EMPERIO Marketing Lab
All worked cases

Reduce returns for Jaipur apparel

Jaipur, Rajasthan · Fictional practice case

The decision

An online seller ships 2,000 orders at ₹1,000 and refunds 400. Variable cost is ₹580 on all shipped units. A size-guide pilot is expected to reduce refunds by 80, with an additional ₹30,000 fixed implementation cost.

Is the size-guide change worth rolling out?

Worked solution

Reveal the visual and solution
Case at a glance
Baseline · ₹4.4 lakh contribution. 80 avoided refunds · ₹80,000 recovered revenue. ₹50,000 gain after implementation
  1. Baseline retained revenue is ₹16 lakh and shipped variable cost is ₹11.6 lakh. This yields ₹4.4 lakh before acquisition and fixed costs.
  2. At unchanged shipments and costs, 80 avoided refunds increase revenue by ₹80,000. Less implementation, the modeled gain is ₹50,000, before any avoided reverse-logistics costs.
  3. Compare by size and product, and verify that conversion does not fall. Use the settled returns window before attributing improvement.

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