Amazon is one of the largest companies in the world and has grown everywhere since their initial inception as an online bookstore company. With such growth has come many issues – I guess “new levels new devils” is true! Amazon’s most recent issue has been related to returns. Indeed, Amazon has been dealing with so many returns it’s caused a massive problem for the e-commerce giant and the planet. According to A National Retail Federation survey found a record $761 billion of merchandise was returned to retailers in 2021. This massive numbers overtake what the U.S. spent on national defense in 2021, which was around $741 billion.
Last year, Amazon declined to share its overall return numbers, however, in 2021 the National Retail Federation estimates that for online purchases, the average rate of return was even higher, at nearly 21%. This impressive performance also has a negative impact on the environment because the U.S. returns generate 16 million metric tons of carbon emissions. In fact, during the complicated return journey, goods cause up to 5.8 billion pounds of landfill waste each year. In fact, according to Mark Cohen, director of retail studies at Columbia Business School and former CEO of Sears Canada “We’re talking about billions, billions, and billions of waste that’s a byproduct of consumerism run amok” and that “The reverse logistics are always going to be nasty because the merchandise, in most cases, cannot be resold as it was originally”. Unfortunately, “The most expedient pathway is into a dumpster, into a landfill.” What do you think about Amazon’s return issues? And is there a solution?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.