Does Cash On Delivery….confirms your success..e-commerce guide.

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E commerce is growing at a fast pace in India

Here are few facts..

– 3600 Rs crore of the E-Retailing industry in 2011.
-38 million , number of transaction users on the internet by 2015, which is presently 10 million.
-376 million estimated number of internet users in India by 2015

For more trends follow our earlier article: http://techaloo.com/e-commerce-trends-in-india-in-2011/

There are 6500+ E-commerce companies in India, but less than 5% are providing Cash On delivery(COD) facility….What are the problems are they facing for implementing COD on their products.When I purchased my first book through e-commerce , I preferred Flipkart because they had COD System.

Why COD is so demanding in India??
They are few reasons which makes this option most demanding.
-It provides security of delivery to the customer.
-No. of credit card holders are very less in India, and we also refrain to provide our bank details.

If a large no. of customers are demanding then why companies are not adopting it??Even Flipkart has removed its COD option for few cities in India.

1.It’s cost- Facility doesn’t come free…..COD also costs.
Generally courier companies charge a huge amount for this service.for example two major courier giants “Bluedart” and “Aramax” charge upto 50 INR per delivery (+1-2% extra charge). In this competitive world of e-commerce customer don’t want to pay extra money on their delivery. Result, this cuts off the merchant’s profit.Though this charge is comparable to credit card charges.

2.Customer often place order just to check the e-commerce site or for a nuisance:
Sometimes situation arises when we don’t place a firm order
Some ecommerce companies claim their return rate to be 10% and few claim it to 60%. According to Blue dart, the average return rate is around 40%.
The courier companies also charge shipment charges on returned articles.
This situation is very costly to a small e-commerce site which has less transactions per day.
Along with this nuisance view, their may be few practical problems for this returning of articles….such as “My wife didn’t like the article”, “I was not at room,and my roommate returned the product”, “I didn’t have money at the time of delivery….”. Whatever may be the reason , but it is surely a problem for merchant.

Few Merchants have also come up with solutions to this problem…

Few vendors have started a confirmation call system before delivering the product. In this solution they call the customer to confirm their order.

Few others have started their local personnel to courier the data in major cities.

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Mohit Bansal(23) is B.Tech in Electronics and Communication Engineering from Indian School of Mines, Dhanbad, India. He has interest in business and entrepreneurship and has published couple of research articles. He is also associated with various NGOs. He is with Techaloo when it was just in concept stage. The Techaloo site was not existing even then. Currently Mohit is working with Mu Sigma as a Business Analyst Profile.

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