What is RTOs & NDRs in eCommerce
The ecommerce industry is largely dependent on the shipping and delivery practices that they offer. While the E-proof-of-delivery is an attractive feature of many shipping and tracking softwares, it is equally important to maintain the records of non-delivered orders.
Hence, the term NDR and RTO in eCommerce came into existence. The details of the orders with failed deliveries are stored as NDR (Non Delivery Report). Furthermore, the orders which remain undelivered even after two to three attempts are marked as RTO (Return to Origin).
All About NDRs
In ecommerce, NDR implies Non Delivery Report. It is a receipt or report generated by the courier partner that shows the details of orders whose delivery could not be completed, along with the reason for non-delivery of the package. NDR provides an insight into the failed deliveries and helps sellers to decide a suitable course of action for enhancing the delivery numbers.
The numerous possible reasons for a delivery to become a record on the NDR can be:
- Absence of a recipient at the provided address.
- Incorrect or incomplete address provided by buyer.
- Order rejection at doorstep.
- Rescheduling of delivery by customer.
Once the delivery fails, it is not rejected straightaway. Instead, two to three reattempts are made by the shipping partners and post this, the order is labelled as RTO (Return To Origin).
What is RTO?
The orders which are not delivered even after multiple attempts or are cancelled while in transit are labelled as RTO. A package marked as RTO is sent back to the pickup location warehouse and stored until it passes the quality check. RTO is essentially a loss for the ecommerce business as they still incur the delivery and pickup cost, and have to refund the purchase amount to the buyers. Furthermore, if the product gets damaged, it adds up to the expense of the ecommerce business.
How is the NDR processed?
When the delivery agents fail to complete the delivery of an assigned parcel, they raise an NDR. This prompts two options to choose from on the shipping and tracking software — either ‘reattempt delivery’ or ‘return to origin (RTO)’ or ‘reverse logistics’. For re-attempting the delivery, the missing conditions (such as address, contact no, receiver availability etc.) must be fulfilled. When ‘reattempt delivery’ is selected, two to three attempts are made to consign the order to the designated recipient. Even if after the maximum number of re-attempts the order remains undelivered, it is marked as RTO and dispatched to the pickup location warehouse.
Are NDRs and RTOs desirable for an ecommerce business?
NDR Management in eCommerce And Return to Origin greatly impact the functioning of a business. NDRs assist businesses by providing 24*7 real-time updates about any unaccomplished deliveries along with imparting plausible explanations for delivery failure. Hence, they benefit the ecommerce business owners by adding to their understanding of the customer base.
On the contrary, RTOs entice monetary losses and are undesirable. The payment method for most of the failed deliveries is COD (Cash on Delivery). In such a scenario, the seller does not receive any payment for his products and instead, bears the cost of transportation of the product, both to and from the customer address. Moreover, returned products need to be stored at warehouse and hence end up consuming a lot of inventory space.
Conclusion
For smooth and profitable functioning, it is essential that ecommerce businesses are able to minimise their RTO numbers. The lower the number of orders returned to the origin warehouse, lower is the inventory locking and unprofitable freight expenditure.
The requisite to achieve the same is that the sellers and buyers go hand-in-hand. The sellers can onboard ecommerce logistics management and tracking softwares that keeps the buyers well-informed of the whereabouts of their orders. This will contribute to significant growth in successful deliveries and help manage and minimise the NDRs and RTOs.
