Benefits of Cash Sale vs Credit Sale 3/5

Updated: May 2, 2020

Fundamentals

A seller who gets cash in place of a sale spontaneously, his cash circulation remains good. He never gets low on cash. He always has enough money to involve in other business transactions. A cash buying and selling business allows the owner to be free from fear of bad debts. His money is no longer stuck with debtors and he does not need to worry about how to make his debtors pay.


Benefits of Cash Sale

- Positive Cash Flow

- More Customer repeat orders (Customer, first sells goods that are purchased in cash)

- Better Price for Customer ( Passing the Cash Discount received from Supplier)

- More Time available to focus on New Business instead of following A/R

Challenges of Cash Sale

- Low Bulk Order

Benefits of Credit Sale

- Higher Sales Turnover

- Higher Profit Margin

Challenges of Credit Sale

- Goods Sold on Credit are not sold further due to Customer first selling the goods purchased in Cash

- Requires Continuous Follow-up with customer for payment

- Payments received are Slow and not as per promised

- High risk of Bad Debts

- High Risk of goods to be returned

Real-Life Experience

Customers who purchase in Cash have repeatedly stated that goods purchased from you sell amazingly fast. The fact is that our Customer would always resell our goods first as they have purchased in Cash, and that is a win-win situation for us and our customer.


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1. Benefits of Cash Business vs Credit Business

2. Benefits of Cash Purchase vs Credit Purchase


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4. How to Convert from Credit Purchase to Cash Purchase

5. How to Convert from Credit Sales to Cash Sales




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