NDR and RTO are two very common terms in e-commerce platforms. NDR or Non-delivery report is a receipt showing the orders that could not be delivered. It also carries the reason for non-delivery. The courier service makes several attempts to deliver the order, but despite all the efforts if the order remains undelivered, an RTO (Return to origin) is generated, and it is sent back to the seller.
One major problem that plagues the e-commerce industry is failed deliveries. The courier service marks these failed deliveries as NDR. The purpose of generating NDR is to ensure the successful delivery of the order. Even after repeated attempts at delivery, if the order remains undelivered, it is marked as RTO and returned to the warehouse. Here, the article is refurbished, restocked, and resold, provided it is not damaged in transit.
Unfortunately, the seller incurs huge losses because of RTOs as the buyer’s money has to be refunded. Moreover, the seller still has to bear the shipment costs. NDR and RTO are usually interconnected with each other and impact each other. Let’s understand how?
When an order is not delivered the first time it is marked as NDR. The courier service usually makes three attempts at delivery, after which they automatically mark it as RTO. A higher percentage of RTO results in losses for the seller both in terms of finances as well as customer experience. Thus, unresolved NDR’s lead to more RTO’s.
What is the impact of NDR and RTO on the seller?
NDR and RTO can bring down the profit margin of the seller. Here is how they undermine profits:
- Poor customer experience – If the customers are not happy with the way NDRs are handled, they constantly associate this experience with the brand identity. Slow reactions to NDRs may result in non-delivery too.
- Unwanted Shipping costs – A higher number of RTOs generated results in unnecessary shipping charges that the seller has to bear. Coupled with the loss of a customer, this seems very annoying as you are left with additional bills irrespective of the lost order.
- Delayed Delivery – Customers want their orders delivered as soon as possible. Unnecessary delivery delays cause undue anxiety, especially when the customer has already made the payment online. Some customers cancel the orders too and switch over to another platform.
- Potential damage in transit – there are always chances of the product getting damaged during the return journey. The probability of your order getting lost, damaged, or stuck is quite high. This puts an additional burden on the seller.
- Frequent cancellations – Delays in the delivery of order often results in cancellations. These frequent cancellations hamper the profitability of the business.
Both non-delivery reports and return to origin are bad for the growth of any business. The purpose of generating NDR is to ensure the successful delivery of the order. Even after repeated attempts at delivery, if the order remains undelivered. While neither of them is unavoidable, you can proactively reduce their number by employing the right resources and keeping yourself updated about the latest business trends.