How to Do Online Cash on Delivery: The Complete Guide

Cash on delivery (COD) is a great way to maximize sales for your ecommerce business since it provides a lot of super-useful benefits to customers.

• Reduces fraud and ‘money scam’ risk

• Available for those not owning a credit card

• Paying after receiving (and testing) the product

Plus, more than 60% of online purchases use the Cash On Delivery (COD) method to make payments. If you aren’t using it already, you’re leaving a lot of money on the table.

Let’s change this now and supercharge your sales.

In this post, you’ll discover everything about online COD and how to use it with your business.

What Is Cash on Delivery?

Cash on delivery or cash on demand is a payment method in which customers pay for shipped goods at the time of delivery.

If the customer doesn’t want to pay for the items, they go back to the retailer.

This is a bit risky for the ecommerce company since you’re paying for the shipping upfront, and if the customer won’t buy it, you’ll lose this money.

The sale isn’t final until the goods have been delivered and the customer has paid for them.

Cash on Delivery vs. Cash in Advance

These two payment options are quite the opposite.

With COD, you, as an ecommerce business, carry the costs and risks associated with shipping products without a guarantee that the customer will buy them. The customer places an order without committing to the purchase.

With cash-in-advance payments, customers pay for items before they receive them.

In most instances, customers still have the option to return items if they’re not satisfied with them. The key difference is that the merchant doesn’t ship the goods until they’ve been paid for.

How Does Cash on Delivery Work?

Here’s a step-by-step process of how cash on delivery works for ecommerce businesses.

1. Customer places an order: The first step is a customer placing an order and selecting a “cash on delivery” as a payment option.

2. You ship the goods: You ship the order to customers, covering all costs associated with it.

3. Customer receives the shipment: When a customer receives the shipment, they either pay for it immediately or have a time limit during which they need to decide which items to keep and pay for.

If the customer doesn’t want to keep the items, they can return them to the merchant without paying a penny for them.

Why Use Cash on Delivery?

Cash on delivery can greatly enhance the profitability of your ecommerce business. Here are the top reasons to consider adding COD as a payment option.

#1: Increased Conversion Rate

COD can have a positive impact on your conversion rate and overall profitability by making customers feel safer – and minimizing their risk of losing money.

Plus, since there is no prepayment, customers can buy more easily and with less hesitation.

#2: Attract a Huge Customer Base

The cash-on-delivery service is definitely more accessible for use by customers than cards or online means of payment. Not everybody has a card at hand or access to any online payment portals.

…which means you increase the number of customers who can actually buy.

#3: Increases Business Credibility

Cash on delivery option automatically increases the credibility of your ecommerce business. It signals to customers that you’re willing to send the goods for FREE, and they can pay only after they receive them and are satisfied with them.

This helps make it easier for customers to trust a brand and make purchases.

The Most Popular Payment Methods for COD

There are multiple ways you can collect payment for your goods from customers. Here are the most popular ones out there – these are the golden standard.

#1: Mobile Payments

This method relies on a postal worker or a courier to have a mobile card reader with which they can process payments for delivered goods immediately.

Although it can be used with ecommerce, it’s usually used with a restaurant or on-demand services.

#2: Cash

Your customers can also pay with cash directly to the courier.

And while this method may be easier for them, it carries a significant risk of making the courier a target for crime – and losing your business a lot of money.

#3: Online Card Payments

If you want to give customers several days to decide whether or not they want to keep products, online card payments are the best option for all parties involved.

Conclusion – Ready to Start Using Cash on Delivery With Your Ecommerce Business?

Cash on delivery is a super-easy way to make your business more profitable and maximize sales and the customer base.

It has a lot of advantages, including:

• NO money scams

• Available for those not owning a credit card

• Paying after receiving (and testing) the product

…and adding it to your business is very easy to – you just need to use a payment gateway that supports this payment option.

There are a lot of gateways you can choose from, like PayPal or Stripe.

However, to make the most out of this, you need to find a way to organize your orders, shipments, and customer payments. And that’s what we can provide you with…

Konnektive CRM is the best CRM solution on the market, allowing you to save all customer data in one place, segment your audience, and make data-driven decisions. That way, you can get ahead faster, maximize customer satisfaction, and get more sales.

Our platform is the most secure and customizable CRM tool out there – so you can create everything the way you desire while keeping your customer data safe. If you’re looking to 2X or even 3X your conversion rate without any additional work, this is for you.

Book a demo with us today and DOUBLE your sales now.