. We have a list of actionable measures to limit returns at all stages of the conversion funnel. Here are some ways you can use to reduce RTO: 

During pre-sales

D2C business owners can start with an RTO-minimization strategy as early as the pre-sales stage when it comes to managing returns. Here are the steps you  can take: 

Improve product quality

Poor product quality is detrimental for retail and D2C players, specifically in a competitive E-commerce landscape. Even if customers place orders, they will likely return them eventually if there are quality issues like incorrect sizing. Therefore, sellers need to analyze the potential causes of a high Return to Origin rate of specific products and work on improving them. One of the actions that they can take is size standardization, which can help reduce RTO drastically, besides bolstering their reputation in the long run.

Go the extra mile with product showcasing

Product showcasing is a key challenge for E-commerce sellers. It is unrealistic to expect buyers to click on a whim when they cannot see, feel, and experience the offering. But going the extra mile with showcasing does help. Providing detailed information about products can help customers make informed purchase decisions. Include product descriptions, specifications, and high-quality images and videos to give customers a clear idea of what they are buying.

Offer surprise gifts and freebies

Adding freebies, discount coupons, and gifts to an order is a surefire way to reduce the chance of returns. Plus, one gets loyal customers willing to stay and recommend the brand by word of mouth. That’s a win-win! 

Incentivize pre-paid orders

COD is one of the primary drivers leading to return to origin. After all, it seems much safer to return an order when one hasn’t paid for it. As a seller, one can address the risk by incentivizing customers with cashback or discounts for pre-paid orders. It is possible to dissuade them from choosing the COD payment method by asking for a small fee. 

Relook at return policy clause

It’s no secret that many E-commerce companies offer friendly return policies, which allow shoppers to buy items, try them out, and return them if they don’t meet their expectations. While such policies can undoubtedly increase conversions, they can also lead to an uptick in returns. To prevent customers from exploiting loopholes, it’s crucial to ensure your return policy is ironclad.

Reevaluate your E-commerce return policy to clearly include these aspects: 

  • The time frame for returns
  • Acceptable reasons for returns
  • The condition of the product upon return
  • The refund or exchange process, and 
  • Any associated fees or shipping costs. 

By taking these factors into account, you can help ensure that your return policy benefits both your customers and your business.

During order processing

Besides acting early, sellers can also lower the return to origin risk during the order processing stage. Here are a few steps to implement in this context:

Keep a close eye on high-risk orders

Not all E-commerce orders are the same. Some are at high risk of return to origin, so sellers must keep an eye on them. Risk management should be an integral part of order fulfillment operations. Checking the customer’s past purchase history is a viable way to confirm whether they return the ordered products. A seller needs to worry if they are notorious for returning COD orders. The best bet is to re-confirm the order via call, email, or IVR before shipping it. 

Use technology and verify shoppers’ information

The inability to locate the delivery address of customers is one of the most common reasons for a return to origin. Incomplete/invalid/non-deliverable addresses can be problematic. Fortunately, it is possible to resolve the issue by leveraging technology. There are software tools to ensure that an address has been keyed in correctly and completely. They even give an apt error message to prompt the buyer to complete the address. 

In addition to software tools that verify and complete addresses, E-commerce merchants can also leverage faster checkout and RTO reduction automation tools to reduce return rates. Additionally, using AI-powered predictive platforms can help identify potential defaulters at the onset, reducing the likelihood of returns. 

Partner with a reliable 3PL service provider

3PL collaboration can be a game-changer for an E-commerce business as these providers help with the entire shipment process, including picking, packing, and shipping. Their expertise in managing the shipment process ensures that orders are shipped to the correct destination on time. This reduces the chances of products being returned due to incorrect or delayed deliveries. 

They also take care of the returns, so partnering with a reliable one can minimize the return to origin-related hassles.

Provide fast shipping

Fast shipping and delivery experience is another measure to reduce the chances of returns. Online shoppers are impatient lot, so they end up buying a product from a brick-and-mortar store if the delivery date sounds too distant. In such cases, returning the product is the obvious repercussion. Brands can address the possibility by providing super-fast delivery services to minimize waiting time and frustration. 


A proactive approach to return to origin minimization also includes the post-sales phase. D2C sellers cannot afford to get complacent at any stage when it comes to E-commerce sales. These measures are effective for dealing with the risk of E-commerce returns post-sales:

Focus on NDR management

Non-delivery reports (NDR) offer visibility into the order journey and the potential reasons for returns. They are critical for sellers looking to resolve and limit the return to origin rates for the long haul. For example, if a seller can see the delivery person citing customer unavailability as the cause of non-delivery, they should contact the customer to confirm their availability and ensure delivery.  Focusing on NDR management can take the E-commerce game a notch higher.

Collect customer feedback

Listening to the customers is the key to success for a business. Customer feedback offers insights into what’s working for business and what needs to be improved. Including it in the post-sales process can help a business owner to get actionable insights into their product and logistics customer service. They should also implement measures to improve things to avoid a return to origin for future orders. Acting on customer feedback does more than resolve the issue, but also strengthens the relationship with buyers and boosts retention. 

Don’t let return reduce your profit margins

In conclusion, it is important to consider the impact of returns on their profit margins. While returns are inevitable, they can eat into profits if not managed properly. Implementing a well-designed return policy, tracking returns data and analyzing it can help businesses reduce the cost of returns and increase their overall profitability.

ANS commerce, a leading full-stack E-commerce service provider, offers a suite of services and tools to help you manage your E-commerce returns effectively. With ANS commerce, you can gain insights into return patterns, and implement strategies to minimize the cost of returns. Our streamlined return process and data-driven approach to order fulfillment can help you increase your profitability and achieve sustainable growth in the competitive E-commerce landscape. With the help of our expert team, you can focus on growing your sales and expanding your customer base while leaving the management of returns to us. 

To know more about how ANS Commerce can help you, Book a free consultation with our E-commerce experts today!

How To Write Best-in-Class E-commerce Return Policy For Your Store

With the increasing popularity of online shopping, competition amongst E-commerce businesses has become more intense, as customers have endless options to choose from. While offering unique products is important for gaining customers, a clear and customer-friendly E-commerce return policy plays an equally crucial role. 

According to reports, customers are three times more likely to NEVER purchase from a company, if they are unsatisfied with the return policy. Therefore, drafting a well-crafted return policy becomes even more important to improve customer satisfaction, boost sales, and establish trust.

