The term NDR means Non-Delivery Report, which can further lead to RTO (Return to Origin). Let’s understand the detailed meaning of the two most common terms used in the logistics industry and how they can impact your online business.
Most online sellers are usually aware of the risks associated with undelivered shipments. The reasons for non-delivery of shipments can be many like an incomplete address, incorrect address, uncontactable customer, customer unable to pay the COD amount, or even a customer refusing to take the delivery for a specific reason. In all such cases, though the customer may not have received the shipment, you, as a seller, are liable to pay your courier partner. Now the question is, are such instances avoidable? If yes, how? Let’s dig deep.
What is NDR?
“Non-Delivery Report” is a term widely used in the shipment industry. An NDR is generated by a courier partner for a failed delivery attempt due to several reasons. When a seller doesn’t take any action on a non-delivery report, he/she reduces its chances for successful delivery in the future, which later results in a high Return of Origin (RTO) percentage.
How to process an NDR?
When an NDR is raised by your courier company, you can either reattempt the shipment delivery or choose the RTO option. For reattempting the delivery, you will need to provide the required details like the correct address, contact number of the recipient, etc. You must note that most courier partners typically make three delivery attempts at most. In case the delivery isn’t successful within three attempts, the package will be marked as RTO.
In today’s technologically advanced age, tech-enabled shipping aggregators like NimbusPost have introduced the NDR feature to bring down the non-delivery issue for sellers. Real-time access to the NDR panel helps sellers in knowing the status of their non-delivered shipments. As the sellers receive the minutest updates about their shipments, they can act on an undelivered report as soon as the courier partner updates the shipment status on the panel. Using the NDR information in real-time, the sellers can get in touch with their customers immediately and share the correct information with the delivery partner. Thus, more transparency in the shipment system enables sellers in avoiding significant loss in the process.
Is RTO a genuine problem for online sellers?
COD option in the Indian eCommerce market has always been immensely useful for sellers. Since most customers opt for the COD option when they purchase from a new seller/platform online, it helps sellers in acquiring new customers without imposing a prepaid payment method. Except for some preliminary benefits of the COD option, sellers have to face a huge drawback.
It’s important to note that most RTOs happen in the case of Cash on Delivery orders which means that almost 40% of orders are returned across the industry. It causes huge monetary loss for the sellers which they need to recover in some other way. The best way to overcome this challenge is to partner with a shipping platform that has a tech-driven infrastructure to make a substantial difference. By leveraging ultramodern technologies like AI and Big Data to manage the shipments, sellers can minimise their RTO percentage in no time.
How NDR and RTO impact profitability of online sellers
The feature helps you track your shipments round-the-clock. You can check any shipment just at the touch of a button. For example, if one of your shipments failed to deliver for some reason, your shipping partner’s tech-driven shipment solution will alert you about the product’s non-delivery. Usually, you get 12 hours to ask for a reattempt or share updated contact information. You and your end customer will get about three chances before the shipment gets marked as RTO.
This is a shipment stage where a returned order is shipped back to its original location which can be a warehouse or a different location assigned by the seller. The process may take hours or even months depending on the shipments.
Here, inventory is another issue for the sellers. Since no seller wants to lock in their inventory due to NDR, the issue further leads to cash-flow problems. The sellers have to bear the freight charges for both sides which in turn reduces their profit. Therefore, it’s important to keep the buyer and seller informed about the shipment status in real-time. With the correct information, the seller can file a delivery reattempt in time. On the other hand, the buyer also gets to know the exact delivery date and time to avoid non-delivery of the package.
RTO is a highly important aspect to take care of to maximise the profitability of an eCommerce business. It not just increases a seller’s RTO percentage but also decreases the customer satisfaction level. This is why it’s crucial to partner with a shipping platform that can help you note non-delivery reports in real-time and keep the RTO as less as possible.