Optimized Article for Google SEO: The COD (Cash on Delivery) Business Model in Cross-Border E-Commerce
COD, short for Cash on Delivery, has become a popular payment model in cross-border e-commerce, especially for merchants targeting developing markets. In recent years, many online sellers have implemented COD services to boost order rates, build trust, and enhance the customer experience. This approach is also widely used in the niche of designer-inspired product websites. Many of our clients have successfully deployed COD services in regions such as the Middle East, Southeast Asia, and Japan. Our company has also integrated COD payment solutions into our independent e-commerce website systems.
Two Common COD Models
Most merchants who adopt COD follow one of two operation models:
Single-page Storefront Model: A focused, high-conversion page promoting one or a few items.
Multi-product Mall Model: A comprehensive storefront with multiple categories and a broader catalog.
Each approach has its strengths. Single-page models convert faster and are easier to manage. Mall models build brand trust over time with more diverse product offerings.
The Origin and Growth of COD in Asia
The COD model first gained momentum in Southeast Asia and Taiwan. Markets like Vietnam, Malaysia, Thailand, and Taiwan were early adopters. Years ago, many cross-border sellers in Shenzhen used Facebook and Instagram ads to drive COD orders from Southeast Asia, tapping into a combined social media audience of over 4 billion.
For instance, a well-known Chinese COD seller once reported annual revenues exceeding USD 430 million, showcasing the enormous potential of this model.
COD Fulfillment Flow
A typical COD process looks like this:
Source goods from factories or wholesale suppliers
Create a compelling product listing
Drive traffic via social media ads
Optimize a single product listing for high conversion
Buyer places order
Merchant confirms order via email or customer service
Products are handed to a logistics partner for shipping and payment collection
The most crucial aspect of COD: the delivery acceptance rate. Your profit hinges on how many customers accept and pay for the delivery.
Why COD Works in Specific Markets
The COD model thrives in Southeast Asia, Taiwan, and the Middle East due to several factors:
Trust Factor: While online shopping has gained trust globally, COD provides an extra layer of confidence for consumers. It addresses concerns like product quality mismatches and delivery failures.
Payment Infrastructure: In many areas, mobile payments and digital banking systems are still underdeveloped. Countries in the Gulf and parts of Southeast Asia lack widespread support for credit cards or e-wallets, making COD an ideal solution.
De-platforming Trend: Rising ad costs and the increasingly restrictive policies on platforms like Amazon and AliExpress have driven merchants to independent websites. COD allows rapid deployment and scale without platform limitations.
Key Elements of a Successful COD Model
A. Product Selection
In e-commerce, product selection is king. It determines over 70% of your success. Designer-inspired products, for example, offer high margins, market demand, and high conversion rates.
Top-performing products typically:
Offer great perceived value
Solve real problems
Are priced competitively
B. Acceptance Rate (Delivery Rate)
Let’s say Group A and Group B both spend equally on ads and inventory. Group A has an acceptance rate of 80%, while Group B’s is only 50%. Group A earns profit; Group B faces losses. That’s how critical delivery acceptance is in COD operations.
C. Payment Collection
Funds are typically collected by logistics companies and remitted to the merchant. Choosing a reliable logistics partner is essential. Some offer weekly settlements, while others may delay payouts for 30 days or longer. In some markets, fraud or lost payments can be an issue. Payment recovery is just as important as making a sale.
D. Order Returns & Re-shipping
Refused deliveries and returns are inevitable in COD. Unclaimed stock can lead to warehousing costs. To mitigate this:
Work with local logistics providers who offer return-to-sender and re-shipping services
Quickly forward returned goods to new buyers to reduce losses
Final Thoughts
The COD business model remains highly viable in selected international markets. It requires a full-stack approach: from smart product selection and compelling page design, to strategic ad buying, customer support, and post-delivery logistics.
Success in COD relies on operational excellence and risk management, especially around acceptance rates and payment flow. With proper planning and reliable partners, COD remains a powerful tool in the cross-border seller’s playbook.