However, creating a best-in-class E-commerce return policy can be a challenging task that requires careful consideration of various factors such as product types, logistics, and budget.

In this blog, we’ll explore the key elements of a successful E-commerce return policy and discuss about tips for creating a policy that meets both the customer’s and the business’s needs. 

But before delving into those details, let’s first understand the meaning and importance of an E-commerce return policy.

What Is An E-commerce Return Policy?

An E-commerce return policy is a document that outlines the process and requirements for accepting returns from customers. This policy serves two important purposes:

Firstly, from a business perspective, it helps to protect against inappropriate returns and financial loss caused by credit card chargebacks.

Secondly, from a customer perspective, it provides information on the merchandise that can be returned, the reason for return, the time frame for returns, and the process for initiating a return. By understanding these details, customers can make informed purchase decisions and have confidence in the reliability of the business.

Here is an example of a return policy from Flipkart.

Return policy example from Flipkart

This comprehensive return policy provides customers with information about the return process, including the timeframe for returns and processing times. Additionally, it goes a step further by outlining common scenarios that may occur, helping customers understand whether a product is eligible for return or not.

Why Is An E-commerce Return Policy Important?

Are you wondering why you need an E-commerce return policy? Here are some points that will convince you.

Instills a feeling of security

In the world of online shopping, customers seek security in their purchases. They expect E-commerce businesses to offer a certain return timeframe, which not only indicates confidence in the product but also provides a safety net in case of any issues. This helps customers feel secure in their purchasing decisions and enhances their overall shopping experience.

Creates clarity

A well-crafted E-commerce return policy can save you the hassle of communicating return expectations to each customer individually. Customers know exactly what to expect and can initiate the process easily when the policy has clearly outlined the items eligible for returns and the corresponding timeframe. This not only improves customer satisfaction but also saves time, as you don’t have to answer repetitive return queries from customers.

Grows retention rates

Research shows that 92% of customers buy again from the same E-commerce company if the return process is hassle-free. You can create a positive shopping experience for customers, and encourage them to return to their store in the future by making the return process easy. This not only promotes customer loyalty but also helps increase your revenue by driving repeat sales.

Improves trust

Unlike in-store customers who can physically touch and examine products, online customers rely solely on product descriptions and images. It may not provide a comprehensive understanding of the product’s features and quality. As a result, customers may be dissatisfied with their purchase once it arrives at their doorstep. However, a well-crafted return policy that offers customers the option to return or exchange the product can help you with repeat sales and long-term customer relationships.

A well-crafted E-commerce return policy can help your business meet customer expectations and facilitate the purchasing decision process. 

You can remove the hassle associated with product returns by providing clear guidelines for returns and exchanges—establishing your business as a customer-centric organization. 

An E-commerce return policy can ultimately help businesses stand out in the competitive market and attract and retain customers in the long term.

Now, let’s get down to writing a great E-commerce return policy. 

What To Include In Your Return And Refund Policy

To ensure customers understand the boundaries surrounding returns, an elaborate E-commerce return policy must cover specific key points. These include the types of returns that will be accepted by the business and the refund process that will be followed. By clearly communicating these details, businesses can minimize confusion and dissatisfaction among customers, and establish a clear protocol for handling returns.

Here are a few points that should be included in your E-commerce return and refund policy:

Identify the items eligible for return

It is essential to identify which products are eligible for returns and which are not, especially if you sell perishable goods that may not be suitable for resale once they are returned. 

It is important to clearly state the types of items that are eligible for return or exchange in your E-commerce return policy to avoid confusion and manage customer expectations. By doing so, you can ensure that customers know exactly what they can and cannot return, which can reduce frustration and improve customer satisfaction.

Determine a clear timeframe for accepting returns

It’s crucial to define a specific time frame for returns in your E-commerce return policy, as customers need to know how long they have to initiate a return. The duration can vary widely, ranging from a week to a year or even longer, depending on the business’s policies. However, the standard timeframe for many businesses is 30 days, which is also the expectation of most customers.

If you fail to disclose a timeframe, you can have customers requesting returns even after years of the purchase. Yes, we are not joking. To avoid this scenario, it’s important to have clear and stricter rules in place to protect your business against open-ended return periods.

Describe the acceptable condition of the returned products to be accepted

It is crucial for an E-commerce return policy to clearly outline the condition in which a product must be returned for it to be processed. This includes detailing requirements such as original packaging, attached tags, and unworn clothing. It is equally important to state that returns that do not meet these requirements will not be accepted.

Failing to specify acceptable return conditions in your policy may result in customers returning products in poor condition, making it impossible for you to resell them and causing financial loss to your business. Therefore, a clear and concise outline of acceptable return conditions in your E-commerce return policy is essential.

Choose in-store credit or a refund

When customers initiate a return, they want to know how they will receive compensation for their purchase. Typically, there are two options for an E-commerce refund policy: in-store credit or a full refund. While some customers may prefer in-store credit, others will demand a full refund. Ultimately, the decision on what type of compensation to offer falls on the business. But it needs to be mentioned clearly in your E-commerce return policy. 

We recommend offering a full refund if the returned item meets all the requirements. Some E-commerce companies give customers the choice between two options. However, if you choose to only offer an in-store credit, it can be used to enhance your return process if done strategically. But be aware that this approach may lead to dissatisfaction among some customers.

Disclose any fees associated with returns

Your E-commerce return policy should specify who is responsible for the shipping, restocking, and other fees associated with returning a product. It is important to be transparent about this information to avoid any confusion or frustration on the part of the customer.

If you expect the customer to bear these costs, make sure to clearly state this in your return policy. Customers can become disgruntled if they are not aware of these fees ahead of time, so it is important to be upfront about them.

E-commerce Return Policy Template

You’re now equipped with all the necessary information and guidelines needed to create an effective E-commerce return policy. However, it can still be challenging to write a policy from scratch. Here’s a free E-commerce return policy template that you can use. This policy template is designed to cover all the essential elements needed to be included in an E-commerce return policy. 

Just simply replace the text with your policy or use it as a guideline to create a policy from scratch tailored to your business needs.

Sample Ecommerce Return Policy Template 

We hope that this E-commerce return policy example not only helps you create an effective policy in a short span of time but also sets you apart from your competitors. Remember, a clear and customer-friendly policy goes a long way in building trust with your customers, eventually increasing sales and revenue for your business.

E-commerce Returns: Best Practices To Follow

You followed all the tips and tricks mentioned above and created a customer-friendly E-commerce return policy, but your return workload is still high. Now what do you do?

