June saw an ITV News investigative team release footage that alleged Amazon has been destroying millions of unsold items every year at its Dunfermline fulfilment centre. A leaked document found that one week alone in April led to 124,000 items being marked “destroy” at the warehouse, begging the wider questions of who is responsible for this waste, and how can both Amazon and companies that sell on its platform reduce these figures?
Boris Johnson deemed the situation “incredible”, adding that the reported waste is “an indictment of a consumerist society”, if true. However, an Amazon spokesperson responded that the group is “working towards a goal of zero product disposal”, with its priority to “resell, donate to charitable organisations, or recycle any unsold products”. Regardless of the denials, reducing waste is undoubtedly becoming an increasingly prominent challenge for e-commerce companies.
PJ Scott, director and co-founder at the Amazon agency Velocity Commerce, points to managing returns as the key aspect for retailers to tackle. “In a consumer culture that has evolved to expect the ability to return any product, faulty or otherwise, to the retailer, returns can account for up to 10% of sales,” he says.
Velocity supports brands that sell on both Amazon and eBay by specialising in Amazon marketing, Amazon content optimisation, Amazon SEO, copywriting, graphic design, data and analytics, international sales, supply chain, and Amazon merchandising. The group manages the product ranges for a range of partners, including Sony, Nextbase, Smartstore, Pure, and Majority.
Crucially, it has also established a refurbishment service for its clients to tackle the rising returns problem. “Through the service, our warehouse team receives, inspects and repairs our clients’ products and, wherever possible, we will resell the items through dedicated channels such as eBay or Amazon,” says Scott. “Therefore both minimising our clients’ waste and helping them to drive a profit.
“Since 2019 we have partnered with Sony to provide a sustainable sales solution for the company’s refurbished tech products. We launched the brand on eBay as a completely new sales channel for its refurbished, returned and excess stock. So, instead of these products taking up valuable space in a warehouse, or in some instances, being sent to landfill, they get a new lease of life in a household which might have otherwise been priced out of buying a premium product.”
In addition to the work agencies such as Velocity, Amazon itself is taking a more prominent role in managing returns and reducing product waste, says Scott. “When dealing with faulty or unsellable returns on Amazon, previously sellers only had the option to dispose of the stock or request the stock back to resell through other channels. Recently, however, Amazon has been contacting fulfilled by Amazon (FBA) customers, offering them a service whereby Amazon will screen and grade your customer returns. These grades can range from as new, through to unsellable or in need of repair.
“The seller then sets the price and manages the listings as usual. This is being incentivised by Amazon with various offers around charges and seller fees, and we can definitely see more of this innovation emerging.” He adds that “sending stock to be destroyed is not the answer”, instead pushing that it is both cheaper and better for the environment to remove the stock from Amazon and sell it via an alternative channel.
Despite Amazon being caught in the firing line of the waste and returns management affair, the buck does not wholly stop at the global company. One approach could be to introduce “higher disposal costs or better government legislation” to force sellers to “look for more sustainable options”, much like the recently established anti-waste laws in France. Yet, for Scott, individual retailers must carry much of the responsibility themselves.
“No matter what category you are selling in, there are a number of essential steps e-commerce retailers can follow to reduce the rate of returns, and importantly, minimise their impact on the environment,” he says. “Firstly, providing detailed, accurate product information at the point of sale will mean your customer will be well informed about what they are purchasing, and therefore, in theory, will reduce the likelihood of them returning the product.
“In a similar vein, it is important to listen to the information provided to you by your customers about why they have returned something. Regularly monitor your customer reviews and product returns information, and then make proactive improvements to the experience for future customers.”
While Amazon has been highlighted as a possible major culprit in the continued waste from e-commerce firms, rising returns are an issue that all retailers now have to deal with. Collaboration between stockists such as Amazon, agencies such as Velocity, and retailers such as Sony can definitely produce modern and sustainable solutions to waste management. However, business-to-consumer communication can also not be overlooked as a key factor in limiting returns, and thus environmental waste.