Deciphering CPA and CPO Part 2: SHOP.COM CPC and OneCart Programs

SHOP.COM
The next combination of CPA and CPC programs comes from an industry mainstay, SHOP.COM. SHOP has been a marketplace destination for merchants for years, helping sell electronics to wedding dresses. SHOP is also linked to a number of affiliate sites and programs like Quixtar, helping bring traffic and sales through the door.

CPO - CPA Program

SHOP offers a commission based billing program name OneCart similar to the one pioneered by Amazon, where a merchant pays a portion of sales to SHOP for each order that comes through. This process requires an extensive layer of integration work, just like Amazon, to integrate both product feeds to SHOP and order feeds coming back.

The main difference in SHOP’s OneCart system is that the merchant processes the order, and in a sense owns the order. SHOP delivers all order information to the merchant so funds can be taken and shipping performed. This twist poses both advantages and disadvantages.

The advantages are that the merchant literally owns the order. The charge for the order is made by the merchant who listed the item. This means the merchant can follow up with the customer with the usual coupons, newsletter offers, promotions, etc., than help with retention and branding.

The disadvantages are that the merchant still needs to process the order through their payment processor and pay associated processing fees. ,This can also create confusion when the customer receives their credit card bill or needs to deal with a merchant they may not be aware of. Lastly, the merchant takes the standard risk of credit card fraud that comes with each order. If margins and costumer retention are good, and fraud rates are low, this can be an excellent system.

CPC Program

This year SHOP released the ability to join under a cost per click program. This allows SHOP to function exactly like a standard comparison shopping engine, sending clicks to the merchant. A quick snap shot follows showing how ‘OneCart’ items are listed right next to CPC items:

Currently SHOP does not offer bidding options as supported by many other engines.

This type is of integrated system is being embraced more and more often by companies looking to capture both sides of a market, for merchants looking to pull traffic to their own websites, and merchants looking for easy and trouble free order processing.

Next…Part 3: Amazon vs Amazon Product Ads

April 19th, 2008