How To Sell Online With Cash-on-Delivery!

. 9 min read
How To Sell Online With Cash-on-Delivery!

Table of Contents:

How To Sell Online?

What Is Cash-On-Delivery?

How To Sell Online With Cash-On-Delivery?

How To Sell Online?

COVID-19 has been one of the most defining events in world history. Its impact on businesses has been profound. When it comes to e-commerce, the pandemic has forever changed the way people shop. With physical stores shut due to nationwide lockdowns, consumers turned to online shopping in urban areas for most of their needs. In these transforming times, businesses have understood the need to establish multiple touch points to increase sales and widen reach. One of these touch points must be online.

Online selling can open up new markets. You'll have the chance to cater to the younger generations (millennials and Gen-Z) who are technologically savvy. Or you could sell your product in a city you never did before. Although India is developing its digital infrastructure, many are still not convinced that it’s enough. These consumers don’t rely on online modes of payment but prefer paying in cash instead. As such, cash-on-delivery (COD) is still a popular payment option today.

Whether you're a new business or a veteran in your industry, now may be the perfect time to start indulging in e-commerce. Here's a guide to give you an extensive overview of how to sell online with the COD option.

What Is Cash-On-Delivery?

Cash-on-delivery (COD) is a type of online payment transaction. The buyer purchases a product from the seller and pays for it in cash once delivered to the buyer. Customers tend to prefer COD as it's less risky. There's no chance of losing money or chances of online fraud. These are the benefits of cash on delivery for the consumer.

But that's not it. There are a few more steps that take place in between that complete the transaction.

  1. Seller receives an order for a particular product. After this, the product is prepared for shipping. The invoice for the product with the buyer's details is attached to the package.
  2. The seller then hands over the packaged product to their logistics partner. The logistics partner is now in charge of delivering the product to the customer and collecting the cash once delivery is done.
  3. In a COD transaction, payment is collected at the time of delivery, when the logistics partner hands over the packaged product to the buyer.
  4. These days, with rising digital transactions, COD also includes collecting payment through a debit or credit card transaction. The logistics partner may carry a card swiping machine.
  5. The logistics partner will then hand over the cash to the seller or deposit the amount digitally in the seller's bank account.
  6. If the seller is providing services, the seller or his employee will deliver the service themselves to the customer. On completion of the service, the buyer will complete the COD payment. In service delivery, cash is handed over by the buyer directly to the seller. An example of a service e-commerce business would be Urban Company (formerly known as Urban Clap).
Toy forklift hold letter block D to complete word COD
What Is Cash On Delivery?

How To Sell Online With Cash-On-Delivery?

Here are some simple steps to guide you in setting up your e-commerce business.

Step 1: What to Sell

The first and foremost step is to decide what you want to sell – if it's a product or service. Generally, there are very few online businesses that sell services for COD payment.

Your product may be from any of the categories:

  • Apparel
  • Electronics
  • FMCG
  • Medicines
  • Home Décor and Furnishing
  • Food

And the list goes on. It may happen that you are selling products from multiple categories but only want to take one of them online. Make a decision on which product it is that you want to sell online.

Step 2: Select a Platform

Where to sell online is the next decision you need to take. You can choose to sell via your website, social media account or through a marketplace.

1. Marketplace

Selling through marketplaces is big. Often, small businesses will sell through these platforms since they don't need to worry about marketing. As per Digital Commerce 360, marketplaces accounted for 58% of total global sales in 2019. That's a considerable number which only continues to rise. If you're invested in wholly selling your products online or in the initial stages where you can't set up your website, choosing a marketplace is a good option.

Marketplaces available in India include Amazon, Flipkart, eBay, Myntra, Paytm, IndiaMART, and more. Check out all of these brands' seller programs. See which one offers you the best for what you need right now. Amazon and Flipkart are generally preferred choices. But if you're selling apparel, Myntra may be the better option.

2. Direct-to-Consumer Website

If you wish to sell through your website, you need to purchase a domain name suitable for your business. You must host this domain name through a web hosting company. Examples of web hosting companies would be GoDaddy, Blue-host, HostGator, and the like.

