Cash-On-Delivery Can Make Logistics Tricky. Here's How to Get it Right.

COD, or Cash on Delivery, payment options are still crucially important in many markets, particularly those where trust in online banking and purchasing still has a ways to go.

Logistics has become very global, so much so that a company based in the UK may send orders to India, South America, and the USA. With all the different markets, you have different customer expectations.

If you want to succeed in every market, you must provide the payment method that the customer knows and trusts.

However, COD payments are still used in more places than you’d think. For instance, we at CBIP just implemented our new cash-on-delivery system for a brand to serve its EU market.

While COD may seem a thing of the past, it’s not as old-fashioned as you may think, so you need to get to know it. As a brand that just launched our own cash-on-delivery service, I feel we’ve learned enough about the ins and outs to give you some advice. 

Here’s what you need to know about COD, why you may need to offer it depending on your brand offering and markets served, and how to do it right.

Read About CBIP’s Global 4PL Logistics Services

Never used it? Here’s who DOES

If you have never used COD, now is not the time to panic and add it to your offerings. Depending on which markets you sell to, you may want to consider adopting it at some point, at least for certain purchase types or zip codes.

However, even if your product type and/or market doesn’t require you to use it now, you may enter markets where it is helpful in the future. In markets like India, as many as 70% of online sales were done with COD payment in 2024, so it’s a good plan overall to learn about it should you want to enter a new market or offer a new product type.

Markets where it’s popular

In general, markets that can be categorized as “developing” have much higher instances of COD payment use. This is often due to the fact that many shoppers in these markets do not have a debit or credit card and those who do not trust the security of online banking.

In markets like these, you would be a fool not to offer COD. Of course, it’s also easier to set up COD in markets where it is prevalent, seeing as there are many couriers who offer COD as a service.

Throughout Africa and various countries in Latin America, Asia, and the Middle East, COD is still king. If you are entering a new market, it pays to do the research to see how the local customers like to pay.

Couriers that offer COD services can range from huge international players like DHL, all the way down to small regional carriers.

Related: Building the Right Return Policy For Your Brand

Brands that rely on it 

Even in markets that don’t offer a lot of COD anymore, you still see some popular brands offering COD for specific reasons. 

For instance, in places like the US where online payment options are highly secure and widely trusted, various food delivery services and select apparel brands still offer COD options.

A couple of tips on getting it right

It seems simple and old-fashioned, but it can be tough to achieve at scale efficiently. Fulfillment logistics is complicated, and managing payment transactions during delivery requires additional time and resources.

The last mile of fulfillment is already pretty inefficient, so if you add COD in, it gets even more crucial to optimize that product as much as possible.

How does it work: 

For those who don’t know, COD is pretty much what it sounds like: customers are paying when the item is delivered, instead of before ordering online.

In this scenario, the customer typically does not pay for shipping: that responsibility lies on the retailer. The customer may also choose not to accept the order. In that case, you have to be ready to accept the item as returned, without ever finalizing the sale.

It’s important to note that cash-on-delivery doesn’t always mean 100 percent cash transactions. Many brands who use COD actually ask for a credit card on file, so that they can charge you as soon as you have decided to keep the purchase.

How to hire a good COD delivery service:

When looking for a COD service, particularly if you are looking in a new market, you first need to suss out who the players are. 

First, you have your large international providers who also offer COD: companies like DHL, FedEx, and Aramax.

Next, you’ll find regional providers. If you are based out of a different market, these may be provider names you haven’t heard before. Take the time to find out who they are; a little research into the best regional providers can save you a lot in fees.

In many markets, you may be dealing with densely populated or remote areas. There are countless hyper-local providers that know the territory better than anyone. If you find the right one, you can save a lot of money and cut down on delivery problems.

As with any logistics service, you’ll need to do your homework and ask questions about who delivers where. Finding the right COD provider can be confusing if you haven’t done it before, so make sure to read reviews online and speak with local business owners when you can.

Why did we choose to start our own COD service?

As an international 4PL, we pride ourselves on offering an integrated tech platform to make logistics as smooth and automatic as it can be.

However, being international also means understanding that on our great big planet, people live in a wide variety of ways, and markets work very differently from place to place. One thing about e-commerce logistics is that it is all about finding a way to cater to customer expectations.

So, that is what we are doing. Along with our totally integrated platform, Bundle (which just launched this fall), we have launched our COD service. We’re excited to cater to the full spectrum of fulfillment needs; from the highest tech to in-person cash payment.

Because that is what it is all about: catering to what the people want!

Wondering if you are offering the right payment options? 

Even after doing market research and following what your competitors are doing, it isn’t always easy to know if you are offering the options that will get your shoppers to click the “purchase” button.

COD can be expensive and difficult to do efficiently; particularly for market newcomers, it is often easier to just say “no, thanks” to COD. 

We get that, but you can’t afford to miss out on the multiplied sales you could be making with a COD offering. 

That is why we are here to help. At CBIP, we have all the connections you need, from overseeing your customs clearance to setting up your COD fulfillment network with the perfect hyper-local courier, we have all the connections, and all those providers are connected to our easy-to-use online interface.

Dealing with something as tedious and inefficient as cash on delivery is HARD for a brand, so let us help. Reach out to us to set up a totally free logistics consultation meeting, and we’ll chat about your options.