Learn the difference between straight sale and cash on delivery offers
Straight sale and cash on delivery offers are two different methods of taking payments for goods, in order to fulfill customer orders and help with planning and managing cash flow. There are advantages and potential drawbacks to both payment models, and knowing the meaning of cash on delivery and how it differs from a straight sale will help you to decide which is best for you.
In this article, we will explain the meaning of both straight sale and cash on delivery offers, and compare their relative merits and potential applications.
What is a straight sale?
The definition of a straight sale is “a transaction in which a customer places an order and pays for it, and then receives their goods after payment.” This is the type of payment model that most of us expect to find when buying products over the internet, and also, the most common type of payment method for affiliates who earn commissions for promoting third-party goods and services.
When you make a straight sale as an affiliate using the PPS or pay per sale payment model, payment is taken from the customer immediately, and the goods are delivered afterward.
An alternative to this is the cash network CPA payment structure, which rewards you for achieving a certain action to earn commissions – not necessarily a sale.
What is a CPA offer? It’s a type of affiliate commission model in which you are rewarded with a commission for generating a certain action or activity on the part of your prospects. CPA stands for “cost per action,” and this action could be winning an expression of interest, or getting someone to sign up for a free trial, among other things.
Marketing and ad placement for most affiliates are usually designed to target traffic sources that work with the straight sale payment model, and you will be able to chart your PPS success or CPA progress in winning commissions within your affiliate dashboard.
Whether you earn commissions by making sales or for achieving a certain action such as generating a lead capture or a sign up, a straight sale is the most common type of transaction method that will trigger your payments.
The advantage to this is that the money is in the bank from the get-go, and the financial side of the sale is completed as soon as your buyer checks out. However, there are some disadvantages too, including the potential for your buyer to abandon their purchase before checking out if there’s anything they’re not sure about, and the fact that people who reside in countries that don’t use the same type of payment methods that you accept online won’t be able to buy from you.
What is cash on delivery?
The cash on delivery sale definition is “a payment model in which goods are paid for after delivery.” This might mean that payment is taken at the point of delivery – and if the buyer doesn’t pay, they don’t get to keep the goods – or it may involve a set grace period for the buyer to examine or consider the goods before payment is due. This gives them time to return the goods if they find that they’re not what they expected or not what they want, without having to pay beforehand, organize a return, and then wait for a refund.
This type of payment model is also sometimes known as cash on demand, so if you see this term used instead and are wondering “what is cash on demand,” it is essentially the same thing as cash on delivery.
What are the benefits of cash on delivery offers?
The drawbacks of using cash on delivery to serve the needs of your clients are fairly self-evident; when someone makes a purchase without having to make a financial outlay to commit to it and receive their goods, the chances of them changing their minds or deciding not to keep the goods they order increases exponentially.
For instance, if someone wants to order an item of clothing and they aren’t sure what size to get, they might order the same item in three sizes with the intention of keeping only the one that fits them, and returning the other two. This means that refused and returned orders are likely to be more common with cash on delivery offers than they will be with straight sales, because a straight sale means committing funds for the full order, having to organize returns for unwanted items, and waiting for a refund.
However, there are also a number of advantages of cash on delivery too. Taking the same example of the person who orders three garments and only intends to keep one, you know that two of those items are likely to be refused or returned – but the buyer is apt to keep the third one. Knowing that they don’t have to commit to the purchase of all three garments can help to secure the sale of the one item they do keep when they might otherwise choose not to buy anything at all.
Offering cash on delivery can help to incentivize purchases and avoid abandoned shopping carts at the checkout stage because there is no risk or financial outlay required until delivery and acceptance.
Additionally, cash on delivery can help you to reach out to new markets of buyers and increase the diversity of your online traffic distribution and potential traffic sources, because you’re not limited to only buyers that use a certain type of payment method that you accept, or that won’t buy goods they haven’t physically handled.
This can give you the opportunity to target markets that other people aren’t reaching – like people who don’t use PayPal or hold a credit card, or people who reside in countries where the usual payment methods used in your home country are uncommon or unavailable.
Exactly how you accept payments from your cash on delivery buyers will depend on your own preferences or that of the affiliate scheme you work with to provide cash on delivery offers, but might include cheques, card payments online, money orders, and bank transfers. In some cases, cash on delivery means just that – the courier or delivery agent will accept a cash payment on the spot from your buyer, and convert this into the payment format you accept to send it through to you when they’ve collected it.
Which is better – straight sale or cash on delivery?
There are pros and cons of both straight sale and cash on delivery offers, and carefully considering what you’re selling and who you’re selling it to is an important factor in determining which payment model is better.
If you’re targeting buyers in countries where straight sales are the norm and people are used to committing their funds to a purchase at the checkout stage, straight sales may be the best choice. This also allows you to target impulse buyers because there’s no cooling off period between order and payment.
If you are targeting buyer demographics in countries whose main payment methods aren’t compatible with your own, or goods and demographics where people expect to be able to examine their orders before paying, cash on delivery may be more appropriate.
Both payment models are offered by a wide range of different types of affiliate schemes, and once you know the difference between straight sale and cash on delivery offers and how they work, you can make an informed decision on which to choose.
Posted by: Aleksandra