Buy Now, Pay Later: Does This Online Selling Strategy Work?
The last several years have been challenging, to say the least. The global pandemic arrived quickly, leaving many businesses unprepared to pivot quickly enough to address the needs of their customers. It didn’t matter if you had a brick and mortar location and/or sold your products and services online. We all faced issues in continuous operations, working remotely, and giving customers what they needed to survive.
Now that we’re out of the worst of it, companies of all sizes, selling everything from hardware to hard goods are finding more creative ways to increase sales, stand out and outlast the competition. Chances are your business is no different. Even companies like Amazon and Wal-Mart had to get more creative. No one is 100% protected.
Buy Now, Pay Later: What it’s About
So what is your strategy to sell online? Are you wed to traditional shopping cart sales or finding different sales tactics? Sure, there’s BOGO (Buy One, Get One), percentage-off sales and similar methods, but one way to purchase that’s been in the news is “Buy Now, Pay Later.” What’s this all about?
According to Shopify—Certum Solutions’ partner in e-commerce—Buy Now, Pay Later gives your customers more flexibility when they check out. It’s not the same as Layaway—still a popular way to pay, but mostly seen at brick and mortar stores. With Layaway, you reserve the product and pay when you want it home or to your business.
Instead, with Buy Now, Pay Later, you can offer more purchase options. Customers can spread out their payments over time, enabling them to make their budgets go further and increase their purchasing power.
Furniture companies have been doing this for quite a long time. For example, you can buy a dining room set and pay some each month toward the purchase price, all interest-free. So if the dining set cost $5,000 and the store gave you 5 years to pay it off, you’d pay $1,000 per year or about $83.33 each month to avoid interest. If you skipped a payment, then the interest charges that usually have a high percentage rate kick in.
What’s in it for you?
With Buy Now, Pay Later, you also offer monthly installments. Shopify claims that with interest-free monthly installment payments, companies have seen an increase of up to 50% in the average order and up to 28% fewer abandoned carts.
It makes sense that not everyone is in the market for a new dining room set as often as they are in the market to buy something you sell. As a result, the Buy Now, Pay Later strategy does make sense. With it, your customers get no surprises or late fees, and you get paid for every installment, so you don’t have to chase down those payments.
If customers default and don’t pay, you’re facing minimal exposure. Shopify, for example, uses its partner resources to collect payments, so you’ll get your money regardless of the circumstances. Other e-commerce companies offer similar plans.
The bottom line is that you’ll get customers to remain loyal if you give them options to pay, especially in today’s economy. Some business owners may not want to go this route—and that’s perfect understandable—and it’s not for everyone, but it’s an option to consider.
Certum and E-Commerce
Certum specializes in providing e-commerce solutions for your business. We set up and connect your POS to your financial software and inventory tracking. Book time to talk to our team today about ways to get ready for end-of-year success with an ecommerce site.