Does SILCA not offer refunds?

[Mark McM]

Originally Posted by rice rocket

They have already decided to have their own storefront setup, the fact that it exists would signal (to me) that the 20-30% they're giving up to Amazon is more than the overhead to hold and ship that part, but maybe I'm wrong.

If what you claim is true, then they should just post a link to their Amazon store and shut down their own store and let them handle it all...

There is no doubt that Silca makes more profit by direct sales then they do through Amazon. But if you understand the concept of Marginal Profit, then you can see that even if the costs of selling through Amazon are higher, then as long as they still make some profit it is still worth selling through Amazon.

Like many companies, Silca has a multi-mode distribution model. In addition to direct sales through their web page, they also sell through Amazon and other web retailers (Backcountry, Performance bike, etc), plus through tradition channels including distributors and brick-and-mortar retailers. Just doing one sales channel or the other won't reach as wide a customer base, so even if some sales channels aren't as profitable as others, as long as there is good marginal profit it is worthwhile.

[rice rocket]

Originally Posted by Mark McM

There is no doubt that Silca makes more profit by direct sales then they do through Amazon. But if you understand the concept of Marginal Profit, then you can see that even if the costs of selling through Amazon are higher, then as long as they still make some profit it is still worth selling through Amazon.

Like many companies, Silca has a multi-mode distribution model. In addition to direct sales through their web page, they also sell through Amazon and other web retailers (Backcountry, Performance bike, etc), plus through tradition channels including distributors and brick-and-mortar retailers. Just doing one sales channel or the other won't reach as wide a customer base, so even if some sales channels aren't as profitable as others, as long as there is good marginal profit it is worthwhile.

Right. So back to the original question.

Originally Posted by rice rocket

Why not offer the same return policy and not lose the margin to Amazon?

Distribution and access makes total sense. Putting your direct sales channel at a disadvantage does not.

[Mark McM]

Originally Posted by rice rocket

Right. So back to the original question.

Distribution and access makes total sense. Putting your direct sales channel at a disadvantage does not.

Is the direct channel at a disadvantage though? Each offers different perks. Amazon offers free returns, while Silca's web page offers loyalty points (which are effectively worth a 5% savings). If the consumer knows what they want, then it is to the consumer's advantage to order directly through Silca.

[pasadena]

Why don't you guys just contact Silca and ask them.

[nmrt]

I will. Since they will not open until Monday, I was hoping the Paceline could shed some personal return/refund experience with SILCA.

[rice rocket]

Originally Posted by pasadena

Why don't you guys just contact Silca and ask them.

Why? I'd rather have Mark mansplain to me.

[oldpotatoe]

Originally Posted by Nomadmax

So basically, if you buy an Allen wrench and seat bag from Silca for $340.00 and don't like them; they'll give you a $340.00 gift card to use toward a chain breaker and cycling wallet that costs $540.00

Got it

"Gift cards' are an interesting gig...most 'gift crds' are not emptied...so the issuer/seller sees an additional 'profit'. Issues/sells a gift card for $200...$180 used, type gig.
One of the big 'selling points' when I tried the gift card 'scheme' in the shop.

[pdmtong]

If I was uncertain about a product I wouldn’t buy it unless I as able to get a full refund.

As for Amazon - prime shipping and easy return via Whole Foods is very convenient. We aren’t rampant consumers so the truck only comes occasionally

[RoosterCogset]

Originally Posted by Wakatel_Luum

My policy is don’t buy from Amazon (Bezos) at all so no need for a refund. ������

Don’t buy direct from Silca so you possibly get a better refund return policy from your alternative retailer?

So, actually according to product listing from the Silca storefront, you are buying from Silca, Amazon is just shipping the item and will process returns if need be.

[RoosterCogset]

Originally Posted by rice rocket

Right. So back to the original question.



Distribution and access makes total sense. Putting your direct sales channel at a disadvantage does not.

Not sure if you looked at the link I provided. It looks like Amazon only charges $40 per month, for unlimited unit sales through them. Plus they charge about $5 per item but that covers storage, shipping and returns. Just the shipping probably saves a lot of sellers money, as Amazon probably has the lowest negotiated UPS/USPS rates of any shipper in the country.

What do you feel about how much the LBS/dealers channel is threatening Silca's direct channel? You think Silca offers their dealers a lower price than selling direct? Of course, and if you consider this as 'losing money' it's a lot more than Amazon is taking.

