How To Start Cash On Delivery For Small Business

COD is the acronym for Cash On Delivery, a viable dropshipping alternative to the traditional method of online product vending.

In this post, you will find out if Shopify supports a cash-on-delivery business model.

You’re aware of the dropshipping setup, in which you won’t have to maintain inventory.

You can locate a dependable supplier with a moving product, market the item, and have the supplier fulfill your customers’ orders.

With this standard dropshipping model, you do not have complete control of your merchandise.

But that isn’t the situation with COD dropshipping. You’ll need to invest in the merchandise upfront, handle the shipment yourself, and then receive payment when the customer gets the product, typically 2-5 days later.

Therefore, it would be beneficial to primarily locate suppliers that integrate COD into their dropshipping business model.

You don’t have to worry about finding suppliers that incorporate COD. In this article, we’ll introduce one before signing out.

COD-Cash On Delivery Dropshipping model

Before we dive deeper, here is a summary of what this article will discuss, giving you a heads-up.

• What’s COD?
• How COD works in dropshipping
• Merits of COD.
• Drawbacks of COD.
• COD dropshipping platform.
• What are COD elements?
• How to start Cash On Delivery using Genie Funnel

What’s COD?

COD, or Cash On Delivery, is a method of selling items online in which payment is made upon delivery rather than in advance. It is sometimes referred to as Collect-on-Delivery.

If the product sent out is not paid for, it is automatically returned to the retailer or seller.

Initially, the term COD was used solely for cash payments; however, other payment methods have become more common over the years.

Accordingly, the word ‘Collect’ has replaced the word ‘Cash’ over the period to encompass transactions made by checks, debit cards, and credit cards.

And because buyers do not have to pay for products they have not yet seen, COD significantly contributes to making e-commerce safe.

While the model has made it safer for buyers, the same cannot be said for sellers. The COD payment method is susceptible to product returns, which spells doom for the business.

The Emergence of COD

Like other e-commerce transactions, this type of payment for online purchases is identical, except for COD, where buyers only pay after receiving the product.

This way, the customer is more assured, and as for the merchants, sales figures are higher.

Imagine you live in Dubai, UAE, and want to shave your beard at home without going to a barber.

You stumble across an ad online for a remarkable electric razor, but you’re hesitant to use your credit card online.

Hence, you choose to pay upon receiving the product. You can view the product before making a payment, allowing you to receive your order faster and pay in cash.

Later in this article, we’ll examine the merits and demerits of COD, though that’s after we’ve examined how COD can integrate into dropshipping.

How COD Works In Dropshipping

It won’t work at all, from what I can see. The typical approach to dropshipping involves finding a supplier with whom you collaborate to drop-ship their products.

This means that the suppliers are ready and willing to fulfill all the orders you send after you’ve earned your profit margin.

Oops! I’m moving too fast. If you are new to dropshipping, let’s quickly go over how this business setup operates.

What’s Dropshipping?

Dropshipping is a retail fulfillment business model in which an online store does not stock merchandise; it vends it.

Instead of an inventory, you showcase photos of the product.

Whenever you sell a product, you order it from a supplier or third-party seller who handles shipment and packaging.

In other words, dropshipping means you won’t handle or see the product directly.

The bulk of the work rests on the shoulders of the third-party sellers’ suppliers.

COD+Dropshipping

Assuming that you’ve grasped how dropshipping works, let’s discuss integrating COD into the business model.

Incorporating COD into dropshipping seems challenging, given that many products drop-shipped are sourced from China’s AliExpress, which doesn’t allow COD on its platform.

To make COD plus dropshipping functional, you’ll need a reliable local supplier who sanctions dropshipping and can readily fulfill the order on your behalf.

Additionally, the supplier should agree to accept payment upon delivery and remit your proceeds upon receipt of cash from your customers.

Your income is the difference between the price you charge at your store and the price you pay to the supplier. This means you have the leeway to set your online store’s prices.

Merits of COD

In this section, we’ll discuss the advantages of Cash on Delivery and ways to increase your store’s conversion rate.

(1). The ultimate choice for customers

Since buyers must see the products they ordered before paying, cash-on-delivery is the most preferred payment method.

Customers’ payment details, such as debit or credit cards, are also protected when they make purchases.

Your online store will see an increase in conversions as people see your items or ads that offer cash on delivery.

(2). It animates impulse buying

Among the benefits of cash on delivery is that it encourages impulse purchases, as many of your customers buying your merchandise may not have initially intended to do so.

