Cash on delivery is still popular with customers. Less so with e-shop owners. Although its share of total sales has decreased in recent years, it is still one of the main payment methods that no well-functioning e-shop can do without. According to a survey by the Association for Electronic Commerce (APEK), 26% of customers still prefer cash on delivery. However, cash on delivery has its pitfalls for e-shops. How should you approach it as an e-shop owner?
Customer preferences are changing. Even 10 years ago, when card payments were already commonplace in brick-and-mortar stores, cash on delivery clearly dominated online stores. As customers began to trust and use card payments more, the share of cash on delivery began to decline. However, it is still relatively high.
What are the risks of cash on delivery for an e-shop?
Unclaimed goods
For the customer, cash on delivery is canada email list very simple – the goods are sent to them immediately and they do not have to wait for the e-shop to receive payment. The problem from the e-shop’s perspective occurs at the moment of delivery. It does not matter if the customer collects their goods in a few days. The problem is if the customer does not collect the shipment at all and the goods are returned to the e-shop. For the e-shop, this means that the goods are not available for almost 14 days. If you do not have large stocks, this can be a problem. During this time, another customer may come and buy the goods in the meantime. Other pitfalls are:
Transportation costs
If the customer does not pick up the goods Cash on delivery ordered on delivery, the shipping costs are 100% borne by the e-shop . If such an order is 1 out of 100, you can handle it, but if there are 10 the dark side of seo out of 100 such shipments, it can be a significant burden on your costs.
Solution
Therefore, carefully monitor the number of uncollected shipments ordered on cash on delivery in your e-shop . Of course, also pay attention to the combination of cash on delivery in combination with a specific type of transport. You may find that cash on delivery is not cuba business directory problematic overall, but that customers using cash on delivery with a certain carrier are problematic. Therefore, it is suggested to limit the offer of cash on delivery in combination with this carrier.
However, the analysis of COD should not end at the carrier level. I recommend identifying specific, problematic customers and introducing a possible blacklist. Determine internally what level (quantity) of uncollected shipments per customer is still acceptable for you and when you will say enough and send goods to customersh from the blacklist only after prior payment for the goods.
Cash on delivery price
In addition to the combination of “payment method – carrier”, you can also influence customers’ use of cash on delivery by its price. Many e-shops use this method. By pricing the service, you simply motivate customers to use a different type of payment . Typically – bank transfer and card payment are free, cash on delivery is charged.
Charging for COD seems like a necessity, given the costs associated with it for an e-shop. If you charge the customer more for COD than the direct cost you pay to the carrier, honest customers will also help you mitigate the loss from uncollected CODs.