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What To Do If Processing an Order Will Lose You Money

Order processing can be complicated.  Every order has several attributes that combine to determine the total amount it costs for you to process, such as the price of the parts, weights and dimensions, pricing errors, part misclassification, shipping fees, etc.  Any of those factors can cause a discrepancy between how much the customer paid and how much it'll cost you to process and ship.  While most orders will be relatively accurate, some will come through with incorrect charges and an unfavorable discrepancy.

Instances of incorrect order amounts are usually due to one of the following:

  • Weights and dimensions were incorrect, resulting in inaccurate shipping charges
  • The customer ordered the wrong part (supersession, disontinued, etc), and the correct part costs more
  • The catalog price of a part(s) in the cart was inaccurate

In instances like these, and others where processing an order would lose you money, there are two options available to you:

 

Option A - Request the Funds and Take a Risk


You can contact the customer and attempt to collect the remaining balance.  On the lower-right side of the order, there is an "Email Customer" button.  Click it to bring up an email creator where you can ask your customer for the additional funds.

If you have to send this email to customers over and over again, try using a Canned Message to pre-fill the email subject and body.  You can read more about those by clicking here.

There are a few possible outcomes to making a request like this.

  • The customer may comply and provide you with the authorization to collect the additional necessary funds.
  • The customer may never respond, leaving you in order-processing-limbo.
  • The customer may request that the order be cancelled and the money refunded.

Whatever the outcome, this option provides you with the opportunity to collect the money that would have otherwise been lost.  However, it also means you might lose the sale by frustrating your buyer by requesting the additional charge.  One of the most important things to remember is that you haven't lost any money whatsoever until you've actually shipped something.  If you lose this sale, you only lost "potential" money, and possibly the customer's future purchases.  Until there's product out the door, your net gain and net loss is zero.

Obviously, every buyer is different, and there's no way to guarantee how anyone will react to a request for additional funds.  The possibility of frustrating a customer is real, and must be handled on a case-by-case basis.  Some dealers request funds from their buyers on every single discrepancy, (regardless of how small it may be) in an attempt to keep their books perfectly balanced.  Others will only contact the customer if the difference is significant, or if the difference eliminates profits on the order altogether.  If, how, and when you choose to contact the customer regarding discrepancies is entirely up to you and your team.

 

Option B - Ship at a Loss and Buy the Customer


If you'd rather go for the best possible customer experience regardless of cost, you can ignore the discrepancy and process the order at a loss.  Choosing this option means you'll lose money, but depending on how large the discrepancy was, you may gain the customer's loyalty for future orders.  If you successfully process the order, buyers may return to your site specifically to purchase additional parts in the future.  However, with the nature of online shopping nowadays, customers are more likely than ever to seek the best price vs remain loyal.

One way to think of it is you're "gambling on the future."  If you process an order at a loss of $50, you're choosing to "purchase" that customer's potential future orders.  The cost of that potential win is $50.  If you're willing to purchase that possibility (just like a low-yield lottery ticket), feel free to process the order.  If you're unwilling to purchase that possibility, don't process the order, and you won't lose money.

One clever way of increasing the chances of "buying" a customer's loyalty is to ship the order anyway, knowing it's at a loss, but also emailing/calling the customer to intentionally let them know they got a great deal.  Tell them of the error, tell them how much money you lost, but ship it to them anyway.  This honest human interaction will make them feel like they got a great deal, and it might make them more likely to buy from you again in the future.

Finally, if you ship an order knowing you'll lose money, RevolutionParts is not responsible for the loss of profits (per our Terms of Service section 17).  You are always welcome to bring orders to our attention if you feel there was an error, as we handle each request on a case-by-case basis.

 

 

To summarize, it's entirely up to you, your company, and your business model to determine whether or not to ship an order.  If processing and shipping an order would lose you money, there's never a simple way to handle it, because each customer is different, and each order should be handled individually.  The options listed above are the most common ways to approach situations like those.  If you ever have questions or want clarification on anything stated above, don't hesitate to reach out to us by emailing support@revolutionparts.com!

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