The Upside of Consumer Financing
When you’re a small business, the name of the game is always earning as much money as you can with the resources you have access to at any given time. This, of course, means making as many sales with customers as possible to build your revenue base. However, if you specialize in selling appliances, cars or other big-ticket items, you may find that operating in the tight modern economy can pose a huge challenge. This is exactly why many business owners in your exact position have learned to take advantage of consumer financing, which helps them to increase their potential sales in an easy way.
What is it?
Consumer financing, simply put, is an arrangement you make with your customers that allows them to set up a payment plan on big-ticket items. In order to create this opportunity both for your customers and your place of business, you’ll work alongside a third party financing company. When your customers make purchases while using the financing option, you’ll receive your cash from the third-party company right away, and your customers will pay the same company through your business during the coming months.
How Does it Help Business?
The main goal of businesses using consumer financing is to increase the number of sales completed each and every day. Typically, the average customer won’t be able to afford a new fridge, washer, dryer or other large appliance up front, leaving them with no option but to deny your business a sale. When you offer them an option to finance the purchase, you’re effectively allowing them to break down the total cost into much smaller, much more manageable monthly payments. This increases the likelihood that they’ll make a purchase, thus giving your business more revenue.
Furthermore, business that offer financing options are also more likely to see a rise in the amount spent on each purchase. Because customers aren’t having to pay a huge sum up front for their purchase, they’re more likely to purchase more items or a more expensive model, which means more money for your business in the long run.
Finally, once you complete a few successful sales and your customers experience firsthand how easy the financing experience is, they’re more likely to pass on news of the great deal they received to family and friends. This means more traffic to your business, and ultimately more cash.
Selling big-ticket items in the modern economy can be tough, but it doesn’t have to be impossible. With consumer financing on your side, you can provide customers with the deal they want so you can get the cash you need to keep your business strong.