The next thing to do is strategising content for the website. The information must be relevant and induce sales. A professional web designer and developer will help you build the website and maintain it. Once your website is live, you can start selling your products. Several businesses sell through direct-to-consumer websites, such as H&M and McDonald's.

Having your own e-commerce website is a good option. In fact, in the last year, more brands have started selling through their websites. According to Uni-commerce, growth in order volumes year-on-year was 77%!

3. Social Media

2020 brought significant changes in the way business was conducted online. One of these changes was the growth of Social Media, especially Facebook and Instagram, as platforms for businesses to sell their products. Thrift stores, handicrafts, apparel, beauty products, candles are only some of the products being sold through social media today. If you don't have the resources to sell through a marketplace or your own website, social media is a viable platform for online business.

Deciding on a platform will give you a better understanding of how to sell products online.

Step 3: Marketing of Products

Marketplaces, as mentioned earlier, usually handle the marketing of the products themselves. Some marketplaces like Amazon even provide third-party services that help grow your business on their platform.

When it comes to marketing your own website, you need to be more involved. First, you must hire the services of an SEO manager. He or she will work towards increasing organic traffic to your website and converting leads. You could also market yourself through social media.

For businesses that are already selling through social media, marketing and selling through the platform happen simultaneously.

If you're still unsure about how to sell things online by marketing them through these channels, get a digital marketing agency on board. They will generally provide SEO and social media marketing services. Some agencies will even help you with website development and maintenance.

Step 4: Order Collection

Customers may place orders differently depending on the platform you're selling through.

If it's a marketplace, orders will be placed on the platform and relayed to you. If it's through your website, customers will place orders on the website. And if it's social media, customers may place orders through direct messaging, Google Forms, WhatsApp, or Email.

Step 5: Delivery of Products

Once your orders come in, you will need to enlist the help of a logistics partner to deliver your product to the customer.

Marketplaces typically handle logistics, so you don't need to have another delivery partner on board. Everything, from the time the order is placed to delivery, is taken care of by the marketplace.

If you're running your business through a direct-to-consumer website or social media, you may get in touch with logistics services such as DHL, Blue Dart, FedX, etc., to complete the delivery for you.

Man calculating amounts on calculator
Ways To Sell Online

Step 6: Collection of Payment

Once the customer receives the product and is satisfied, they will make the payment in cash or digitally to the delivery partner. The logistics partner will then transfer the amount for all deliveries completed within a particular month. The partner may also deduct charges for their services before transferring the amount to the seller.

In Conclusion

The e-commerce market in India continues to grow as consumer behaviour, and lifestyles change. Many businesses have realised the importance of being visible and selling online. Digital transformation is critical to a business's success today. If you want to be one of the successful brands in the post-pandemic era, follow these online selling tips and grow your business.

Also Read:

1) How to Begin an Online Startup in the Field of Clothing Line?
2) Should a Small Business Go Online?
3) How Can I Grow My Online Business?
4) What are Good Ways to Start an Online Jewellery Store?

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Ans. According to a recent survey by Nielsen, more than 80% of Indians prefer COD over other modes of payment. COD eliminates the fear of scams and eases transactions. There’s also a sense of familiarity compared to digital payments, as not everyone is digitally savvy.

Q. Why should I, as a seller, offer COD?

Ans. Firstly, COD is the most preferred mode of payment by Indians. Secondly, it helps build trust among customers. As a brand, you’ll be known for fulfilling orders first and then accepting payment. This practice will go a long way in increasing customer loyalty.

Q. How can I manage finances better since recording cash transactions can be difficult?

Ans. Managing finances need not be a dreaded practice for you. There are several free software and applications available online that can help you. For instance, OkCredit is a digital ledger app that will help you record credit or payment transactions all across India.

Q. Why should I take my business online?

Ans. COVID-19 has changed the business ecosystem. Customers now prefer making a purchase online as it’s convenient and safer. Your competitors are, in all likelihood, already selling online or are in the process of doing so. In these challenging times, staying ahead of the digital transformation curve is essential.

Q. What products can I sell online?

Ans. The ease of doing business online today is incomparable. You can sell any product you want, provided there is a demand for it. It’s essential to provide products that serve relevant needs. You could sell planners, stationery, laptop covers, scented candles, soaps, and anything people are willing to purchase given the current changes in lifestyle.