Offsetting Strategies for E-commerce Businesses

Last year I had a call with the VP of ecommerce of a $300M+ retail company who was convinced their 32% return rate was "just the cost of doing business" When I dug into their data I discovered that almost half of post-purchase revenue loss is preventable. This happens all the time, retailers are pouring their heart and budget into hitting sales targets, only to watch a third of that revenue disappear due to inefficiencies and refunds. It's demoralizing to be a retailer these days. It doesn't have to be this way! Here's the playbook we used to help that company recover over $6.8M in just 4 months: Most retailers focus on the wrong metrics, for example they celebrate $10M in sales while silently losing $3.2M to returns, and another $1M to operational inefficiency, plus $800K to return fraud and abuse. Quick observations: Your "best customers" are killing you! 37% of "VIP shoppers" are serial returners, they look great in your CRM but they're negative margin customers. We found one customer returning over $14K → this is totally preventable! This is our framework that we developed after working with hundreds of enterprise retailers in the past 5 years: Prevent returns Enable size/style swaps and allow for uneven exchanges (more expensive or cheaper options) Store credit options instead of refund Relevant product recommendations for exchange and upsell Analyze the return reasons by product - this can save you a lot of products from being returned! Results: Over 60% reduction in refunds b) Prevent fraud and abuse Fraud rules to prevent return abuse Automate policy enforcement and verification of product quality before the product is sent back Product inspection workflows at the warehouse level Results: the highest we seen last year for a customer was over 90% c) Streamline Operations Setup rules for returns routing to the closest warehouse or outlet stores Minimize clicks and enable a scan, scan, refund workflow Centralize all returns data and actions into one system, to prevent system switching Results: 42% faster processing Returns are not a cost of doing business. They're a goldmine of hidden opportunities. But here's the truth: Most retailers will read this and do nothing. They'll keep losing millions because "that's just ecommerce." The smart ones will see this as the competitive advantage it is. What side do you want to be on? P.S. If you're a retail executive seeing 20%+ return rates, DM me. I'll share our full framework as it’s way more detailed.

As a DTC brand, have you considered the risks of relying solely on Amazon as your growth engine, especially as its dominance in the e-commerce landscape continues to surge? Amazon’s share of US e-commerce sales is projected reach an impressive 40.9% by 2025, a clear signal of Amazon’s tightening grip on the retail market. I see this trend as a wake-up call. While Amazon offers unparalleled reach, its growing dominance amplifies the risks of over-dependence. Policy shifts, escalating fees, and fierce competition can destabilize your profitability and erode your control over your brand. The solution? Diversify your sales channels to build a more resilient business. Here are 2 actionable strategies for diversification every Amazon brand should pursue today: 1. Embrace Direct-to-Consumer (DTC) Sales: Invest in your DTC infrastructure. This is the time to focus on building a real brand that stands independently to the vast search intent that Amazon offers. Use Shopify, Klaviyo, Meta, and Google as your "core four" to begin generating and converting demand to your DTC business. Selling directly to your customers lets you bypass Amazon’s fees and regain control over your brand's narrative. By forging stronger relationships with your audience, you not only mitigate the impact of Amazon’s rule changes but also unlock opportunities for higher margins and customer loyalty. 2. Tap into TikTok Shops: With now over a million creators thriving on TikTok Shops and search volumes surpassing Google in certain product categories, it’s a vibrant marketplace waiting to be explored. Partner with influencers and leverage TikTok’s powerful discovery tools to connect with new audiences and drive sustainable growth. You'll also find the discovery on TikTok drives new customers to both your Amazon and DTC business as a bonus. Why act now? Relying solely on Amazon leaves you vulnerable to unexpected disruptions, whether it’s a policy change or intensified competition. But by branching out to platforms like TikTok Shops, building a DTC presence, and exploring multiple revenue streams, you can safeguard your business and seize untapped opportunities. The data is undeniable: Amazon’s meteoric rise is both an opportunity and a risk. Don’t wait for the next policy shift to catch you off guard. Take action today—diversify your strategy, harness innovative platforms, and position your e-commerce brand for long-term success.

