HIGH POINT — As e-commerce has grown — from about 7% of sales 12 years ago to 27% in the first half of this year — so has the biggest challenge in the sector: returns.
Julie Mahloch, chief of business development for Rush ReCommerce, noted that returns are growing, rising from $200 billion this year to $300 billion in 2024.
“This means the return challenge just got even bigger,” she said. “And not all returns are created equal; home furnishings are truly challenging.”
The question for vendors, she noted, is who takes those returns. And then there’s the problem of low to negative net recovery for the return, thanks to the cost of shipping bulky items.
She noted that some companies choose to do bulk liquidation of returns, which has lower processing costs, but also a lower recovery rate.
“That’s because there is a weak secondary market and buyers can be inconsistent, and this doesn’t work well unless you can do a full truckload,” she said. “To top it off, now your brand and your products are in the secondary market without any control over how or where they are being sold and displayed.”
Enter Rush ReCommerce, which is building a network of physical locations geared to take back large and bulky online returns such as furniture.
“This network creates an on-demand, reverse logistics solution for e-commerce,” Mahloch said, adding that the products are processed with specialized software to evaluate the condition and ability to resell each item.
The company also has created a consumer-facing brand, The Rush Market, as a digital marketplace with physical retail stores, offering a discount based on the condition of each item. Consumers join as members of The Rush Market to take advantage of such deals for open box items.
“Our website and retail experience is custom built to sell open box, one-of-one items,” Mahloch said. “Since many of the items cannot be reshipped profitably, the physical location is critical to recovering the value and selling the product.”
“By tackling this challenge, Rush ReCommerce truly hopes to take away one of the pain points of selling online and help increase the profitability of ecommerce for our partners,” she concluded.