When Is the Right Time to Move Away from Pure COD?
Ricardo Lemos · 2026-10-07
Analyze your cash flow and sales profit
The first step is to get a deep understanding of your cash flow. Review your sales from the last 3 to 6 months. Calculate:
- Total revenue: how much did you sell?
- Cost of goods sold (COGS): how much did you spend to produce or acquire the products?
- Operating expenses: how much did you spend on marketing, logistics, and other fixed costs?
With this data, identify your profit margin. If your margin is below 20%, it may be a sign to rethink your business model.
Check your repurchase rate and customer satisfaction
Your repurchase rate is a key indicator. Track how many customers come back to buy again. If the rate is below 15%, it may mean your offer isn’t attractive enough or there are customer satisfaction issues. Use satisfaction surveys and feedback to understand the customer experience. An NPS (Net Promoter Score) below 50 can be a red flag.
Consider competitor and trend analysis
Research what your competitors are doing. If most of them have already moved away from pure COD and are adopting other payment methods, look into why. Use tools like FreeSpy to monitor competitors’ campaigns and offers. Keep an eye on market trends, such as the growing acceptance of digital payments, which could influence your decision.
Assess collection and logistics costs
With the COD model, you may be dealing with high collection and logistics costs. Look into the following:
- Return rates: how many products are returned because they aren’t picked up?
- Shipping costs: how much do you spend delivering products that aren’t paid for upfront?
If return and shipping costs are eating into your margin, that’s a good indication you should consider alternative payment methods.
PREPARE YOUR CUSTOMER BASE FOR THE TRANSITION WITH CLEAR COMMUNICATION
Before moving away from pure COD, it’s essential to prepare your customer base. Communicate the changes transparently. Use email, social media, and your website to let customers know about the new payment options, highlighting benefits like security and convenience. Consider offering promotions to encourage customers to adopt alternative payment methods.
Moving away from pure COD isn’t an easy decision, but by carefully analyzing each of these points, you can make a more informed decision.
What’s your repurchase rate right now?