In the past, only large retail outlets could afford to offer consumer credit to shoppers, and there were considerable benefits which accrued as a result. Surveys have shown clearly that many purchasers would not have bought some big-ticket items if those items hadn’t been available on credit terms, which allowed them to pay off the balance over time. It’s also a known fact that consumers using credit to buy will spend an average of 15% more on every purchase, simply because they don’t have to use available cash to pay for it.
Small businesses can join in too
Nowadays, small businesses can start enjoying some of those same benefits too. Whereas historically, small businesses could not setup the credit programs, manage the associated risks, and comply with consumer credit laws, modern consumer credit products and lenders are changing all that. Lenders are establishing working relationships with small businesses so that credit can be offered online to consumers, with all parties benefiting. When any online buyer makes a credit purchase, the transaction value is paid to the online store within days, and the remaining financial arrangements are between the lender and the consumer.
Small business benefits
The biggest benefits to your small business are increased average sales per consumer, and more sales of expensive items – the same advantages that only the big stores of the past could enjoy. Some lenders even offer additional incentives for buyers such as special financing options on purchases which are above a specific threshold, and this can encourage even more spending.
Small businesses operating online can also take advantage of another very significant benefit provided by lenders who offer consumer credit. The typical rate of abandonment of an online shopping cart has hovered at close to 68% for quite a while now, and with the relatively new option to buy now and pay later, it will almost certainly lower that abandonment rate. Those would-be buyers who get cold feet when they see a large total at checkout time, are much more likely to follow through with purchases that don’t have to be paid immediately.