Here are some best practices you can follow in your E-commerce returns to ensure a hassle-free process. 

  1. Your E-commerce returns policy should be easy to find

The importance of making your E-commerce return policy visible to customers cannot be overstated. It is crucial for the success of your return process. 

To achieve this, ensure that your return policy is prominently featured on the homepage of your website. The footer section is a popular spot for this. You can also consider including it in other areas such as the checkout page, FAQ pages, and product pages.

Another effective way to make your E-commerce return policy visible is by printing a copy and including it with every shipped product. Additionally, you can attach it or send a link in order confirmation emails sent to your customers after a purchase is made.

  1. Create concise steps for the buyer to follow

To prevent confusion among your customers, the policy should provide clear and concise instructions on the return process. You can create a dedicated section on your website or app for the return process, or you can direct customers to contact your helpline number for assistance.

Regardless of the method chosen, the guide should include all steps involved in returning the product, such as how to pack, label, and ship the items back to your store.

  1. Make return labels easy to print

Making return labels easy to print is an important aspect of a customer-friendly E-commerce return policy. Customers should be able to easily access and print their return labels without any technical difficulties. 

Providing a clear and simple set of instructions on how to print the labels can save customers’ time and frustration, and can also streamline the return process for businesses. Additionally, including the return label in the original packaging or sending it via email can make it even easier for customers to print and use.

  1. Understand the laws governing returns

The laws that govern returns can vary from one country to the other. 

In India, E-commerce companies are obligated to inform their customers about their refund and return policies once they have made a purchase. They are also legally required to accept returns of faulty or incorrectly advertised goods.

But in the United States, there is no legal requirement for a return policy. However, some states in the country require you to disclose it in the checkout process. 

On the other hand, there are other countries that legally require E-commerce companies to refund, repair or exchange faulty products. Customers in the European Union have the right to return the product within 14 days and receive a full refund. 

Therefore, you need to identify the regulations that work in your country of operation and comply with them. 

  1. Use chatbots to handle your returns

Integrating chatbots into your E-commerce return process can greatly enhance its efficiency. Simply add them to your website and they will make your process seamless.

With chatbots readily available on your website, customers can easily provide return details and receive guidance throughout the process. This not only ensures customer satisfaction but also saves you time and effort in handling each return individually.

  1. Keep your return policy simple

Ensure your E-commerce return policy is crafted using clear and concise language, which states rules that are easy to understand for each and every customer. Do not leave your return conditions open to interpretation.

Put every detail down correctly and make sure your customers can understand the rules and process of your returns. You can also seek feedback from other people before publishing your return policy online for your customers. 

Where Can You Display Your Return Policy?

After crafting a well-defined E-commerce return and exchange policy, the next crucial step is to ensure that your customers can easily access and view the policy before making a purchase.

Displaying your policy prominently can set expectations and minimize the number of dissatisfied customers. While it’s impossible to please everyone, making your policy visible can go a long way in reducing the number of returns and exchanges.

To make your policy easily accessible, include links to it in the following places:

  • Your website footer
  • Your FAQ page under the returns section
  • Your product pages
  • Cart and checkout pages
  • Order confirmation email
  • Your wish list pages

Ensure that customers are aware of your return and exchange policy before they purchase by placing links to your policy in these key locations. 

Are Return And Refund Policies Legally Required?

The legality of an E-commerce return and refund policy can vary based on the country in which your business operates.

According to the Consumer Protection Act of 2019 in India, E-commerce companies are obligated to inform their customers about their refund and return policies once they have made a purchase. They are also legally required to accept returns of faulty or incorrectly advertised goods. Customers are entitled to return semi-durable and durable products within 15 days of purchase, provided they are in their original packaging and have not undergone any changes in shape or size.

In the United States, there is no legal requirement for an E-commerce return policy, but it is important to clearly state on your website whether or not you have one. Some states may also require you to disclose this information during the checkout process.

In the European Union, sellers are required to offer repair, replacement, or refund options for faulty products. In the United Kingdom, traders must offer a full refund for faulty, damaged, or misrepresented products. And in Australia, customers have the right to repair, refund, or replace products under the Australian Consumer Law.

Therefore, it is important to research the legal requirements for an E-commerce return policy in your country of operation and comply with all applicable regulations.

Final Words

Whether you’re starting a new online store or looking to improve an existing E-commerce return policy, the above guide will help you create a policy that sets your business apart from the competition.

ANS Commerce is here to help with the digital process. As a full-stack E-commerce enabler, we offer top-notch solutions and services to online businesses. Our team of experienced professionals can assist you from start to finish, helping you achieve your goals and boost your sales and revenue. Whether you’re launching a new online store or seeking to enhance your existing E-commerce business, ANS Commerce has the expertise and resources to help you succeed in the digital marketplace.

To know more about how ANS Commerce can help you, Book a free consultation with our E-commerce experts today!

O2O Commerce: Evolution Of Retail Business

Imagine a scenario: your customer is scrolling through your E-commerce website, adding items to their cart, and getting excited about their upcoming purchase. But then, they start to second-guess their choices. What if the product doesn’t fit? What if the color is different than what they had envisioned? Suddenly, the convenience of online shopping starts to lose its allure. 

This is where online-to-offline (O2O) commerce steps in – a strategy that seamlessly blends the convenience of online shopping with the ‘touch-n-feel’ experience of in-store shopping. By embracing O2O commerce strategies, businesses can eliminate the uncertainties of E-commerce, drive retail sales and build customer loyalty in a quick span. In this blog, we’ll dive into the world of online-to-offline commerce and understand how it will revolutionize the way customers are going to shop in the coming days.

What Is Online-To-Offline (O2O) Commerce?

Online-to-offline commerce refers to a modern business strategy where you attract potential customers from online channels to your physical store in order to complete a purchase. In O2O Commerce, online shoppers get the best of both worlds (online and offline) via capabilities such as try & buy, in-store pickup, and home delivery.

The major goals of O2O commerce include: 

  • To ensure that your online and offline channels complement and not compete with one another 
  • To build better brand awareness across channels
  • To gather valuable customer data that can be used to improve marketing efforts and enhance customer experience

How Does O2O Commerce Work?

O2O commerce starts with online engagement, where customers search for products online, check their availability, and compare prices across different platforms. Then customers either place the order online and choose to pick up the product at a store or book an appointment online to personally visit the store and try the product before purchasing it. Either way, your online customers get the opportunity to physically experience the products before using them. 

