Amazon's free shipping and returns are great for customers, but costly to a company in the midst of trimming.
What they're saying:
Free shipping and returns were birthed to spur people to shop more online, Arnab Sinha, a managing director and senior partner at BCG, tells Axios in an email. "The pandemic and its aftermath turbocharged all those habits." In an era of cheap capital, companies and investors were stomaching the costly shipping perk so long as it drove growth.
"I’d hypothesize that the renewed focus on profitable growth is what is pressurizing returns, overall," Sinha says.Pure online retailers like Wayfair and Chewy and Amazon and even Walmart.com are suffering from lower volumes, which means there's less package volume to be shipped, which means there's less revenue to absorb fixed costs or any increase in variable cost," Marc Wulfraat, president of supply chain consultancy MWPVL International, tells Axios.
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