Imagine the frustration of watching your profits disappear through logistics missteps. 📦 Over the past three years, I've worked with more than 200 e-commerce businesses, and the same 5 operational mistakes keep surfacing, draining their bottom line. The patterns are striking, and the solutions are within reach. Here's what I consistently observe: → Shipping cost miscalculations by 30-40% Most operations rely on basic weight and distance averages. But seasonal fluctuations, dimensional pricing, and fuel adjustments create unexpected expenses. The fix? Build a 25% buffer into your calculations and negotiate flat-rate agreements with carriers whenever possible. → Packaging inefficiencies that drain resources I've witnessed companies hemorrhage $50K annually simply from oversized boxes. Every additional inch impacts your margins. Strategic packaging optimization and automated solutions for high-volume operations make a substantial difference. → International expansion without proper groundwork Customs complications, documentation mistakes, and duty calculation errors devastate customer satisfaction rapidly. Partner with experienced customs brokers and maintain real-time visibility on international shipments from the start. → Suboptimal inventory placement strategies Centralizing everything in one location while serving nationwide customers adds 2-3 days to delivery times. Strategic fulfillment center locations can reach 97% of customers within two days. → Lack of operational contingency planning Depending on a single carrier means one service interruption can halt your entire operation. Diversify your carrier relationships and maintain backup 3PL partnerships. Companies that streamline operations early position themselves for sustainable growth and enhanced customer satisfaction. 🚀 Which operational challenge is impacting your profitability most significantly right now? #EcommerceSolutions #LogisticsExcellence

🚨 DTC Founders should remember these 4 key strategies to navigate tariff uncertainty in USA/Canada: As economic tensions continue to build, we've been having strategic conversations with dozens of e-commerce brands about adapting their marketing approach. A consistent theme has emerged: "If tariffs actually occur, we'll have to shift to much more conversion-oriented ad spend." This isn't just about adjusting budgets. It requires rethinking your entire marketing framework. Here's what forward-thinking brands are doing to prepare: First, they're recalibrating performance metrics. When product margins compress due to tariff impacts, your current ROAS targets become obsolete. A 2.5x ROAS that was profitable pre-tariffs may become unsustainable post-implementation. Second, they're prioritizing lower-funnel strategies. Economic uncertainty demands greater efficiency. Brands are shifting from awareness-building to conversion-focused campaigns, ensuring every dollar works harder. Third, they're strengthening owned channels. Email, SMS, and loyalty programs become even more critical when acquisition costs rise. Maximizing customer lifetime value offsets compressed margins. Fourth, they're scenario planning. Smart brands are developing multiple strategy frameworks based on different tariff outcomes, allowing for rapid pivots as the situation evolves. The most interesting insight? This isn't necessarily about reducing marketing investment. It's about reallocating it more strategically. Several brands are actually increasing spend in highly efficient channels while cutting others entirely, ensuring sustained growth despite margin pressures. Economic headwinds don't eliminate growth opportunities. They simply redefine the path to finding them. The brands that will navigate this successfully aren't those panicking about potential tariffs, but those methodically adapting their approach with strategic precision.

