Here is a very interesting video by CNBC explaining the problems online merchants face in reducing returns and the costs associated with them.
With a return rate as high as 20-30%, companies have been looking at ways to minimize loses and Amazon is leading the way with some creative solutions.
Most of the costs associated with returns are in the ‘last mile’ of the journey where a single courier can only go to one address at a time. To reduce these costs, companies utilize a network of retail shops that act as a hub for all the returns.
These hubs then buy all the inventory from Amazon at a big discount and repackage it with some extra accessories and sell it for profit. The example in the video towards the end specifically shows camera bundles on Amazon.
Amazon saves money by not having to deal with one item at a time and the resellers can utilize their already existing physical store presence to make a healthy profit. It is a win-win situation for both parties.
Just be aware that the camera bundle you buy from Amazon might not be 100% brand new and the discounted price comes with some caveats.
