Cash On Delivery : Advantages and Disadvantages and Why is it Working Best in India.

Advantages and Disadvantages of Cash on delivery

Cash On Delivery (COD) is currently one of the most popular mode of payments among Indian online websites. If we analyze, one of the major reason for its popularity is that the buyers do not have to pay anything before the goods are delivered to them. This option helps new buyers in giving some confidence to as e-commerce is still a growing concept in India which is fairly nascent at this stage.

Major reasons why COD is  most popular in India

1. Lack of Payment Options

Payment Options

The majority of India’s population either does not have a Debit or Credit card and the ones that do, do not use it so much for online transactions. Debit Cards are basically used to withdraw cash from ATMs but not for online transactions. Therefore COD is the best means where an e-commerce seller can reach out to buyers even if they don’t have means to make an online payment.

2. Product Condition and Satisfaction

Delivered product is not similar to ordered product

If you notice, there have been so many cases where you order something but you get something else.  Those cases, it just makes the process of the online shopping experience is very painful. On the contrary, if  you had paid online, you’ll have to initiate refunds which again takes some more time. Moreover, Indians prefer to physically look at the product before paying, this feel and touch of the product is something that we buy. These circumstances, COD comes as a good option for buyers to actually check the product before paying for it.

3. Competition

Stay updated with the market trends

With so many new e-commerce companies are popping up,  COD  offerings is a great way to have an advantage over the competition. If we can say in general, Basically it’s the difference between life and death for many of the small businesses.

4. Scam Scare!

Avoid scam

With booming e-commerce industry, the trust for online shopping and e-commerce business has been increasing in India but many of buyers still fear using new e-commerce companies and fear that they’ll be scammed.

5. Buyer's Mindset

People love to pay after product delivery.

Like it was mentioned, Indians love to have the ability to see, feel and touch things that they are going to buy. Everyone have a similar expectations when they buy online as well. If it wasn’t for COD, people would still walk into a store so as to meet this criterion.

With this, we clearly know COD is very beneficial for online buyers and fairly enough for sellers as well. But it does come at a price to the sellers too.

Pros for Sellers

1. Amazing Marketing Strategy
By now most of the online sellers also know that Indians have extreme preference for Cash On Delivery and are now using that as way of making themselves popular within the Indian market. Statistics disclose that online stores that provide COD have more customers than those that don’t. So, it definitely is a great way to market yourself especially if you are new to this space.

India has more COD customer

2. It Gains Trust

With current trends Indians have more trust for those e-commerce companies that offer the option of Cash On Delivery. eCommerce  Sellers also get the option to impress their customers and achieve trust in return. This, in fact, helps them build a good relationship with their customers.

COD gain trust

Cons for Sellers

1.The Risk of Returns

  Risk of return is more through online payment

COD shipments also comes as a loss for sellers when customers suddenly change their mind and do not want to purchase the product anymore. In many cases, the seller would have already shipped the item and the customer would drop the order when the parcel is at their door. In such cases, sellers face losses because of costs incurred during the logistic operations.

2.Fear of COD Amount Loss

                                                             Loss for ecommerce sellers

The agents handling delivery usually have a lot of cash to handle. A lot of security and legal formalities have to be done to insure yourself from theft if you are a seller.

Its most advised to use e-Commerce Shipping Platforms like who offer a wide range of Courier options for COD & Prepaid Solutions. Remittance Time would be Weekly Twice for your COD Orders.


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