However, they become more interested and eager to purchase when they see our product ads and spot the option for payment on delivery.

The fact that they do not have to pay promptly triggers customers’ buying impulses, subsequently increasing sales and conversion rates.

(3). It Boosts the Client’s Conviction On the Seller

Additionally, customers tend to trust sellers who offer cash-on-delivery more than those with prepaid models.

Instead of committing to payment for products that may not be genuine or inspecting the item, customers feel secure buying from stores with incorporated COD, as they know exactly what they are ordering before making a payment.

These aspects motivate customers to choose cash on delivery, thereby boosting your store’s conversion rate.

(4). It Dissuades Vending Of Fake Products

As a vendor, you are discouraged from selling counterfeit or inferior goods because you know buyers will reject them.

And so, with low-quality and returned products out of the equation, buyers and sellers automatically stand to reap.

Again, because of the value gained, both the seller and the buyer relish the experience of the transaction.

(5). Return On Investment-ROI

The model allows you to mine specific product markets where the purchase or cost per conversion is lower than in competitive markets.

This allows you to make a considerable profit from a single product sale, given that both the cost per conversion and the product cost are low.

This means you pay less for Facebook ads and enjoy big profit margins on every successful product sale.

(6). Delivery Is Faster

Compared with products sold via the usual prepaid payment method, all items sold on COD are significantly faster.

The reason for the fast delivery is that suppliers who accept COD use exclusive, premium courier services.

Ideally, your merchandise will be delivered within 2-5 days, and payments will be remitted within one week, subject to the chosen courier service.

(7). No Payment Method or Payment Withheld

Pay has often proved a pain in the neck, especially in the absence of Stripe; merchants have issues globally.

But with COD, you won’t have to trouble yourself. You won’t have to worry about placing your payment on hold, facing a chargeback, or paying a transaction fee.

The processing is undertaken immediately after your customer makes the payment, and the payout is within a week.

Drawbacks of COD

There’s a reaction equally for every action, with COD payment merits as its demerits.

The main drawback is that customers can reject the product, which is bad for business.

Customers rarely make plans to pay, and they can sometimes see and dislike the product immediately.

The best way to overcome this is to vend fast-moving or high-selling products.

COD IN DEVELOPING COUNTRIES

In certain countries, COD remains the renowned alternative to normal dropshipping for web-based retailers. With this model, it’s straightforward to set up independent businesses in these locales, and customers don’t need to use credit cards.

You’ll figure that several independent firms in these countries prefer cash installments over credit installments. This way, these companies avoid the cost associated with credit cards.

Similarly, some shops with cash payment limits offer better pricing for consumers.

The bulk of drop shipping transactions in the Middle East are conducted on a COD basis, and 60% of online deals in the Middle East and the UAE are completed via COD; thus, this has prompted the emergence of dispatching enterprises that offer COD assistance.

Countries like India.COD transactions significantly boost web-based trade. COD transactions cater to buyers who prefer not to use electronic payment methods or who do not have a credit card to make a full payment for their products.

Starting Cash On Delivery with Funnel Genie

Launching a Cash-on-Delivery business is pretty straightforward. Funnel Genie offers a one-week trial, which you should test-run.

This way, you learn how the platform works and familiarize yourself with Funnel Genie.

To begin, you’ll either start with the one-week free trial or create an account.

Additionally, there is plenty of training available to help you familiarize yourself with the app on the platform.

As soon as you log in, you can pick from the Funnel Genie’s list of winning products and employ the funnel you wish to use to advertise the products.

It only takes a few clicks, and ads generate revenue as products are delivered.

Conclusion

If you are looking for an enhanced, reasonably priced alternative to normal dropshipping, COD cuts leveraging Funnel Genie are undoubtedly the way to go.

The COD platform significantly enhances drop shippers’ credibility, as payment is only made upon delivery of the product.

With numerous focal points for buyers, COD’s orders expand significantly to meet the ever-insatiable consumer needs.

You can start COD and receive weekly payments directly into your bank account, regardless of your country of origin. You won’t have to fork out tons of money on Facebook ads, as they were formerly used in countries such as the UK, the US, and Australia, among others. 

The funnel genie lends you the leverage to target countries with reasonably priced CPAs. This way, you cut costs with Facebook ads, resulting in higher profit margins.

Are you ready to start COD? Have you heard of COD, or do you have questions? Please comment below.

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