COD still drives the majority of Indian e-commerce orders, but it's also where margin leaks. Here's the honest trade-off between cash on delivery and prepaid for a D2C brand.
The case for COD
- Higher conversion, especially in Tier-2/3 and first-time buyers.
- Trust for new brands customers haven't bought from before.
The hidden cost of COD
- RTO risk. COD returns far more than prepaid — every RTO is forward + return freight and a lost sale.
- Cash-flow lag. COD is remitted on a cycle (e.g. D+7), so your money arrives days after delivery.
- COD fees. Couriers charge a per-order COD fee or a percentage of order value.
The pragmatic answer: offer both, steer smartly
- Keep COD available — don't kill conversion.
- Nudge prepaid with a small discount or free shipping on prepaid.
- Risk-score COD orders and confirm the riskiest on WhatsApp before dispatch.
- Use COD net-off so freight comes out of the COD and you don't pre-fund a wallet.
With COD net-off, the freight (and value-added charges) are deducted from the COD the courier collects, and the net is remitted to your bank on the cycle — no wallet recharge, cleaner reconciliation.
Should a new D2C brand offer COD?
Usually yes — COD lifts conversion when trust is low. Pair it with confirmation + risk holds so returns don't eat the extra revenue.
When does COD get remitted?
On a Delivered + N day cycle (commonly D+7), often on fixed weekly payout days, net of freight and VAS. Skyfleet shows the exact cycle and a downloadable per-cycle statement.