[RoosterCogset]

Originally Posted by Mark McM

There is no doubt that Silca makes more profit by direct sales then they do through Amazon.

I think there is doubt actually. If they sell 1,000 items a month through Amazon, the cost to Silca comes to $40/1000 = $.04/unit. Checking a random item (small seatbag), shipping from Silca is $10 (passed to consumer). Silca would be paying Amazon $5 for the same.

Now as to direct sales they need to staff and operate their own fulfillment center. Maintain inventory and link it to their own website, etc. Is the $10 shipping they charge really covering their cost?

Certainly they also offer consumers free shipping when over $100 in purchase. However they still have to pay someone for the shipping. With Amazon, it's still the average ~$5 expense that Amazon charges Silca.

[ryker]

One reason for issuing refunds in the form of gift cards is increasing credit card fees. A merchant pays 3-5% for the privilege of accepting credit cards and these fees are not refunded to the merchant when a customer returns an item. If you are a merchant not subject to this policy, enjoy it while it lasts.

[tctyres]

joshatsilca is a member here. He will know the answer to the question.

[jpritchet74]

I have had a refund from them in the past. It was about 4 years ago though - not sure if their policy has changed.

[joshatsilca]

Sorry to be so slow getting back on this, I've been in Africa for a few weeks with zero communication to outside world.. amazing trip, but wow, the digging out of email and everything else has been pretty wild!!

Not sure if anybody else here is in a consumer products business, and if you are please chime in with your experience with both Amazon and consumer returns.

First, selling on Amazon. We tried to avoid Amazon for some years but the reality is that they will not even talk to you about fraud, counterfeit products, trademark infringement, etc unless you are a high level seller. Back in 2015 we had Chinese companies selling 'SILCA' pumps and such on the site using our brand and product names but with pseudo counterfeit merchandise. Amazon would not even discuss this with us and told us the only way to fight it was to be a seller in good standard. Once we became a seller in good standard, they killed all of those products and infringers. In the mean time we also noticed some interesting trends, mainly that small items sell way better on Amazon and let's be honest, who wants to buy an inner tube from us and pay shipping when you can add it to your order of toilet paper and other stuff.. and we get reports of what people have in their carts and the amount of product that gets sold into orders of other daily necessities is really crazy. My sales manager jokes that people hide their big ticket items using their PayPal 'slush fund' and hide their small item purchases in with the toilet paper and laundry detergent, and the data would suggest that both are absolutely true!

Let's start with how Amazon works. There is a ~$50 monthly fee and then they take 12-15% and the seller pays shipping for Prime items. Where this really works in the favor of a company is that Amazon practically ships things for free. So you have noticed that we charge $9.95 for shipping under $100 and free shipping over $100, this has become pretty standard in e-commerce. The reality is that at our size we average around $16 for a small package and $29 per pump to ship. So while it feels crazy as a consumer to pay us $10 to ship a $65 set of hex keys, the reality is that it costs us (from SILCA) $17 to ship those to most of the country and $19-20 to ship to west coast or Florida, so you hate paying $10 in shipping but we're still subsidizing that by another $7-9. Whereas with Amazon, we only pay around $3 to ship that same item because Amazon gets like 96% discounts with the major carriers and then contracts the last mile to other firms. So on average we lose $6-7 per shipment on small items and $16-30 per shipment on larger shipments when we ship from our webstore. While we may only lose $3-10 per shipment when Amazon ships it, so the shipping savings actually helps (sometimes dramatically) offset the Amazon 12-15% commission. So for us, Amazon is a great place to sell small items and 90% of what we sell there are items under $50.

So let's get to refunds, and this is where Amazon has in one sense, completely ruined the market and we're all paying the price, yet you also can't do anything to them as they have unprecedented market power and control. Amazon has created a culture of not only unlimited and unquestioned returns, but that has led to unprecedented fraudulent and other bad behaviors. 7 years ago when we started the new SILCA, we never once had a fraudulent return and our policies were as permissive as possible as we were so focused on the customer experience. Unfortunately, we are now in a place where roughly 20-25% of returns could be considered fraudulent or at best pushing the boundaries of acceptable behavior and we've had to put policies in place to try and mitigate this as it has become a massive expense.

