RETURNS MANAGEMENT

The profit lever

Returns used to be a side note. When focus stayed on chasing topline growth – and real savings were locked in outdated return flows.

Today, the most successful businesses turn to returns for growing profit. On how much value they actually keep, not on how much they sell.

Fact is: Lowering your return rate by just 1%-point can have a huge impact on operating profit.

Let’s talk about your numbers

How lowering your return rate by 1%-point improves EBITDA 40%

At management level, we often talk about growth. But it’s easy to underestimate the enormous impact that internal efficiency has on results.

We’ve done the math – and the effect that even a small reduction in return rate has on operating profit (EBITDA) speaks for itself:

➔

Metrics*	Return Rate after decrease 14% point (25%-24%)	Return Rate before decrease 15% point
Net online revenue	1 204 000 000	1 190 000 000
Increased net online sales	14 000 000	N/A
Return rate	24%	25%
Returns value (cost of returns)	120 000 000	126 250 000
Reduced return handling cost	10 080 000	N/A
Increased profit due to reduced returns	4 200 000	N/A
EBITDA increase	14 280 000	N/A
EBITDA	49 280 000	35 000 000
EBITDA increase %	40,8%	N/A
EBITDA-margin %	3,5%	2,5%

See calculation below*

👉🏿 Curious about your own numbers? Let us calculate your true profitability and see how much EBITDA you’re really keeping.

And that’s just the start

Add to that what our Return Experience Platform do more, and the effect is even greater. We collaborate with Nelly.com, Stadium, Aim'n, Nordic Nest and many others - not only to reduce the return rate
but also to cut costs and streamline the entire value chain:

Register – returns are registered digitally, giving you full control immediately.
Route – smart routing to the right warehouse or partner saves shipping costs and time.
Receive & Review – returns are received faster, reviewed automatically, and made available for sale again, while providing you with insights that reduce the return rate going forward.

Bottom line: Inretrn helps you build infrastructure for profitable growth

✅ Return rate reduction

✅ Lead times cut by up to 70%

✅ Customer service load down by 20%

✅ Faster refunds and resale

✅ Lower shipping and storage costs

✅ Higher customer satisfaction

Want to see the full impact for your business?

Let's talk about your numbers

We've been able to reduce our return rate from 38% to 27%, Inretrn has played a fundamental role in this success
Stefan Svensson, Chief Operations Officer, Nelly.com

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*This is how we calculated

The basis for the calculation is... (taken from the company's website if available, otherwise from articles or similar sources). Where information is missing, we have worked with assumptions based on industry standards. See explanations of the above model and assumptions below:

Net online revenue: Online gross sales – Returns value (item return rate * avg item value)
- Increases as a result of the return rate decreasing
Reduced return handling cost: Number of returned items * handling cost per item
- Decreases as the number of returned goods decreases
- Return handling cost: SEK 210 per item (total return handling cost, including shipping to and from the customer, warehouse handling, quality control, depreciation such as seasonal goods, administrative costs, McKinsey, 2023)
Increased profit due to increased returns: Number of sold items * Gross margin per item
- The number of items sold increases as the number of returns decreases, which has a direct effect on earnings
- Gross margin is estimated at 60% in this case (assumption of gross margin for internal brands approx. 60%, external brands approx. 30%)
Increased EBITDA: Initial EBITDA - Reduced return handling cost + Increased profit due to increased sales
- EBITDA increases as costs decrease and sales increase
EBITDA increase: (New EBITDA – Initial EBITDA) / Initial EBITDA
- The increase corresponds to what is stated in “Increased profit”
EBITDA margin: EBITDA / Online gross sales
- Increases as EBITDA increases with reduced return rate, online gross sales remain unchanged
- In your case, we have calculated an EBITDA margin of (X%)