Aayush Poddar .

Hey guys!
Question-
In E-commerce for COD orders, the shipping costs seem to be double than the regular cost using DTDC/ Delhivery, etc.
Is it supposed to be that way?

Originally Posted Here
10 Comments

Mohamed Amar

Yes. The cost of handling cash, the time taken per delivery increases leading to increased costs

Aayush Poddar

Ofcourse. But my understanding is the shipping cost doesn’t cover this. Or does it?
a) Shipping cost
b) Handling costs etc.
So does the shipping cost for COD items include both a and b already?

Mohamed Amar

No, you have to separate the individual components. Shipping doesn't consider COD handling costs

Kshitij Patil

Yup. There are a couple of reasons for it.
- Handling cash comes with an inherent risk to all stakeholders.
- Handling cash increases the TAT for each completed delivery.
- Handling Cash/Card on Delivery also needs some additional investment in H/W & S/W for recording and reconciliation
- In the current situation, it also makes the delivery a little unsafe (which is why many logistics companies have ceased/limited it)
- Overall it's an added convenience & conversion which attracts a larger cost to the business.

Mohamed Amar

Correct. Although moving to cashless transactions comes with its own cost (visa/mastercard costs) . The benefits of quicker shipping however imo outweighs the costs of cashless transactions

Kshitij Patil

The cost to cashless is miniscule. How does a cash transaction lead to quicker shipping exactly?

Mohamed Amar

It doesn't. I was saying cashless transactions speeds up shipping. The cost of cashless transactions would depend on the percentage agreement with the payment companies

Vishnu Goyal

One is shipping cost which is based on zone (A-E) and then comes COD
If the packet is delivered it's shipping+ cod + tax

If RTO it's forwardshipping + backward shipping + tax

Mohamed Amar

RTO is annoying. Then there is the added FC costs of restocking

Gaurav Mittal

Yes, it is supposed to be that way. Most of the courier companies charges you for handling cash. That could be a fixed cost or percentage of cash collected

Join India’s
most active community
and interact with 20k+
like-minded entrepreneurs