由 caicai8478 When Chinese export enterprises adopt the COD (Cash on Delivery) model, they face the problem of high payment collection risk (such as buyer refusal to pay, logistics disputes, etc.). To effectively reduce the risk, the following strategies can be adopted:
- Risk control before transaction
Strict buyer credit review
Verify the credit of the buyer through a third-party credit reporting agency (such as Dun & Bradstreet, Sinosure) to assess its payment ability and historical record.
Require new customers to make an advance payment (such as 30%-50%) or provide a bank guarantee to reduce the COD ratio.
Clarify the contract terms
Clearly define the payment terms, inspection period, refusal liability and liquidated damages in the contract (such as the logistics and return costs for refusal).
Agree on dispute resolution methods (such as arbitration or litigation jurisdiction, China is preferred).
Choose a reliable logistics partner
Work with internationally reputable logistics companies (such as DHL, FedEx) or local compliant delivery companies to ensure that they provide collection services and have the ability to pay.
Require the logistics party to provide identity verification of the signatory (such as photo/fingerprint signing) to avoid disputes over false signing.
- Risk control in transactions
Phase delivery and dynamic monitoring
Ship large orders in batches and adjust the subsequent delivery volume according to the previous payment collection situation.
Track the logistics status in real time and confirm the intention to receive the goods with the buyer before the goods arrive.
Insure credit insurance
Insure the COD business through China Export Credit Insurance (Sinosure) to cover the risk of buyer’s refusal to pay or bankruptcy.
Negotiate with the logistics company to insure the cargo transportation insurance to avoid losses during transportation.
Electronic payment and voucher retention
Require the buyer to complete the COD payment through traceable electronic payment (such as Alipay International Edition, PayPal) to avoid cash transaction disputes.
Save complete communication records, logistics documents and receipts as evidence of disputes.
- Post-transaction risk disposal
Quick response to refusal to pay
When the buyer refuses to pay, immediately contact the logistics company to detain the goods and negotiate return or resale to reduce losses.
Blacklist malicious buyers who refuse to pay, and share risk information through industry associations.
Flexible dispute handling
For quality disputes, partial refunds or replenishment can be provided to avoid full payment losses.
Resolve through international mediation institutions (such as ICC) to reduce legal litigation costs.
Diversified settlement models
Gradually combine COD with letters of credit (L/C) or telegraphic transfers (T/T), and transition to prepayment models for high-credit buyers.
IV. Long-term risk management
Establish a customer grading system: Divide buyers into A/B/C grades based on payment records, and set COD limits and payment periods differently.
Train overseas agents or local teams: Entrust local agents to follow up on collections in target markets, and use their advantages of being familiar with laws and culture to reduce risks.
Key summary
The core risk of the COD model lies in the buyer’s credit and logistics controllability. Through the full process management of “pre-screening + in-process monitoring + post-process disposal”, combined with insurance and localized services, the recovery rate of payment can be significantly improved. It is recommended that enterprises first pilot COD in markets with better credit (such as Southeast Asian e-commerce platforms) and then gradually expand.
If further optimization is required, the measures can be refined in combination with specific industries (such as cross-border e-commerce and B2B trade).