eCommerce Tips: Guide to Grow Business with Delivery Fee on Delivery (DFOD)

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Online shopping is a mammoth industry. According to Statista, e-commerce sales totalled a whopping US$5.2 trillion in 2021 globally. This doesn’t just mean consumers are buying lots of things online; it also means competition between online retailers is stiff. And an e-commerce merchant has to do all it can to edge out the competition and win the favour of shoppers.

One such way is allowing consumers to place an order without paying for the cost of delivery – termed delivery fee on delivery (DFOD). In this blog, we provide a comprehensive guide of DFOD, how it works and how it can benefit your business.

What is Delivery Fee on Delivery (DFOD)?

First, what does delivery fee on delivery (DFOD) mean? It is where a customer pays the shipping fee of their delivery upon receiving the product they had ordered online. DFOD is goodwill on the part of sellers, where shoppers are allowed to first receive their product and then make payment for their delivery only once they are satisfied. 

Without DFOD, customers who are dissatisfied with their product might have to spend time reaching out to customer service. They would have to go through the tiresome process of compensation and still not be assured of being reimbursed for their damaged product. With DFOD, customers can shop online worry-free and make purchases without worrying about whether their products will arrive safely or not. 

How Does Delivery Fee on Delivery (DFOD) Work?

A customer places an order on your e-commerce website. They might pay for their goods, but they do not pay for shipping at this point. The product is then shipped via international courier from Malaysia to where your customer is based around the world. In the instance where goods are not delivered, arrive damaged or do not arrive at the time they should have, customers can choose not to pay the delivery fee. Based on the conditions of your DFOD, you can explicitly state in which instances the delivery fee can be waived and in which scenarios the customer has to make payment for delivery.

How can DFOD Benefit You?

DFOD allows consumers to purchase products online without having to pay the delivery fee ahead of time. What this does is that it encourages consumers to make a purchase risk-free. It can help to build trust between you and the average consumer in e-commerce, especially for those new to online shopping and who are hesitant about whether their products will arrive in good condition. 

Along with DFOD, businesses can also offer cash on delivery (COD) services, also known as collect-on-delivery, and cash-on-demand – where consumers not only delay payment of delivery but also delay payment of their goods. When shopping online, consumers do not have to commit to a purchase and can instead inspect and try on their products upon receiving them – and only when they’re satisfied, pay for them. In the event that they’re not satisfied, they can choose to return it. With online scams on the rise, these services offer consumers greater control over their shopping experience and they wouldn’t need to worry about being scammed when paying for big ticket purchases.

Along with DFOD terms, offering cash on delivery (COD), shipping insurance options and on demand delivery services, offers customers a flexible shipping experience.

Customer checking if her parcel shipped from malaysia arrived in good condition before making payment for delivery under the delivery fee on delivery terms

How can You Supplement Your DFOD Policy?

1. Shipping insurance

Along with DFOD, what assures customers is the seller arranging for cargo insurance and defining clearly who is liable if something happens to a shipment. Who covers the costs of damaged goods? Who is responsible when products do not arrive at their destination as they should? By partnering with a reliable shipping partner that offers shipment insurance, you can receive comprehensive financial protection for your valuable and personal shipments. 

2. On Demand Delivery (ODD)

Beyond offering consumers the option of DFOD and COD, also giving them the option of flexible delivery services with on-demand delivery, can make the shipping and delivery experience a positive one for your consumers. Customers get to determine when they can receive their deliveries and how they receive them. They choose from a variety of options, such as leaving your package with a neighbour, a 30-day vacation hold or rescheduling your delivery date. 

3. Offer after-sales reassurance 

By providing email confirmation after a customer makes a purchase, together with online order tracking, SMS updates and delivery confirmation, you can provide assurance to customers.