The scope of the consumer electronics industry is huge and accounts for $200 billion in sales every year, according to the Consumer Electronics Association.
However, some of the industry’s profits disappear.
Each year, consumers return about 15 percent, or $30 billion, worth of consumer electronics, primarily because of product frustration or buyers’ remorse, according to a report by OnProcess Technology.
Retailers and manufacturers can make the best of this bad situation by offsetting some of these return losses and recouping about half of their lost sales. They do this by refurbishing returned products and reselling them to customers in the secondary market.
A problem outside of product returns occurs as product travels from the point of manufacturing to the point of sale. Unsellable loads account for 1 percent of all the loads shipped, which is $2 billion in the consumer electronics industry, according to industry studies of unsellable consumer products and our own experience. While the industry can do little to change the buying behaviors of consumers who choose to return product, they can change a part of their own internal process to address a less visible profit drain.
Half of this 1 percent, or $1 billion, accounts for loads that have been damaged during transportation. Of this $1 billion, $500 million is from ineffective stretch wrapping, which results in load failure. While load failure is often accepted as a cost of doing business, damage is significant and much of it’s avoidable unlike buyers’ remorse and product frustration.
If companies follow steps – e.g. checking Containment Force – to improve their stretch wrapping process, they can actually get back at least 50 percent of the loads that had been lost to ineffective stretch wrapping.
Many things in life are outside of our control, especially the behavior of other people. Instead, focus on the things that can be managed. Recovering $250 million is one of them.
If you’re not sure of the right way to reduce your damage, just follow our guidelines in Lantech's 10 Step Process to Reduce Damage Through More Effective Stretch Wrapping.
For more information, you can contact us on our website or call us at (502) 815-9109.
This post was published on October 22, 2014 and updated on July 20, 2015.