Customers also get personalized service from the staff and a chance to clear all their doubts and apprehensions about the product. Additionally, some e-commerce brands also deliver products to the doorsteps of the customers, thereby boosting convenience even further.

How does O2O commerce works

O2O commerce business model benefits

Let’s explore some of the key benefits of the O2O E-commerce business model and understand why it has become so popular in recent years.

Reach more customers

By having an online presence, you attract one set of customers who prefer the convenience of E-commerce. At the same time, by creating an opportunity to complete the purchase from a brick-and-mortar store, you also pull those audiences who love to engage in a physical purchasing process that online shopping can’t provide. This automatically multiplies your reach and drives both online and offline sales. 

Pro Tip: In case you already have a strong web presence, motivate your consumers to shop in your brick-and-mortar stores by offering special in-store discounts and conducting events. 

Reduce shipping & logistic cost

In O2O, you offer your customers an option to research online and buy in-store, which eliminates the need for shipping. This reduces not only the cost of logistics, returns but also the risk of lost or damaged packages. Apart from this, you can use your physical stores as mini fulfillment centers, allowing you to use your existing infrastructure to fulfill your regular online orders. This can reduce the cost of warehousing.

Give shoppers what they want – the store experience

Despite the convenience of online shopping, many customers still value the store experience. In a store, you can provide a brand specific personalized shopping experience that enables customers to touch, feel, and try products before making a purchase. This is particularly important for products that require a more tactile experience, such as clothing, shoes, or home furnishings.

The O2O model also allows customers to get their products right away, which creates instant gratification in their minds. With online shopping, there is always a delay between the time a customer places an order and when they receive their product.

O2O commerce strategies retailers can implement

As the competition in E-commerce is heating up, retailers must adopt innovative strategies to stay ahead of the curve. Here are some effective O2O commerce strategies that you can implement to stay ahead of the competition

BOPIS (Buy Online, Pick-up In-Store)

By implementing BOPIS, you enable your customers to buy products online and pick them up at a nearby physical store. This is beneficial for both parties. Customers enjoy the flexibility to choose when and where to receive their products. They can select a store location and a convenient pick-up time that fits their schedule. For retailers, this strategy creates an opportunity to upsell customers on additional products when they visit the store to pick up their purchases.

However, you must provide clear information on your website about which products are available for in-store pick-up, as well as the time frame for pick-up. To make the process even smoother, you can offer a designated pick-up area in-store or even provide a curbside pick-up option.

Offer Appointment Booking

Allow customers to book a time to come into the store to browse products or receive expert advice from a sales associate. It provides customers with a convenient way to schedule their visit to the store, eliminating the need to wait in long lines or deal with crowded stores. This can be particularly appealing to those customers who have busy schedules and want to avoid wasting time waiting for assistance or finding the product they need. 

You can successfully implement this strategy by providing an online booking system on your e-commerce website. It is also important that you send confirmation emails or text messages with details about customer appointments.

Try & Buy/Home Delivery

In this, you allow customers to place the order online, try the products once they are home delivered, keep the products that they like, and return the rest to get a refund. Brands like Firstcry and Myntra use this strategy to drive growth.

Alternatively, you can let customers first research online, visit the physical store to try the product, and finally have their purchases delivered to their homes. This strategy can be particularly useful for those customers looking to purchase products that cannot be transported easily. Brands like Pepperfry, the furniture retailer, use this strategy.

In case you are providing the home delivery service, be upfront about the delivery fees and timelines and ensure that you have the terms clearly mentioned in your shipping policy.  You should also consider partnering with third-party delivery services or investing in your own delivery fleet to ensure that deliveries are made on time and in a professional manner.

In-store returns & exchange

This allows customers to return or exchange products they purchased online at a retail store location. This can be attractive to those customers who prefer the convenience of shopping online but want the reassurance of being able to return or exchange products in person. This eliminates the hassle and uncertainty of shipping items back to the retailer.

For retailers, this is a great way to increase foot traffic to their physical stores and create opportunities to engage with customers in person. By having customers come into the store to return or exchange products, retailers have an opportunity to offer personalized recommendations, suggest alternative products, and create a positive and engaging shopping experience.

Pop-up stores

Pop-up stores are temporary retail locations that are typically set up for a short period of time, often a few days or weeks. They are a great way to bridge the gap between your online and offline presence. Since they can be set up instantly with minimal effort, multiple pop-up stores can be installed, preferably closer to customer locations. You can showcase products and give an opportunity for the customers to try out the product in person without having to travel a lot. You can use the pop-up stores to collect valuable customer data and insights, which can be used to tailor future product development and marketing strategies. 

Invest in local SEO

Investing in local SEO can help retailers reach customers in their local area. By optimizing your website and online presence for local search, you can improve your visibility on search engines like Google and attract more foot traffic to your physical stores. You can also leverage local search platforms such as Google My Business to increase visibility and attract new customers. By creating a detailed and accurate profile on this platform and regularly updating it with relevant information such as store hours, contact information, and reviews, you can improve your local presence and attract relevant customers to your physical customers.

Examples of O2O Commerce Implementation 

Here are some examples of brands that have embraced O2O Commerce in recent years – 


Screenshot of Lenskart website

Lenskart, the popular eyewear brand, has a strong presence in both online and offline spaces. It is one of the early adopters of the O2O Commerce model. Besides letting customers place an order online, it also lets them try the eyewear at the nearest store by booking an appointment. The brand even offers various freebies and free services for all the customers who visit their physical store. Once the product is ready, customers will receive it at their doorstep. 

Online-to-offline strategies they used: 

  1. Try & Buy
  2. Offer Appointment Booking
  3. Home Delivery
  4. In-store returns and exchanges
  5. Invest in local SEO


Screenshot of Manyavar website

This Indian wedding wear and ethnic wear brand has also adopted the O2O model. On every product’s detail page, customers have the option to book an appointment to visit a physical store in person and try the selected product. This is a great strategy for a brand that sells clothes for special occasions, as every purchase has to be perfect in terms of fitting and appearance.

Online-to-offline strategies they used: 

  1. Try & Buy
  2. Offer Appointment Booking
  3. Invest in local SEO


Screenshot of Croma website

Croma is a retail chain that sells consumer electronics and home appliances. It operates both offline stores and an e-commerce website that offers a wide range of products. Croma offers an option for its customers to pick up their orders from a nearby store at a convenient date and time. This option is given at the time of checkout. Alternatively, customers have the option to book an appointment to visit the store to experience the product first-hand after researching it online. 