During times of tariffs and trade uncertainty, e-commerce businesses face significant challenges, including increased costs due to import duties, unpredictable pricing for goods, potential delays in shipments, and consumer anxiety about price fluctuations, often leading to hesitant buying behavior and impacting overall sales and business planning. Key impacts on e-commerce during tariff uncertainty: 1. Higher product prices: Tariffs directly increase the cost of imported goods, forcing e-commerce sellers to raise prices for consumers, which can lead to reduced demand, especially for price-sensitive items. 2. Supply chain disruptions: Fluctuating trade policies can lead to delays in shipments, causing inventory issues and impacting delivery times, potentially frustrating customers. 3. Market volatility: Uncertainty about future tariff changes can make it difficult for e-commerce businesses to plan inventory levels and pricing strategies, leading to potential losses if they miscalculate market trends. 4. Consumer hesitation: When consumers are aware of potential price increases due to tariffs, they may delay purchases, leading to decreased sales for e-commerce businesses. 5. Shifting sourcing strategies: Businesses may need to explore alternative sourcing options to mitigate tariff impacts, potentially requiring new supplier relationships and logistics adjustments. How e-commerce businesses can navigate and action tariff uncertainty: A1. Transparency with customers: Clearly communicate price changes to customers, explaining the impact of tariffs on product costs. A2. Diversify sourcing: Explore options to source goods from multiple countries to minimize dependence on a single source impacted by tariffs. A3. Inventory management: Optimize inventory levels to manage fluctuations in demand and potential supply chain disruptions. A4. Data analysis: Monitor market trends and customer behavior closely to adapt pricing and product offerings accordingly. A5. Engage with policymakers: Stay informed about trade policy developments and advocate for policies that support e-commerce businesses.

Navigating the Storm: How to Adapt Your Order Management, PIM, and E-Commerce Systems Amid Tariff Fluctuations Let’s face it—there’s no silver bullet for tackling the chaos of intense tariff fluctuations. Whether you’re managing order systems, Product Information Management (PIM), or e-commerce platforms, the reality is stark: anything you do here will be hard. But hard doesn’t mean hopeless. The secret sauce? Building systems flexible enough to roll with the punches as rules shift—sometimes overnight. If this feels familiar, it should. Think back to the COVID-19 supply chain chaos—constant pivots, endless firefighting, and the urgent need to adapt. We’re in that same unpredictable territory now. Tariff changes are coming fast, and your systems can’t afford to lag behind. Step 1: Pick Your North StarFirst things first: decide what you’re optimizing for. You can’t win every battle in a volatile market, so what’s your priority? Customer experience—keeping buyers happy even as prices shift? Gross margins—protecting profitability in a squeeze? Fulfillment—ensuring orders still ship on time? Choose wisely. Your strategy hinges on this. Step 2: The Tariff Surcharge PlaySpeaking of margins, here’s a practical move: introduce a tariff surcharge. We saw this work during the pandemic—customers accepted it because they understood the external pressures. Be transparent about it, and it could be a lifeline for your bottom line without losing goodwill. Step 3: Know Your Costs, Embrace TechNext, dig deep into your bill of materials. Understand every component, every cost driver. Then, supercharge your CPQ (Configure, Price, Quote) platform with dynamic pricing inputs. Better yet, bring AI into the mix to adjust pricing in real-time as tariffs fluctuate. This isn’t just smart—it’s survival. Step 4: Invest Boldly Here’s the kicker: don’t shy away from investing in these solutions. Tariff volatility isn’t a passing storm—it’s likely to linger for years. The companies that thrive will be the ones that commit now to building adaptable, future-proof systems. Why This Matters for Digital Commerce In the digital commerce game, this is make-or-break. Flexible systems let you: Stay competitive with agile pricing. Keep customers satisfied by managing expectations. Protect profitability even when the market’s a mess. IIt’s not just about weathering the storm—it’s about coming out stronger and more agile. What’s your take? How are you adapting to this tariff rollercoaster? Let’s swap ideas below!

