The Hidden Logistics Scam That Is Making You Bleed Cash
There is something dark about Indian E-commerce logistics that nobody is talking about. Big numbers acknowledge the industry’s prolific growth, but certain issues continue to plague E-Commerce sellers and Logistics companies.
This post will throw light on 1 such element, the reclusive and little known “Fake Delivery Attempt”.
As we talk about shipping technology and faster deliveries in the present day e-commerce scenario, we miss out on something very important – Customer Sentiment.
Even when the purchasing behavior of the customers keeps evolving every day, their sentiments remain the same. As an e-commerce seller, you can keep a check over many factors such as product quality, pricing and packaging. But at the end of the day, customer satisfaction becomes the most crucial factor for customer retention.
Customer satisfaction majorly revolves around the successful delivery of the product on time and in a proper condition.
Logistics in India is still unorganized. It has not been able to keep up with the growth of e-commerce in the past few years. While a big player like Amazon manages logistics through huge tie-ups and fulfillment centers (soon with drones), a SMB owner has to rely on conventional courier companies. Their service quality is hard to standardize, and problems like Fake Delivery Attempts make customer retention a nightmare.
What are Fake Delivery Attempts?
Fake Delivery Attempts is one major challenge that directly affects customer retention and satisfaction. “Delivery attempted. Customer not available”. Have you ever encountered this as an online buyer?
There is a strong possibility that you would have been at your delivery address the whole day, but no delivery boy actually arrived at the location to deliver the package.
What happens then? The end customer gets dissatisfied with the seller who sent the parcel and not the courier partner. The seller starts losing customers and his/her market reputation takes a hit.
How Does a Fake Delivery Attempt Impact The Average E-Commerce Seller?
Assume that you are the seller and you have shipped a product worth Rs. 1000 to your client from Mumbai to Bangalore. You didn’t charge your customer for shipping and the package gets returned due to a fake delivery attempt.
- Courier charges one way – Rs 50
- Courier Returning to Origin – Rs. 50
- Courier charges to send it again – Rs. 50
You pay Rs. 150 to lose a customer, incur operational losses and take a hit on your margins. If this happens 20 times in a month, you spend approximately Rs. 3000 and lose repeated sales of approximately Rs. 20,000 from each customer just due to fake delivery attempts.
So Why do Fake Delivery Attempts happen?
- Last mile delivery: A last mile delivery person gets incentivized for the number of deliveries he does on a daily basis. He follows a particular route so as to deliver the maximum number of packages. If a courier that you have shipped falls outside of this route, it’s unfortunately going to hurt you.
- Space Optimization: Any courier company hub would want to ship out maximum number of parcels from their hub to optimize the space available for incoming parcels at the hub. If the delivery was attempted and the customer was not available, they try to return the parcels to origin and make space for the incoming parcels.
How Can You Avoid paying for Fake Delivery Attempts?
Whenever a delivery attempt fails, the parcel remains at the hub for 24 hours before returning to origin.
If the seller places a request for delivery reattempt, the delivery gets reattempted. If not, the parcel returns to the origin. The seller will get to know about the delivery attempt only when the customer informs him within the 24-hour window, which doesn’t happen in most of the cases.
We were riddled with several queries from sellers on our logistics platform. After intense speculation and analysis, we arrived at a logical conclusion. The way to solving this issue was by relying on “technology” and “operational improvements”. At Zepo Couriers, we receive Non-Delivery Reports (NDR) directly from courier companies regarding the delivery attempts made on a particular day.
- We get in touch with the end customer within the 24-hour window of non-delivery.
- The reason stated for non-delivery in the NDR is cross-questioned with the consignee.
- If the consignee doesn’t agree to the reasons for non-delivery, then the incident is marked as a fake delivery attempt.
- The matter is immediately escalated to the courier company for a delivery reattempt.
- The seller is also notified of the change in process to keep them in the loop.
The results were profound and immediate
- Over the last 6 months, we have reduced the number of parcels returning to origin due to fake delivery attempts to less than 5%. This used to be much higher, somewhere around 12-15%.
- Also, we observed that the percentage of RTO’s has reduced from 15% to 8%. E-Commerce sellers have reported decrease in expenses, better operational efficiency and higher customer satisfaction.
Any customer facing organisation wants to offer the best possible product for their customers. The belief is that a company’s growth is closely linked with that of their customers. With our process improvement, we successfully limited revenue leakage from fake delivery attempts by a huge margin. It has also resulted in a massive increase in the performance of courier companies, as they are better equipped with data to ensure maximum control over pick-ups and deliveries.
Maximize your delivery reach. Service more orders. Keep track of your shipments digitally.