If you want to be profitable in dropshipping or eCommerce business in India, you have to reduce RTO and cancellation, otherwise, your profit will go down and your business might shut down.
RTO‘s full form in the E-Commerce and Dropshipping world is Return to origin.
RTO means When a seller or supplier sends a product or parcel to customers through a shipping or delivery partner but for some reason, if the product is not delivered to the customer and returned back to the seller or supplier’s address, then it is called RTO.
If you want to reduce RTO and cancellation in your eCommerce or dropshipping business then you should implement these 7 proven and tested methods in your business, which I shared below.
Here’s how you can reduce RTO in your Ecommerce and Dropshipping Business
Also read – Is RCMC Mandatory for export?
On this page
1. Product and Pricing
If you want to reduce the RTO and cancellation of your business and increase the delivery rate, you must first sell the right product at the right price.
You need to do some market or product research to sell the right product, you can use Amazon, Indiamart, Meesho, Facebook ad library, etc to do market research.
If you want to reduce RTO in your business, do market or product research in this way
2. Do an Order Verification Call
The first thing you need to do after receiving the order is to make a phone call to the customer to verify the order
and tell the customer the full details of the product, which he or she has ordered, like the price of the product, how long it will take to deliver, shipping charges, etc.
Another important thing you have to do must be to verify the customer’s area PIN code and address because many times the customer gives a correct address and wrong area pin code or vice versa.
And if you give the correct address and wrong pin code when you ship the product then it will not reach to the customer’s address and it will become RTO.
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3. Tracking
When you send products through a delivery or logistics company, a tracking number is generated to track the parcel or product. You must provide this tracking number to the customer via e-mail, WhatsApp, or Text message. This step is very important.
When the customer is able to track his product, then the customer can easily know where it is and when the product will be delivered, which will increase the delivery rate and reduce RTO.
4. Packaging
If you want to reduce RTO in your Ecommerce or Dropshipping Business then you have to pay close attention to the product packaging because if the packaging of your product is not good then,
When you send the product to the customer through a logistic partner and if the packing of the product is poor then the probability of damage to your product increases and if the product is damaged for any reason then,
the customer will not accept the product and it will be marked as an RTO.
5. Exclude Some Location
There are many locations in India where logistics companies are not available or the roads there are not good. If you get orders from those areas then the chances of RTO will increase.
Some locations or states from where more RTOs come are Andaman and Nicobar Islands, Arunachal Pradesh, Assam, Jammu and Kashmir, Kerala, Manipur, Meghalaya Mizoram, Nagaland, Tripura, Sikkim, etc
When you run Ads on Facebook, you can exclude these locations from the Facebook Ad Set so that orders will not come from the non-serviceable areas and your RTO will be reduced.
6. Offer a free Gift or Discount
Offering free gifts and discounts to customers is an easy and effective way to reduce RTO in your Ecommerce and Dropshipping business because every human loves free gifts and discounts.
My experience – I sell SUNISA CC Cream for Rs.699 and I offer a free gift that costs Rs.28, In this way, I reduce RTO and Increase the delivery rate by 17%.
Before selecting a gift, you need to identify who is your customers or buyer, in my case I sell cc cream that is only for women. That’s why I offer a sanitary pad it’s relevant to the main product and it is also very useful for customers.
7. Accept Online Payment
Trust is the main key to encouraging customers to pay online. If you can increase online payments in your Ecommerce and Dropshipping business, your RTO will be much lower and the customers who will pay online are genuine customers and also take the product.
My experience – When someone buys Sunisa CC Cream from my Ecommerce store through an online payment method, I offer a flat Rs.50 discount and a free gift on every purchase. I use Razorpay for accepting online payments.
Here are 9 more tips to reduce RTO:
- Fast shipping. After receiving an order, ship out the product as soon as possible. Because delays in the product delivery process change the customer’s mind if your shipping time takes more than 10 to 15 days most of your customers do not receive the product and it will become RTO. The ideal time for fast shipping is 5 to 7 days or less than 5 days
- The expected delivery date of the product. After shipping out the product tell the customer the Expected delivery date through a phone call, SMS, Email, or Whatsapp.
- NDR management*. The most important part of your business is NDR management. When your logistics company fails to deliver your product for the first time, they label it as NDR and your job is to take action as soon as possible, for better results within an hour or less, simply do a phone call and identify the reason
- Update Customers in Case of any Delays. If you are late in sending the product for any reason, then let the customer know.
- Identify customers who previously not received the product. If someone ordered before on your store but didn’t receive it, avoid them
- Instead of a refund, exchange the product. If the customer agrees, you can exchange the product without a refund.
- Use clear and high-quality product images. Use crystal-clear images on your landing page.
- Use product videos on your eCommerce store. Use a product demo video on your product page and show, how the product work and looks like.
- Fake delivery attempt by courier delivery boy*. Due to fake delivery attempts, your NDR becomes increase and RTO also increases, this is why you need to pay special attention to your NDR management.
- Offer Virtual Try-On or Augmented Reality: For products like apparel or eyewear, consider offering virtual try-on or augmented reality experiences to help customers visualize how the product will look or fit. This can reduce returns due to mismatched expectations.
FAQs
What is RTO in e-commerce?
In the e-commerce industry, RTO means, when a product did not deliver to the buyer or customer address and shipped back to the supplier or seller Warehouse then it’s considered as an RTO or Return to Origin. The main reason for RTO is you didn’t verify your order before shipping it out and another reason is you sell a saturated product at a higher price.
How do I lower my RTO in cod?
if you want to reduce the RTO rate on cod Orders then, When someone orders through the COD method on your e-commerce store, your first job is to verify the order by calling the customer. or you can also give a free gift.
How do I lower my RTO in Shopify?
After receiving the order do an order verification call to the customer and verify the customer’s address and area pin code. 2. Optimize the product image and you can use the original product video on your landing page. 3. When you sale-through digital ad platforms like Facebook, then exclude non-serviceable areas on your ad campaign.