Online-to-offline strategies they used: 

  1. BOPIS
  2. Invest in local SEO


Screenshot of Bluestone website

This jewelry brand has also taken the O2O route to attract website visitors to its store. Bluestone offers multiple options to complete a purchase. You can either buy it online, visit the nearest store where the product is available, or book a home trial. On the product details page, the brand clearly highlights the different stores where the chosen product is available so that customers can visit, try the product, and complete the purchase. 

Online-to-offline strategies they used: 

  1. Try & Buy
  2. Home Delivery


O2O commerce offers a great opportunity for e-commerce brands to reach more customers, improve customer experience, and boost both offline and online sales. Although there are some challenges that come with implementing an O2O model, partnering with the right E-commerce service provider can make it a lot easier to overcome these obstacles. And that’s where ANS Commerce comes in. 

We are an e-commerce expert who takes care of the entire life-cycle of your e-commerce store. We have several specialists in-house who can help you plan, strategize, and implement the online-to-offline commerce model in your business. To talk to our O2O specialists, book a demo now. 

A Comprehensive Guide On Creating Shipping Policy For Your E-commerce Business

It doesn’t matter what you sell; the only way to achieve long-term growth in your e-commerce business is by gaining the trust of your customers. And the easiest way to build credibility in their minds is by providing a comprehensive shipping policy. 

Think of it as an essential part of your overall shipping strategy. You can set customer expectations and ensure a positive shopping experience by providing a detailed shipping information page on your website. If you want to revamp your existing shipping policy or create one from scratch, we have collated all the essential information you need to get started. Read along!

P.S.: Don’t want to face the hassle of creating the policy from scratch? Get the free shipping policy template right away. 

What is a shipping policy?

A shipping policy is a detailed document or webpage highlighting an E-commerce company’s rules and procedures when delivering products to its customers. It covers essential information such as shipping rates, shipping times, shipping carriers, returns & refunds, packaging methods, etc., with utmost clarity. Shipping policies help set expectations for shoppers, ensure consistency and transparency in shipping practices, and protect the business from liability issues.

Why does your E-commerce business need a shipping policy?

A well-designed shipping policy positively impacts the customer experience and reduces returns. Here is how it achieves that – 

Prevents misunderstandings regarding shipping costs

By including precise details about the shipping process, a shipping policy eliminates the possibility of any delivery-related confusion, misunderstandings, and last-minute surprises. More importantly, customers will understand their final shipping fees before their purchase. This means they will be less likely to abandon their carts, a plaguing issue faced by most e-commerce sellers today.

Recommended read: 17 Best Abandoned Cart Email Examples With Key Takeaways

Keeps customers informed about the delivery time

A shipping policy lets customers stay informed about their orders by offering details on expected delivery schedules and tracking options. This way, customers can anticipate the arrival of their packages, prepare for possible delays, and have an idea of the maximum wait time if such delays occur.

Sets expectations for refunds, returns, and exchanges

A comprehensive shipping policy outlines the process of initiating refunds, returns, and exchanges. For instance, it could cover details such as the conditions under which customers are eligible for refunds, the processing time for return or exchange, any fees associated with the process, etc. 

Provide legal protection to your business

A clear and well-written shipping policy can protect your E-commerce business in case of legal disputes. For instance, by setting out the terms and conditions of shipping, you can defend your business against customer complaints. Also, by highlighting the conditions under which a refund is valid, you prevent the abuse of the returns policy. 

5 Things to include in your shipping policy

While a shipping policy can include numerous components, there are a few important ones that should not be missed. Including them will ensure that your customers clearly understand your shipping process. Here are five such components that should be part of your shipping policy –

Shipping rates & cost

Provide your customers with a clear understanding of the shipping costs associated with their orders. Make sure to outline any flat fees, weight-based fees, or other charges that may apply, as well as any minimum order requirements for free shipping. It’s important to be transparent about your shipping rates and to make sure that they are fair and reasonable. 

Shipping mode and delivery time

Highlight the different shipping modes available to customers, including the estimated delivery time and associated charges. This will help customers make an informed decision based on their urgency in receiving the product. Again, provide accurate delivery details and be upfront about any factors that may affect delivery times, such as weather or holidays.

Restriction on shipping (if applicable)

If you have geographic restrictions on shipping to certain countries or regions, specify that clearly so that customers are not disappointed at the time of order placement. 

International shipping

If you offer international shipping, your shipping policy should highlight the additional costs and fees associated with international orders, such as import duties and taxes. You should also include a statement on who is responsible for these additional fees. Also, have the estimated delivery times and any restrictions for international shipments communicated in your shipping policy. 

Missing or lost packages policy

Even though you are not responsible for packages getting lost (in most cases), it is your responsibility to guide the customers when something like that happens. Include the contact information of the department and steps customers can take to report a missing package and file a claim. 

Shipping policy page examples you can learn from

It’s always good to look at some real-life shipping policy examples before you are ready to draft your own.  Here are three ecommerce brands that have nailed their shipping policy – 

Plum Cosmetics

Plum Cosmetics Shipping Policy Example

What did we like about this shipping policy?

The entire shipping policy has been formatted as FAQs, with all the answers compressed by default. It has made the shipping policy skimmable. Also, you can find the answer to your specific query instantly without having to go through the entire shipping page. They have also clearly segregated the shipping policy into three buckets: Shipping, Returns, and Cancellations – making it even more reader-friendly. 

Farida Gupta

Shipping Policy Example by Farida Gupta

What did we like about this shipping policy?

They have elaborately highlighted every possible element of their shipping process, from what they do to expedite your order in case of delays to whom you should contact in case of damaged products. They have also used screenshots and images to make it easily understandable to the readers. They also have a search bar on the page for users to check if delivery is available in their location. 


Shipping Policy Example

What did we like about this shipping policy?

Since they ship both within India and to other countries, they have covered the shipping processes involved in both these categories separately. They have also clearly pointed out who is responsible for paying the import taxes or duties for their orders. The brand has also mentioned the countries that they currently ship to. 

Use this free shipping policy template

Here is a downloadable shipping policy template for your online store. Edit, modify, and use them as per your needs. The section marked in blue is meant to provide guidance on how to approach the template. You can delete it from the template when you copy it. 

