NO CASH On DELIVERY: Here are the RESULTS of My E-Commerce Experiment!

07 Sep NO CASH On DELIVERY: Here are the RESULTS of My E-Commerce Experiment!

CASH On DELIVERY (COD) to me is a double edged sword. You can’t IGNORE it, and yet when you use COD, it ends up putting a BIG hole in your pocket.

Although, the number of customers increase thanks to Cash on Delivery Payment Option… here are a few things I noticed.

1) The Refund Requests is relatively higher from COD Customers compared to customers who pay online.

2) COD customers need more management, thus more employees and Customer Support Time.

3) This was an observation which was later verified with data – COD customers generally tend to be more RUDE with the Customer Support and in general compared to Customers that pay online. Of course, it’s subjective to an extent. I’m a COD customer myself. But I hope you can see the point here.

4) As an extension to the 3rd point, the Attrition Rate in the Phone Support is higher (Which is mostly Virtual in my company). Thus adding to the Stress Levels.

5) And lastly, the negative reviews or the Threat of Negative Reviews (most times customers aren’t home to accept the order) is higher from COD customers.

Given all these factors, I recently decided to get rid of the COD option.

Here is what actually happened:

1) My sales dropped by over 60%.

2) My CPA went HIGH.

3) The refund rate dramatically decreased.

4) My net profit went up drastically.

5) My Stress levels were almost down to ZERO.

6) I needed less staff and the team was happier in general.

So to conclude: If you run an E-Commerce Store in India, doing away with COD is something you should test.

Here’s a detailed video I created sharing the results of this E-Commerce experiment.

Warning: My suggestion is my personal opinion and not a prescription. If you are losing money with COD, if you are stressed all the time… Then it’s a worth while option to test getting rid of COD.

You may lose out on a lot of sales. But you would be happier and will actually take home more MONEY because your net profit will be higher.

Note: If you plan to have investors on-board, then please don’t test this option out. A BIG Revenue (Top Line) is what you need to show your investors… So the volume of sales is important and COD plays a BIG role in getting more sales.