Return on Inventory Blog:
Planning for Inventory Returns
Joe Palzkill, Director of Sales and Marketing, Direct Tech
Posted December 22, 2011. Retailers are in the midst of the holiday peak. While the sales peak ends at Christmas for most, the inventory returns peak is yet to come. This annual phenomenon invariably creates waves, especially if you sell products with typically high return rates (e.g., footwear and apparel).
Consider that a return rate of 20 percent for a retailer with top-line demand of $50 million means $10 million in returned sales. Then take the reduction in gross margin dollars and add the cost of processing the returns. It’s clear that returns can strongly impact a retailer's bottom line.
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