What is CWO?
CWO or “cash with order” is a business transaction that involves the payment of cash at the time the goods are ordered. It literally explains itself that one must pay for the goods while the order is being placed. The buyer in this transaction is aware of the idea that he/she should pay for the goods which are not given or delivered yet. In this case, no transaction is made if no cash is presented. The supposed order will not be taken if the accompanying cash payment is not presented.
The CWO business practice typically applies to small orders or purchases. This involves ordering of goods that has little monetary value. Since this type of transaction involves some form of risk in the sense that the goods are not delivered yet but the cash is already forwarded to the seller. Miscellaneous items like basic office supplies or other small items are examples of goods that may involve a CWO transaction between a buyer and seller.
CWO is also commonly used in the export business. Many companies that export their goods to other countries or other distribution areas require upfront payment for goods even if it may take days or weeks for the buyer to get his hands on the goods. Some goods involved in any CWO transaction may be shipped and delivered to the buyer immediately upon cash payment. But there are also instances that goods will need to be produced and/or manufactured before shipment is done.
CWO transactions may also be required upon some buyers, especially “unknown” or “new” buyers. Those involved in any transaction for the first time are usually required by sellers to pay up front before any delivery of goods. In this case, buyers may need to wait for some time or several transactions before they can have credit arrangements with their respective sellers.