So what do I mean by fraudulent or bad behavior? Nearly half of our Amazon returns (and remember we really only sell small items on Amazon..) will be either some other company's product in our packaging, or will be used, crashed, damaged, etc and are returned to Amazon using one of the 'defective' codes. So not a week goes by where somebody doesn't return a set of Ti bottle cages that have had some 10 year old crappy cage re-attached to our packaging, nearly every latex tube return has a punctured butyl tube in the box!.. and Amazon has refunded the customer already and provided them free return shipping! So the 'customer' has mostly gotten away with this, but where Amazon makes this palatable is that when we receive the fraudulent item back, we document the fraud and Amazon will make us whole, essentially they cover pretty much the entire cost of the fraud. They also tell us that they've instituted a '3 strikes' policy where they will kick people off of the service for doing this 3 times, but that's another story.

So what has this meant for SILCA? Well, starting a few years ago we also started receiving wrong, used, damaged items back within our 30 day return policy. I kid you not, people will literally buy a seat bag, put a 3 year old one, or even one of another brand in the package and return it, same with latex tubes, ti cages, etc. We've had people return chain wax having replaced the wax with other substances, chain lube is replaced with milk, t-shirts with unimaginable pit stains, people will buy a pump, take replacement parts from it and send it back with 4-5 parts missing!! As a result, we are unable to resell pretty much anything that is returned, AND we spend hours every week opening, inspecting, trying to determine why somebody may have sent a product back and what they may have done to it, some of it gets donated to a local junior team, but most of it has to be thrown out.

And this isn't just us, you might have noticed articles post holiday season this year about how companies like Kohl's and Target are drowning in return volume, much of it fraudulent. Companies like REI and LL Bean have also completely revamped their 'no questions asked' policies to be much more like what we have in place now.

Note, everything we are talking about here is NOT about Warranty service.. I sincerely believe we've built a phenomenal customer service team to handle real issues: Martha and Travis. These two get Christmas cards from customers who've had warranty problems or the like or whom they've helped trouble shoot a repair, and I think that most anybody who's had a warranty or real problem with a SILCA product has come out of that feeling pretty good. Our customer service software uses an AI to measure sentiment and tells me that our positive sentiment is 97+% for customer service interactions, that's more than 20% higher than average for sporting goods industry customer service where pretty much anybody contacting you is initially doing so because of a problem, and when there is a legitimate problem we do whatever it takes to make it right. Of course, there will always be some percentage of people for whom we can't make it right and in those cases it just isn't the right product/customer fit and we strive to be as fair as possible when both parties part ways. However, this whole topic is NOT about warranty items, it's about customers wanting to return items for unspecified reasons.

The policy of returning for store credit has been extremely successful in reducing fraudulent returns and also gives us some recourse if the return is fraudulent as it is easy to cancel store credit if the return is fraudulent, this policy has almost eliminated the most common form of this behavior where somebody buys a new version of an old, worn out thing, and then returns the old worn out thing, though we still have quite a few folks who think we must be so big that nobody will notice that tools are removed from the T-Ratchet kit or that Synergetic is not used motor oil

We are one of the few companies that has a warm body answering the phone when you call.. no phone tree, no 'press 4' for customer service, or hold music.. you call, we answer, and same with email, no bots, or pre-canned responses, you will get a real live person using their real name responding to your request. If you have a real issue, or real reason for returning an item, especially if you are a prior customer known to us (90+% of fraud comes from first or second time buyers, usually where the second purchase is identical to first occurring past the warranty period) then we are really more than happy to work with you. We had a known customer order a Richard Sachs pump last year who lost their job 2 weeks later.. they absolutely got a full refund! They also re-bought that pump a few months ago once they were comfortable in their new job. if you want to work with us, we're thrilled to work with you! Sadly, we also have to build in a little insulation to protect ourselves from those who are out to abuse the system.

I hope this helps shed a little light. I'll also say that this is not just us.. fraudulent orders and returns are a massive and growing problem in all forms of commerce in most all channels. Many of these same bad actors are also the folks railing against companies online in reviews or forums when the companies take action against them. We have an online retailer where a customer returned a very high end bike with many of the components replaced with lesser variants.. when they refused to refund the full value of the original purchase the fraudster went after them through the credit card company, the BBB, online in forums, in comment sections of reviews of the bike and brand in question, calling out the retailer by name in product reviews, etc..