In Most Cases, Why we require Advance Delivery Charges Rs: 149/- To Rs: 499/- For Cash on Delivery (COD)
Many people reject the parcel they ordered online after it gets delivered to their Doorstep. Then we had to Bare Loss of product delivery charges. Also that parcel “ON-HOLD” many days at Courier service. If the customer pays Delivery Advance then he/she confirmed that he will accept the order at delivery time. To avoid fake customers ordering online we make this policy & in some cases, we require full or partial advance payments where the order total exceeds a COD threshold or the supplier requires Pre-Payments before arranging the product…
There are multiple reasons why a customer may refuse delivery:
- The customer may have found the product locally in the meantime
- The customer may be unhappy with how long the delivery took
- The customer may simply have changed their mind about making a purchase
COD (Cash on Delivery) is the lifeline of an e-commerce business, but why did DMarket.Pk take such a decision to require some advance payment For COD? Here is why.
When we work with cash-on-delivery, there are multiple fees to be paid. First of all, we need to pay courier fees so that the courier will deliver the goods and collect the cash [we pay extra fees for payment collection], Customers are also more likely to refuse delivery and we’ll be left paying for the return, as well. cash-on-delivery orders had a 30% return rate.
To throw some more light on this, assume that delivery to the customer costs around Rs 200 per order. In case it is a COD order, there is an additional cash collection fee of Rs 80 per order. This jumps up the net delivery cost to Rs 280 for every delivered order. For the orders that did not get delivered, the delivery partner charges Rs 200 for taking it to the customer’s doorstep. But since the customer refused to accept the order, they charge Rs 100 extra to get the product back to us, which brings up the total operational cost of non-delivered orders to Rs 300. For each RTO (Return to Origin) order, thus, we earn zero and lose Rs 300!
[Advance Delivery Charges] 98.5 of every 100 orders placed will be successfully delivered to our customers.