Shipping Policy Template – Google Docs

Where is the best place to display your shipping policy 

When it comes to shipping policies, your primary goal is to make them as accessible as possible to customers. This will ensure that there is no scope for confusion in the minds of customers while placing an order. Here are 5 sections on your website where you can place your shipping policy links to make it easily findable – 

Website announcement bar

A website announcement bar is a banner that appears at the top or bottom of your website. This banner can be used to convey important information about your business, including key aspects of your shipping policies. Many e-stores use this real estate for high-priority shipping-related information, such as shipping discounts.

Have Shipping policy link at website announcement bar

A link in your website footer

Your footer is probably the first place your customers will scan for the shipping policy. Why? Because that’s where the links to all customer support pages, such as contact us, social media handles, and FAQs, can be found. Most modern websites place a shipping policy link in the footer, if not anywhere else.

Display Shipping policy link in website footer

Product page

Your product page is where customers learn more about your products before purchasing. While browsing through the product page, customers might end up having several questions about shipping and delivery. Many times, shipping aspects like time of delivery and shipping cost will determine whether they buy from you or not. Consider adding a line or two about your shipping policy on the product details page or a pop-up communicating the shipping policy like how Farida Gupta, an Indian apparel brand, did.

Display Shipping policy in product page

FAQ page

Your Frequently Asked Questions page is where customers go to find answers to various questions they have, including shipping. So it makes complete sense to include various components of your shipping policy in the form of QnA to help customers understand your shipping process better. For instance, check out how boAT has displayed its  policy below.

Shipping policy in FAQs page

Delivery option labels

If you offer multiple delivery options like standard shipping and express shipping,  label your shipping options to include the delivery times and costs to help customers select without needing to go through the entire shipping policy. You can display the label on both the product and the checkout page. 

Shipping policy delivery labels

Talk to a fulfillment expert about shipping

The foundation of any good E-commerce business is based on the right choice of shipping partners who can manage its entire lifecycle, right from warehousing to last-mile delivery. At ANS Commerce, we are committed to providing our customers with the best end-to-end E-commerce management services

We are the preferred E-commerce partner for 100+ brands in India and have helped them achieve both short-term growth and long-term sustainability. To know more about us and how we can aid in your shipping process, book a demo now!

Shipping Policy FAQ

How frequently should you update your shipping policy

It is recommended to update your shipping policy every 5-6 months or whenever you make a change to your shipping methods, costs, or timelines.

Are shipping policies legally required?

No. A shipping policy is not legally required. However, most businesses create one because it is highly beneficial for both customers and the brand. It establishes your e-store as a trustworthy one. 

11 Smart Ways To Reduce Shipping Costs for E-commerce Brands

Here’s a fact— as an E-commerce business, regardless of your size, you must deal with the unglamorous yet critical task of shipping. Ensuring that shipments are handled effectively is essential both for the satisfaction of its customers and the company’s success.

And shipping isn’t free. You need to pay the standard shipping charges if you use any courier service to deliver your products safely and timely. 

But customers don’t like extra shipping charges.

In fact, extra costs are the number one reason why customers abandon carts during check-outs.

Shipping charges is the main reason for cart abandonment

The best part— shipping doesn’t need to be expensive. There are ways you can use to save money on shipping without compromising anything.

And in this article, we’ll discuss strategies E-commerce businesses can use to reduce shipping costs, but first, let’s understand some basics.

What is shipping cost and what does it cover?

Shipping expenses encompass all expenses involved in transferring a product from a shelf or warehouse to a customer’s doorstep. These expenses comprise, but are not restricted to:

  • Expenses of boxes, packaging, tape, and labels, 
  • Cost of fuel, tolls, and other transportation expenses,
  • Expense of hiring a worker to select, pack, and dispatch the item, 
  • Insurance expenses against damages or loss during transit, 
  • Fee charged by a courier to retrieve and transport the item, and 
  • Expenses of import/export charges when shipping internationally.

How to save on shipping costs?

You can’t ask the customers to pay the shipping costs without annoying them. After all, no one likes to pay extra for anything.

This is where a few tips come in that can help you reduce the shipping costs, making it a win-win for both customer and the seller.

Here are a few ways you can save on shipping costs-

Decrease the shipping distance

The more the shipping distance, the more are the charges. Want to know why that is so? Here are the reasons why the shipping distance influences the shipping cost-

Fuel costs: Shipping carriers charge based on the distance the package travels. The more the distance, the more fuel the carrier will need to use to transport the package, resulting in higher fuel costs and ultimately, higher shipping costs.

Handling costs: Longer shipping distances also mean more opportunities for packages to be mishandled, lost, or damaged. With more handling points along the shipping route, the shipping carrier will need to increase the amount of labor and time required to transport the package, ultimately resulting in higher shipping costs.

Customs fees: When shipping internationally, customs fees are charged based on the value of the package being shipped. Longer shipping distances can result in higher customs fees due to the increased value of the package being transported.

Now that you know how distance influences shipping costs, here are two things you can do about it:

Strategically choose your warehouse’s location: The nearer it is to your customer base, the lower will be the shipping charges.

Set warehouses in all four directions: Chances are you’ll have customers from around the country. And if so, you should set up warehouses in all four directions so that the shipping distance could be less no matter where the order is coming from. 

Weigh your packages and reduce dimensions

Sending heavier packages usually costs more, except if you’ve chosen flat-rate shipping. If you’re handling the shipping process from your home, it’s a good idea to get a postage scale. This will help you know the exact weight of each package and calculate the shipping cost more accurately. 

It’s also a good idea to try and make the package as small as possible. Some shipping companies charge based on the size of the box used for shipping. This means the bigger the box, the more are the shipping charges. So by using smaller boxes, you can save a lot of money.

Here are other things you can do to reduce the weight and dimension, and ultimately shipping cost: 

  • Use corrugated boxes for packaging your products. Corrugated boxes are lighter and stronger than usual cardboard boxes. 
  • Create custom packaging with smaller dimensions to fit your product, rather than using bubble wraps and air pillows to secure your product during transportation 
  • Use the “ship in own container” strategy, meaning use the product box for shipping. No need to pack it inside another box. 

Negotiate for discounted shipping rates

Small E-commerce companies are usually under the impression that they need to ship hundreds and thousands of boxes per month to be eligible for discounts from shipping companies. However, that is not true. 

Shipping companies offer discounted rates even to small businesses that sell 100 packages a month. But the trick here is to contact these shipping companies and speak with their representative about the business. Explain the shipping needs, projections and volume and negotiate for a better shipping rate. 