💰 AGGREGATOR CRASH: HOW SMART SELLERS WIN Amazon and e-commerce aggregators have faced significant shifts recently, and sellers need to understand these market dynamics clearly. Empire Flippers marketplace data paints a telling picture: the average revenue for online stores sold has dramatically declined—from $61,000 in 2020 to just $27,500 in 2023. This steep 55% drop reflects broader trends affecting the entire e-commerce space. This downturn aligns with broader industry insights. According to Marketplace Pulse, traditional Amazon aggregators are currently struggling, primarily due to rising interest rates and a retreat of investors from risky ventures. Investors now prioritize stable, predictable yields rather than growth potential alone. This risk aversion means fewer buyers and, consequently, lower valuations for Amazon-centric businesses. Conversely, software aggregators are thriving. These companies focus on SaaS solutions and technology platforms that support Amazon and e-commerce sellers, benefiting from subscription revenue models and lower operational risks. Quiet Light’s 2025 Amazon FBA report corroborates these findings, noting it’s unquestionably a buyer’s market now. With higher interest rates and a cautious investor mindset, sellers face tougher negotiations and reduced valuations. However, there are specific strategies Amazon sellers can employ to maximize their business value despite these challenging conditions: 1️⃣ Diversify Channels: Businesses relying solely on Amazon are less attractive now. Consider branching into Shopify, Walmart, or niche marketplaces to lower perceived risk. 2️⃣ Build Recurring Revenue Streams: Buyers place a premium on predictable revenue. Subscription services or consumable products can significantly enhance your valuation. 3️⃣ Leverage Technology and Software: Optimize operations using SaaS solutions favored by thriving software aggregators to reduce overhead and boost efficiency. 4️⃣ Improve Financial Clarity: Buyers are cautious. Clear, transparent, and professionally managed financials help mitigate perceived risks, boosting buyer confidence and valuations. 5️⃣ Enhance Branding: Strong, defensible branding with unique product differentiation makes your business less vulnerable and more appealing to buyers. Ultimately, sellers need to weigh the current lower valuations against their potential to grow further. For buyers, though, this climate presents unique opportunities to acquire robust businesses at attractive valuations. Follow my newsletter at BillionDollarSellers.com for more insights and updates like these.

𝐏𝐫𝐢𝐜𝐢𝐧𝐠 𝐢𝐬𝐧'𝐭 𝐲𝐨𝐮𝐫 𝐨𝐧𝐥𝐲 𝐥𝐞𝐯𝐞𝐫. Last month, Walmart negotiated so many discounts from Chinese suppliers that authorities in Beijing took notice (WSJ). We may not all have that kind of leverage — but it’s a clear signal: ➡️ There are savings to be had. ➡️ And now is the time to ask for them. As new tariffs roll out, brands are facing a familiar set of options: 1️⃣ Raise prices 2️⃣ Absorb the cost 3️⃣ Negotiate with suppliers 4️⃣ Negotiate with retail partners None of them are easy — but some are better than others, depending on your category, margins, and market position. Raising prices too aggressively risks alienating a consumer who’s already trading down and losing the Amazon Buy Box along the way. Absorbing cost compresses margin when every dollar matters. But margin doesn’t just live in your retail price. It lives in your 𝐩𝐚𝐲𝐦𝐞𝐧𝐭 𝐭𝐞𝐫𝐦𝐬, 𝐌𝐎𝐐𝐬, 𝐥𝐞𝐚𝐝 𝐭𝐢𝐦𝐞𝐬, 𝐚𝐧𝐝 𝐜𝐨𝐧𝐭𝐫𝐚𝐜𝐭𝐬. During the 2008 recession, McKinsey found that renegotiating supplier contracts drove:  ✅ 10–15% savings on addressable spend  ✅ 3–4% reductions in total cost That’s material. And the same playbook applies here. 📌 Before you raise prices, 𝐠𝐨 𝐟𝐢𝐧𝐝 𝐭𝐡𝐞 𝐜𝐚𝐬𝐡 𝐞𝐥𝐬𝐞𝐰𝐡𝐞𝐫𝐞. 📌 And when it’s time to reprice, use real elasticity and SKU-level data — not guesswork. At Momentum Commerce, we’re helping clients model these exact scenarios: ❓ Where can you defend pricing? ❓ Where are you exposed to tariff-driven pullbacks? ❓ And where can you renegotiate margin without touching the shelf price? This is a moment to protect your base — and prepare for the rebound. #Amazon #RetailStrategy #Tariffs #Ecommerce #PricingPower