Tips on Offering Consumer Financing
One way to boost sales is by offering consumer finance options to your customers. This can convince many people to make the big purchase today and pay it off over time instead of saving for it today and maybe buying it later. There can be some costs to offering this type of financing, so it is important to weigh all the factors and understand how it works before choosing a company to work with.
Understand How It Works
When you sign up with a consumer financing company, you are essentially offering a credit line to your customers through that company. Customers can apply in seconds through your Point Of Sale system either in-store or online, be quickly approved and use that credit line for their purchase as they would with a bank issued credit card. You will get the total amount of the sale in your account the same day, but the customer can pay their balance over time. If your company has big-ticket items or expensive upgrades to standard items, offering installment payments can help boost those sales.
Weigh the Factors
Not every consumer finance option will be able to work with your current POS system and be free for your store, some companies will charge a percentage of financed transactions to your business and some firms will have a flat monthly rate and installment fee. These are important factors to consider when looking at these options. Other factors include whether there is a minimum purchase requirement and if it fits your merchandise, what is required for customers to qualify, and whether it will be a good deal for your customers.
Choose a Financing Company
Since many of the factors for choosing financing in the first place are dependent on which company you partner with, it is a good idea to shop around to see what is available. Finding a financing company with a good reputation and history working with your types of items is a good place to start. This will ensure that any plan you choose can be used at your store or on your website, and that you and your customers will get a good deal on the services.
Consumer finance options can help you sale big-ticket items without breaking the customer’s bank, but you want to make sure that the options you offer will not end up breaking yours either. Understanding how it works, weighing the factors and shopping around for a financing company can help you choose the right partner to boost your sales and keep you in the black.