COD is becoming a silent killer for e-commerce brands…
#Day77 of #HelpingAspiringPMs100Days
The customer loves COD, but it is a nightmare for the companies.
Here is why?
There is an unpopular rule in industry that before giving the product, always take payment first.
→ However, in COD, inventory is shipped out immediately.
→ Cash comes later
Guess what 2 things hit the most?
→ On average, 30 percent of users don’t take the product for the first time when delivery happens, when it is COD.
→ The company faces numerous challenges in managing its working capital.
Because of less working capital, the company faces issues like
1. Delay in the payment cycle of vendors.
2. Unable to get a better discount from vendors.
3. In some cases, I have noticed delays in salaries as well.
That is one of the reasons why E-commerce companies are continuously raising funds.
What should companies do to get more working capital?