Cash on delivery is how Pakistan buys online. Vendor research puts it at roughly two-thirds of all e-commerce transactions, with an average collection in the Rs 2,500–3,500 range, settlement typically landing three to seven days later, and refusal at the door somewhere around 15–20%. Those are national ranges from a logistics-industry report, not laws of nature, but they are the right order of magnitude to plan against.
What almost nobody writes down is what those percentages do to a small shop's actual cash. So here is the arithmetic, twice: once when it works, once when it does not.
The order that works
| Line | Note | Amount |
|---|---|---|
| Order value collected | Cash at the door | Rs 3,000 |
| Cost of goods | At a 30% gross margin | − Rs 2,100 |
| Delivery fee | Twin-city, from Rs 150 | − Rs 150 |
| Packing | Box, tape, filler | − Rs 40 |
| What you keep | Rs 710 | |
Rs 710 on a Rs 3,000 order. Fine. Now the other one.
The order that comes back
| Line | Note | Amount |
|---|---|---|
| Collected | Nothing | Rs 0 |
| Delivery fee | The run happened | − Rs 150 |
| Return leg | We do not charge for the return run | Rs 0 |
| Packing | Usually not reusable | − Rs 40 |
| Goods | Back on your shelf — if undamaged and still sellable | Rs 0 |
| Cost of one refusal | − Rs 190 | |
So one refusal wipes out more than a quarter of the profit on a successful one. That single ratio is the whole reason refusal rate matters more than delivery price.
The sensitivity table — the number worth printing out
Take ten orders at Rs 3,000, 30% gross margin, and vary only the refusal rate.
| Refusal rate | Delivered | Profit on delivered | Cost of refusals | Net |
|---|---|---|---|---|
| 0% | 10 | Rs 7,100 | Rs 0 | Rs 7,100 |
| 10% | 9 | Rs 6,390 | − Rs 190 | Rs 6,200 |
| 20% | 8 | Rs 5,680 | − Rs 380 | Rs 5,300 |
| 30% | 7 | Rs 4,970 | − Rs 570 | Rs 4,400 |
| From 0% to 30% refusal | −38% of profit | |||
Read that last row carefully. Nothing about the product, the price or the marketing changed. Only the number of people who said no at the door — and it took well over a third of the profit.
The part that is not profit: working capital
Even every successful order has a lag. You buy the goods today, you ship tomorrow, and the cash arrives several days after that. At a three-to-seven day settlement cycle and twenty orders a day, you are permanently funding several days of stock out of your own pocket. That, not margin, is usually what caps how fast a small shop can grow.
What actually reduces refusals
In our experience the causes sort into five buckets, and only some are fixable by the seller:
- Never really intended to buy. Pre-dispatch confirmation is the only cure.
- Forgot, or changed their mind. A reminder the morning of delivery fixes a surprising share.
- Nobody home. A chosen window fixes this one outright.
- Address failed. See our twin-city address guide.
- No cash in hand at that moment. Telling the customer the exact amount in advance fixes most of it.
Industry sources associate WhatsApp-based delivery confirmation with roughly 20–30% fewer failed deliveries. We would treat that figure as directional, but the mechanism is obvious: a customer who has confirmed a time and an amount is a customer who is standing behind the door with the right notes.
When prepaid is worth a discount
You can afford to discount a prepaid order by roughly the expected cost of refusal on a COD one. At a 20% refusal rate that is about Rs 38 per order on these numbers (20% × Rs 190). Offer less than that and prepaid is pure margin; offer much more and you are paying to avoid a problem that is cheaper to fix with a confirmation call.
COD ka paisa kitne din mein milta hai? — How many days for the COD payout?
It depends entirely on the courier, and this is the question to settle before you open an account rather than after. Ask for the cycle in days, in writing, and ask whether it counts from delivery or from remittance batching — those are not the same date.
