A failed COD delivery can create forward freight, return freight, manufacturing cost, locked inventory and wasted acquisition spend.
Key takeaways
- Forward + return freight
- COD confirmation
- Product recovery rate
- RTO-adjusted pricing
A COD order can create multiple costs when delivery fails. Understand forward shipping, return shipping, manufacturing cost and product recovery.
Understand the full RTO cost
Forward shipping, RTO shipping, production and marketing may all be affected.
Measure by segment
Track product, pincode, order value, channel and customer history instead of only one overall percentage.
Confirm selected risky orders
WhatsApp or phone confirmation can be useful for some COD orders.
Encourage prepaid where it helps
Small prepaid incentives can improve economics when COD risk is high.
Track product recovery
Know whether returned products are resellable, reusable or effectively lost.
Price using expected loss
A profitable price should reflect the actual mix of delivered, returned and RTO orders.
Action checklist
- Forward + return freight
- COD confirmation
- Product recovery rate
- RTO-adjusted pricing