Some logistics providers also offer discounted rates for loyalty to only them. But keep in mind to contact multiple shipping carriers and get the best rate possible. 

Don’t stick with one, consider building multi-carrier strategies 

During the initial stage of the business, finding and sticking with one shipping company seems easy. It helps in streamlining the decision process and ticking off an item from the task list. However, this might be doing more harm than good.

A multi-carrier strategy means staying on top of the rates for multiple shipping companies. Yes, there is a lot of work involved in researching, requesting quotes and maintaining data on the same. However, the benefits of a multi-carrier strategy offset the time involved. Here are the benefits:

  • Greater negotiating power – Keeping up with the services and prices of multiple shipping companies offers business owners more negotiating power. When a carrier knows that businesses are in the market for rates, they might offer a better rate to stay competitive.
  • Choosing the right carrier – Not all shipping carriers similarly handle products. Some might be better than others. Eg, in handling fragile items. Therefore, having multiple carriers ensures that businesses choose the right carrier for the right product.
  • Offsetting risks – No one can predict the future. Similarly, no one ever knows when a shipping company’s service goes bad. In that case, a multi-carrier strategy helps in switching from one shipping company to another without compromising on the quality of customer service.

Switch from boxes to poly mailers

If you’re selling small, non-fragile items like clothing then rather than using boxes for shipping, you may want to consider using mailer envelopes or poly bags. This option is way more cost-effective because the smaller dimensions take up less space on delivery trucks, which can save you money. 

Plus, using these types of packages usually requires less packing supplies, such as tapes and bubble wraps, which also can help you save bucks. If you have different combinations of products that you need to ship, it may be helpful to think about using different sizes of poly mailers. This way, you can easily accommodate different orders and make shipping more efficient. 

Stay on top of shipping carriers pricing changes

Every year, the big shipping carriers hike up their shipping rates as part of the general rate increase (GRI). These increases can vary depending on the carrier, service level, weight, and other factors, but on average, they tend to be around 5% (although during the pandemic, we’ve seen higher increases). 

On top of these rate increases, carriers may also add surcharges during peak times, like the holidays and Q4, when there’s a surge in shipping. They may also add other surcharges annually, such as large package surcharges or signature required surcharges. 

Unfortunately, there’s no way to avoid these rate increases and surcharges. You’ll either need to include them in the shipping fee you charge your customers, absorb the costs, or find another way to offset them.

Encourage your customers to place orders early

During peak seasons like holidays or festivals, it is important to encourage the customers to place their orders early to ensure they receive their packages on time.  

Shipping companies often enforce a cutoff time for placing orders to ensure the packages are delivered on time. Post the cut-off, they would charge a higher shipping fee to guarantee on-time delivery. 

Therefore, communicating to customers adequately to place orders early to avoid high shipping fees will help you prepare for the peak season with minimal hassle. 

Choose provider with pickup and delivery services

Choosing a shipping partner that offers pickup and delivery services can be very helpful in multiple ways. For example, it can save you time, effort, and money by eliminating the need to travel to a carrier location to drop off your products. This can also offer you more flexibility with shipping times, as you can schedule a pickup at a time that works best for you. 

Additionally, pickup and delivery services can boost your overall efficiency by allowing you to focus on other aspects of your business. Also, providing faster delivery and greater convenience to your customers can also lead to better customer service, which can ultimately lead to increased satisfaction and loyalty.

Choose to package provided by the carrier

Most shipping companies offer small businesses certain boxes and envelopes for either free or at discounted prices. If you still need to buy supplies like boxes, bubble wraps, air-fill, etc., you can buy in bulk to get at discounted rates.

Don’t let the investment stop you from providing good packaging. After all, if anything happens to your products while shipping, it will ultimately be your loss.

Pass on the charges to customers

Yes, your customers aren’t going to be happy if they need to pay shipping charges. However, if you use the right way, you can still pass on the charges to your customers. 

Here are a few ways you can pass on the charges to your customers without losing them-

Show empathy

Before jumping into offering help or an explanation, take a moment to listen attentively. You’ve probably been in a similar situation yourself, where the cost of shipping made you hesitate to buy something you really wanted. It’s totally understandable to acknowledge this frustration before moving on to any solutions or explanations.

Explain the reasons behind the prices

Customers may not always understand the intricacies of shipping, so it’s important to explain things clearly. The easiest explanation, assuming it applies to your situation, is that you’re only passing on the actual shipping costs to the customer. 

Different shipping services offer varying levels of speed, reliability, and coverage, so it’s helpful to share information about your shipping partners and why you’ve chosen to work with them. Ideally, you should add a comprehensive shipping policy page on your website that you can direct customers to for more details. 

If the customer is in a location that’s more expensive in terms of shipping, or if they’ve chosen a product that’s more costly to ship, it’s useful to share that information with them as well. Being transparent about the costs can help to build trust and prevent any misunderstandings.

Provide direct comparison

It’s better to provide context for your shipping prices to alleviate any concerns that customers may have about being overcharged. Comparing your shipping prices to that of your competitors can be a great way to reflect that your prices are fair and competitive. 

Another useful strategy is to link directly to the shipping provider’s page, so customers can see the base shipping price for themselves. This way they’ll know the real prices and will also not feel annoyed while paying for the shipping costs. 

Share your approach

Providing explanations for why your shipping works the way it does can be helpful for some customers. For instance, separating the shipping cost from the product cost can become a part of your transparency values, which can build trust with your customers. 

Moreover, if you’re using more expensive shipping because it results in fewer damaged products, you can emphasize how this decision benefits the overall customer experience. This can be a great selling point and let customers feel confident in their purchase, knowing that the product will arrive in good condition.

Offer alternative options

Offering ways for your customers to reduce their costs or get more value for their money is a great way to enhance their shopping experience. Some examples of ways to do this include: 

  • Offering discounts at certain times or for certain types of customers. 
  • Providing bundles or bulk purchase options to reduce the per-item shipping cost. 
  • Allowing customers to pick up their orders at a local store, if that’s an option. 
  • Suggesting lower-cost product alternatives that may be similar to what the customer is looking for. 

While addressing shipping complaints one-on-one is sometimes necessary, you can reduce the number of such inquiries by having a clear and comprehensive shipping policy page on your website. This can help customers answer their own questions and feel confident in their purchasing decisions.

Partner with fulfilment centers 

You don’t have to do it all by yourself. There are companies like ANSCommerce that can take care of the entire shipping process and get your products delivered to your customers in the best way possible. All you need to do is focus on the production part, and your logistic service provider will manage the rest. 

