Our experience with Amazon’s Prime Try Before You Buy program
TLDR: we unenrolled all our inventory from Amazon’s newish Prime Try Before You Buy program because it’s tying up too much inventory, and stuff is being returned in unsellable condition.
We have mentioned a few times about the Prime Try Before You Buy program, or TBYB for short. After testing it with a few hundred skus, we thought it seemed like the pros outweighed the possible cons, so for most of this year we enrolled all eligible products.
Then we noticed our overall sales volume was slipping. We didn’t blame the program, but we did turn it off for most of July just to reevaluate and see if there seemed to be any unexpected cons. We didn’t see a change, and sales velocity continued to trend slowly downward so we blamed the economy and turned it back on.
Now, a month later, we did some spot checking. I haven’t found a way to pull reports on these orders, so I did a visual scan in Manage Orders, using the filter to select Prime Try Before You Buy orders in the left column. I looked at 200 orders from over a month ago.
These orders make up almost 9% of our order volume, and seem to have a higher than average ASP so they probably make up more than 10% of the dollar value.
FIRST, THE GOOD NEWS.
Only 4% of the 200 orders I looked at were returned after the trial period, costing us return fees. This is far lower than our average return rate of 15%. We only have return fees on 4% of these orders, instead of 15%. This saves us money, right?
BUT NOW THE BAD NEWS.
A whopping 49% are returned during the trial period. This is way up from the 28% we saw a few months ago. But these don’t cost us any fees. No harm, no foul, right? Wrong.
If these items take 4 weeks to complete the cycle (order, ship to customer, 7 day trial, returned by customer, received by AZ, warehouse transfer, placed back into our inventory), then we have roughly 4% of our inventory unavailable at any given time. That’s only counting the units that will be returned during the trial period. Since these tend to be the higher priced, faster moving items, the hit to our sales volume could actually be somewhat higher than the item count suggests.
One more negative: I checked 10 orders that were returned during the trial period and found that 4 (that’s 40%) were returned in unsellable condition. That’s a very small sampling and could be meaningless, but it was just another potential problem that we really didn’t expect. We expected better of humanity. If they bought it knowing they would very possibly return it in the next few days surely they would keep the tags and return it in new condition, right? I know, I know. You’re laughing.
Now I suspect the Tik Tok world has learned about the program and all those kids are using it as a free 7 day rental service. It’s better than the 30 day Amazon rental program because their account is never even charged for the items.
Based on this combination of data and conjecture, we have decided once again to unenroll all our skus.
I’d love to hear from others who have tried the program. What are your thoughts so far? What numbers have you run? What pros and cons did you expect, and what do you actually see?
