What does CPS (Cost per Sale) mean?
The abbreviation CPS stands for “Cost per Sale“. CPS is a model from the field of online marketing in which billing takes place after sale. With this billing method, the affiliate operator only receives his commission when a visitor has made a purchase on the target page. However, it must also be noted that the revocation period must have expired before the commission is paid out.
How CPS works
With the Cost per Sale (CPS) model, an affiliate participating in an affiliate program such as Amazon PartnerNet or another affiliate network of a manufacturer receives an affiliate commission if one of the products he advertises on his website is ordered via his affiliate link. As usual, however, he must first wait for the expiry of the revocation period before the commission can actually be paid out. Without this additional condition, it could happen that the customer sends the goods back, the seller has to refund the order amount and remains on the commission already paid without having achieved sales proceeds. The affiliate partner therefore makes advance payments and works (on a commission basis) as a kind of intermediary.
The amount of the commission can be determined individually. For example, a variable payment based on the retail value or a fixed commission per order or unit is possible. In addition, the affiliate can also participate in the sales on the basis of a lifetime fee. The affiliate receives a certain commission for a lifetime (or at least for a longer period of time) for each order or payment that an acquired customer executes. Both the seller and the affiliate must decide individually and depending on all general conditions which model makes the most sense for them. A multitude of factors must be taken into account here.
What are the alternatives to CPS?
In addition to the “CPS” billing method, there are many other models in online marketing according to which affiliate commissions can be calculated. Here are some prominent alternatives:
- Cost per Click / Pay per Click (CPC or PPC)
- Cost per Lead / Pay per Lead (CPL or PPL)
- Cost per Order / Pay per Order (CPO or PPO)
- Cost per View / Pay per View (CPV or PPV)
- Cost per Action / Pay per Action (CPA or PPA)