For small farmers doing direct online sales, reconciling accounts is more tedious than farming.
Buying agricultural products online is getting more and more convenient; a single finger can sort out a week's worth of groceries. But after consumers excitedly place an order, they must write down the transfer account number, report back the transfer amount, and the last five digits of the account. All this back-and-forth adds a fair amount of time, and farmers reconcile accounts until their eyes blur. If someone carelessly reports the wrong account number or remits the wrong amount, it is another round of chaos. Many farmers have switched to cash on delivery, and some have tried online payment, preferring to pay a little more to have other operators handle it, trading money for time.
Small farmers love cash on delivery
Chang Tzu-yi's approach fits closely with market research firms' findings on consumer habits. In a 2014 survey by AC Nielsen, 36% of consumers in Taiwan, China were in the habit of using credit cards as a payment tool; the latest results for 2015 were that 75% of consumers, when shopping online, were in the habit of paying with credit-card-type tools, 38% paid and picked up at convenience stores, and traditional transfer methods were down to 36%.
Reconciling accounts is time-consuming and laborious, a pain in the hearts of many farmers, but compared with other online goods, farmers' acceptance of credit cards is relatively low. Yang Yu-fan, who grows pineapple in Tainan, uses cash on delivery across the board. He explains that for T-cat home delivery cash on delivery, orders under NT$2,000 incur a NT$30 charge, which is comparatively cheap. If what is being sold is a single item, or there is no dedicated person who can handle credit card orders, cash on delivery is still the most convenient, and with prepayment consumers have an expectation in mind and repeatedly ask when the goods will arrive, so at present he has not considered accepting credit card payment.
For Hualien rice farmer Hsieh Ming-chien's customers, 30% choose to use ATM transfer, and 70% use cash on delivery. "I now beg consumers to use cash on delivery, because the home delivery operator handles it well for me; I just have to check once a month, and so far I have never had a missing account entry."
For consumers, convenience comes first
Consumers' opinions, on the other hand, are very diverse. Huang Hsin-hui buys two kinds of agricultural products by group buying on average each week, and her favorite payment method is transfer. Although she once forgot and was 3 or 4 days late in transferring, most of the time, because she has online banking set up, she can transfer immediately after placing an order or receiving the goods, and she does not find transferring troublesome. "For me, being able to complete everything online is still the most convenient, but I can understand producers' difficulties, and if credit cards are used I can accept that too."
Another housewife, surnamed Chiu, believes cash on delivery is the most convenient, because payment and goods are exchanged on the spot, one hand receiving the money and the other handing over the goods; otherwise, after paying in advance, she often worries anxiously about when the goods will arrive.
However, another group-buy organizer, surnamed Huang, says that at present farmers still mainly use transfer, and some home delivery operators settle monthly, so farmers get their funds very late; moreover, she herself wants to help farmers save on handling fees, so at present she uses transfer for everything.
Whether transfer is cost-effective is a matter of opinion; the most important thing is still to assess one's own capacity, and the money that should be spent should not be saved.
In Yang Yu-fan's first year of farming, he received 5-600 orders, and once, in order to save on handling fees, he slowly reconciled them one by one. "The numbers were so small, I nearly broke down reconciling them, my eyes were about to go blind." After the first week he realized the signs were bad and immediately switched to cash on delivery. He thinks reconciling accounts is not hard, but during the busy farming season there is simply no time to deal with such tedious matters. With T-cat home delivery he can receive the money in one week, and the time saved can be used to grow more things and expand output value. "I would rather work myself to death in the pineapple field than reconcile accounts."
Hsieh Ming-chien says that when many consumers notify him of remittance information, he happens to be working in the field, and by the time he gets home it is already 7 or 8 p.m. and he has forgotten all about it; once he even let it drag to the following year, and had to grit his teeth and phone the consumer to say the payment had not been received. "Although on a NT$20,000 order, cash on delivery may have NT$200 deducted, if I fail to reconcile it, the account that goes missing can be NT$20,000."
Chang Tzu-yi believes different farmers can choose different approaches, but they absolutely should not work themselves to death just to save money. If they produce and sell on their own but lack manpower, it is like dropping a stone on their own foot; they can only hold on to loyal customers and cannot expand the market.