Spread across India, we provide fully equipped storage facilities with cutting-edge warehouse management systems (WMS) and order fulfilment capabilities: pick, pack, dispatch, and return management. On top of this, we have partnerships with all major national carriers, and you’ll get the most favorable rates in the market. 

Of Course, this is not all; as India’s best E-commerce enabler, ANS Commerce offers end-to-end solutions to manage your online business-from performance, marketing, and marketplace management to warehousing & logistic services

To know more about how ANS Commerce can help you with warehousing and logistics support, book a free consultation today!

The strategies mentioned above are proven ways to help small businesses save money on shipping while improving their delivery times and boosting their customers’ experience. Thus, whether you’re just starting your business or looking to optimize your existing shipping processes, employ these tips to take your business to the next level.

How Much Does It Cost To Rent A Warehouse?

Your E-commerce business is growing rapidly, and you’ve started to run out of space to keep the stock intact. Or, your current setup isn’t helping in terms of location and is hindering your team’s efficiency, and you are on an explicit hunt for better storage solutions.

Whatever the reason, if you are seriously searching for a suitable warehouse storage facility for your business and are already foraging options—you’ll need to consider many factors before making the final decision. And the crucial factor that’ll come into play would be accounting and measuring the total cost that’d go into renting a warehouse and comparing alternate options to see what would work best for your business.

This article will help you weigh through the warehousing costs and calculations in-depth and the alternative solutions associated with it—to help you make the right decision. Keep following:

Components of Warehouse Cost

It is no secret that landowners and brokers often make renting a warehouse complex by using complex jargon instead of plain English to communicate their pricing options. But in reality, warehouse cost is based on three main criteria – the floor area (square footage), base rental rate, and estimated operating cost. 

The Floor Area 

The floor area depends on how much space you need for your business and is usually measured in square footage. The area you use for inventory impacts the cost of renting a warehouse.

Note: You can further cut down costs on warehousing by optimizing and making the best use of the available vertical space—reducing total rental costs, big time.

Base Rate

The base rental rate is the amount you’ll pay the landlord, excluding additional operating costs. A base rate is usually charged per square foot on a monthly, quarterly, or yearly basis—as per your lease agreement.  

Operating Expenses

There are two types of operating costs you’ll need to consider before renting a warehouse – Triple Net Lease, also known as Net Net Net (NNN), and Common Area Maintenance (CAM) fees. 

1. Triple Net Lease (NNN)

Net Net Net, also known as a triple net lease, refers to the property taxes and insurance fees that you, as a lessee, are supposed to pay besides the base rent—since you are responsible for all the operations happening at the rented property.

2. Common Area Maintenance

Common Area Maintenance (CAM) is the maintenance costs passed down from the landlord to the lessee. Maintenance fees include everything—from management to maintenance of the commercial property. 

How is Warehouse Rent Calculated

Did you know in the financial year 2022, the average warehousing rent was 258 Indian rupees per square meter per month in Pune, which was ranked the most expensive among all major cities in India? We’re breaking down the calculations below into three different rental options: monthly rate, quarterly rate, and annual rate–to help you better estimate the warehousing costs specific to your brand:

Monthly Rental Rate

Let’s say your business gets billed every month for warehousing and assume the following:

The storage space you use for warehousing = 1000 sq ft

The base rate = Rs 50 per sq ft per month

NNN = Rs 20 per sq ft per month

Adding up the base rate and NNN (Rs 50+Rs20), you’ll see that your total asking lease becomes Rs 70 per sq ft per month. Just multiply this amount by the square footage of storage, i.e., Rs 1000 X Rs 70= Rs 70,000.

This means you would become liable to pay Rs 70,000 as rent every month at the chosen warehousing space.

Quarterly Rental Rate

 Let’s assume the following for quarterly rental rates: 

Storage space you use for warehousing: 1000 sq ft

Base rate: Rs 100 per sq ft per quarter

NNN: Rs 50 per sq ft per quarter

Adding up the base rate and NNN(Rs100+Rs50), you’ll see that your total asking lease becomes Rs 150 per sq ft per quarter. Just multiply this amount by the square footage of storage, i.e., Rs 1000 X Rs 150= Rs 1,50,000.

In this case, you would become liable to pay Rs 1,50,000 as rent every quarter or Rs 1,50,000/12 = 12,500 per month. 

Annual rental rate

Let’s say you choose the option of yearly billing for warehousing and assume the following:

Storage space you use for warehousing: 1000 sq ft

base rate: Rs 200 per sq ft per year

NNN: Rs 100 per sq ft per year

Adding up the base rate and NNN(Rs 200+Rs100), you’ll see that your total asking lease becomes Rs 300 per sq ft per year. Just multiply this amount with the square footage of storage, i.e., Rs 1000 X Rs 300= Rs 3,00,000.

This means you would become liable to pay Rs 3,00,000 as rent every year for the chosen warehousing space.

Generally, annual billing gives you the most beneficial rate structure, and you’d definitely want to consider this before choosing a warehouse.

Apart from this, make sure to ask your landlord about the additional expenses you might incur, such as electricity, HVAC maintenance, and other operational & repair expenses. 

Is Renting a Warehouse Your Only Option?

The simple answer is ‘No.’ Renting a warehousing space is not the only option. While buying your own warehouse can seem very alluring, it’s certainly not possible for most E-commerce brands to make this big of an investment. 

You’ll not just become responsible for the maintenance and upkeep of the warehouse but will also be trapped to pay off huge amounts of down payments. 

Alternatively, many businesses work with trusted third-party logistics (3PL) providers if renting or owning a warehouse becomes out of the question. 3PL does all the heavy lifting on your behalf by taking care of all your storage and warehousing needs while being cost-effective. 

Partnering with third-party logistics providers gives you the flexibility to focus on more important things and take care of all your logistics requirements end-to-end.

If you are looking for warehousing and logistics solutions for your E-commerce business, work with the best in the business. We at ANS Commerce provide fully equipped warehouse facilities across India with cutting-edge warehouse management systems (WMS) and order fulfillment capabilities – pick, pack, dispatch, and return management. 

To know more about how ANS Commerce can help you with warehousing and logistics support, book a free consultation today!

Recommended Read: 

  1. E-commerce Warehousing 101: Everything You Need To Know
  2. What Are E-commerce Fulfillment Services And How To Choose One?
  3. Shipping Labels 101: A Beginners Guide On How to Create a Shipping Label