Explain why companies with high return rates generally do poorly.

Financing new ventures chapter 3 – unique cash flow and risk dynamics

Companies with high return rates tend to do poorly because they are not able to convert potential customers into actual purchasers. This leads to lost revenue, as the company is unable to capitalize on the opportunity of selling its products or services. Additionally, having a high return rate often indicates that there may be some issue with the product itself such as inadequate quality control or incorrect sizing/shipping information which can lead to customer dissatisfaction and negative reviews—ultimately damaging a business’s reputation.

Furthermore, companies with high return rates may also have difficulty managing their inventory efficiently due to discrepancies between supply and demand. This can create delays in restocking shelves which can in turn cause consumers to shop elsewhere for their needs—leading to further losses in profits.

Overall then it appears clear that while returns normal part any retail operation when number becomes too large must take steps ensure doesn’t spiral out control . By properly assessing current situation able identify root causes implement solutions order get back track otherwise risk losing significant portion earnings long run moving forward.