6 Step Process to Sell Online with Cash-on-Delivery (2024)

By making the cash on delivery feature available you can increase the probability of a purchase being made.

Since with CoD there is no prepayment involved, customers can make purchases more easily and with less hesitation.

They can also feel safer about the purchase because they pay only once they see the product.



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. By making CoD available you automatically increase the number of customers who can actually buy from you.



Seeing the option of cash on delivery available can boost the trust customers put in your products or services.

It indicates that your customers pay for a product or service only after it has been delivered to their full satisfaction.

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



By having customers pay only after a product or service has been delivered you can help reduce the scope of online fraud.

Additionally, the cash on delivery system does not require customers to provide any financial information. This can help curb the leak of sensitive information altogether.



Using CoD requires no compulsory dependency on cards, UPIs, or any electronic modes of payment.

The cash on delivery facility is particularly useful and important for businesses working in or catering to suburban and/or rural areas.

Since much of the population in these areas do not have access to online or electronic payment methods the CoD option gives them freedom from dependency on electronic payment methods.



Apart from suburban or rural populations there are other customer segments that have access to cards but might not own one, for example, younger generations.

Providing cash on delivery feature for customers belonging to this segment will also improve your sales.

The first step to setting up and selling with cash on delivery for small business is choosing the product(s) or service(s) you want to give the CoD option on.

It may include all the products you sell or only a particular section of them, make sure you put careful thought into your choice.

Services are not usually sold on a CoD basis, but this has also been changing lately.



Once you have confirmed your product list for CoD payments you need to then decide where you want to sell your products. In this case, you have a number of options at hand.

You can choose to

• Sell via an online marketplace, e.g. Amazon or eBay

• Sell through your own Direct-to-Consumer or D2C website

• Use social media platforms like Facebook or Instagram as your online business platform.



Depending on the choice you made in the previous step you’re going to have to use some form of marketing to help sell your products or services online.

Marketplaces usually do their own marketing, but if you are using a D2C website or social media to sell you’re going to have to take a more hands-on approach.



Based on the selling channel you’ve chosen you’ll have to collect your orders from your customers.

For instance, if you sell on social media you will have to collect orders via Google forms, Direct Messages, WhatsApp, or email. If you are using a marketplace or website, again, this would be different.



After order placement and collection the next step is where you actually deliver the products your customers have ordered.

Ideally, this is when you should partner with a logistics company such as BlueDart, DHL, FedEx, and so on. Marketplaces, however, usually take care of this aspect for you.



Lastly, at the time of delivery the customers, having chosen cash on delivery service, will hand over the payable amount to the delivery executive.

If you are using a logistics partner they might deduct a delivery fee but after all deductions, the total amount will be transferred to your (the seller's) account.