Mail Order Returns Business Plan

Executive Summary

The handling of e-returns is one of the most serious problems currently facing e-tailers and catalog merchants. E-returns not only are expensive, time consuming, and labor intensive for retailers to process, but the potential hassles to consumers impair sales and slow customer growth. As a result, pure-play e-tailers and catalog merchants are at a significant disadvantage to brick-and-mortar and click-and-mortar retailers that allow customers to return purchases made online to their physical store locations. QuickReturns fills the role of an outsourced solution provider, as it is the first company to provide consumers with a no-hassle and cost-free method to return and exchange merchandise ordered from virtual stores, while saving retailers money on returns handling.

QuickReturns will provide its retailer partners with physical points of presence at which their customers can return unwanted or defective merchandise. To minimize capital expenditures, operating costs, and scalability time, QuickReturns will utilize a distribution partner model. Retailer partners will pay annual membership fees and transaction-based return and exchange fees. The latter two fees will be shared with the QuickReturns distribution partners.

By partnering with QuickReturns, retailers will benefit from reduced return handling costs, increased sales, and improved customer service. Distribution centers will benefit by adding a low-cost revenue stream that will also drive desired, but otherwise inaccessible, customers into their stores. Finally, consumers will enjoy saving time and efforts with the product return process and instant refunds.

QuickReturns was founded by four individuals, each of whom has had many years in management consulting. At the moment, the company seeks major seed financing. Additional rounds of financing will be required to fund future marketing activities and technological development.

1.1 Mission

QuickReturns offers its clients, electronic retailers, and catalog merchants, a possibility to reduce costs associated with reverse logistics and thus increase customer service and enhance customer loyalty. By providing ‘no-hassle’ product return or exchange facilities it will help consumers become more comfortable with the Internet and catalog shopping. Customer service and profitable growth are two major cornerstones of QuickReturns.

1.2 Keys to Success

While there are risks associated with all new businesses, QuickReturns has identified three particular issues, unique to its model, that will improve the company’s chances of success:

1. Successful technology development.
   This will require the work of a dedicated team over several months. The software application will need to be simple and user-friendly for the end user, but robust enough to integrate easily into retailers’ disparate database systems. It is estimated that a working application prototype can be built and tested in 4-6 months. If development takes longer than six months, it will delay the roll out of the QuickReturns service. Any delays will give competitors time to become established and reduce any first mover or near-first-mover advantage QuickReturns will have. The company will also need to control the amount of time it takes to integrate into the retailer partners’ databases. The application will be designed to be as “plug and play” as possible, but integration will still need to be customized for each retailer partner.
2. Striking favorable agreements with proper distribution partners.
   While financial analyses and projections indicate that QuickReturns would be a very profitable ancillary business to distribution partners, their management may decide to design their own e-returns program, partner with another business similar to QuickReturns, or not enter the space at all. It is not likely that distribution partners will try to build an e-returns program like that of QuickReturns without partnering because of the difficulties involved in designing, maintaining, and integrating the requisite technology. With few exceptions, the potential distribution partners identified by QuickReturns have chosen to partner with other companies to execute technology initiatives which are outside of (but synergistic to) their core businesses. In addition, there are no known companies currently offering this service to potential distribution partners.
3. Capturing market share.
   Formidable competitors are entering the e-returns space, including well-capitalized companies such as UPS and Mailboxes, Etc. While no company has established itself as the dominant e-returns player as of yet, QuickReturns should get to market in time and capture the market share it predicts. This will strongly depend on the execution of the QuickReturns’ management team as well as on the attention and resources its competitors devote to their e-returns programs.