E-commerce has exploded, and it continues to exploding, as anticipated.Not only do PCs, but also smartphones and tablets, are used for shopping.Customers adored the concept!The market and competition for e-commerce are huge; the question now is how to keep up and advance.
Put yourself in the shoes of your customers and use the word “empathy”!Although your products are excellent and your target market spans all credit ranges, the majority of your customers fall into this category.Let’s say you sell clothing because everyone needs it.If you don’t have a credit card or a low credit limit, you don’t want to be unable to purchase clothing, do you?A credit card is not available to everyone.
Financing comes into play here.You’ve heard of it, I know.E-commerce financing differs from auto, house, cash, and so on.How does it benefit you?
A credit card is not available to everyone.However, not everyone who has credit cards makes payments on them.How can you assist the man who earns the minimum wage, has a job, good payment history, and a guarantor?
Easy!
#1 Don’t think you’re just helping the guy; look, the guy is also helping you and your business!If you provide a financing option for an eBay or Amazon product that cannot be easily purchased without credit cards, you capture a significant portion of the market—people who do not have credit cards.
Number two: Be aware of the various forms of e-commerce financing. Financing means making a product more affordable for customers while simultaneously increasing sales at higher values.E-commerce financing can be pursued in two ways:
A. Plain Financing: You just find the leads, check their ability to pay, and finance any product you want.
B. Retail Financing: You sell a particular product or service and offer financing as a means of payment.
#3 Know who your customers are. There are three broad categories:1) Individuals with credit scores between 680 and 850 and high credit limits (not your financing target);2) People with scores between 600 and 650, typically having credit cards with limit of $600 or GE capital (the ideal targets!);And, if you don’t have a credit card, those with scores between 300 and 599 are ideal for layaway programs*. Know your risks as a financier: financing wouldn’t exist if it wasn’t profitable.However, as with any business venture, there will be dangers to be aware of.One of these, though it’s rare, is when a customer rips you off while you’re shipping the product—like when they get it but don’t pay you or when they choose to return or exchange it.Don’t worry because you can… #5 Protect Yourself and Your Business-The Problem in #4:What happens if a client cheats you?To cover these expenses, you charge twice or three times the value of the product you finance.However, that is not the only way to secure financing for your retail or simple business.When a customer expresses an interest in receiving financing, he submits a form for evaluation and signs an electronic (e-commerce)/e-signing agreement outlining your “financing terms & conditions,” such as paying the restocking fee, among other things.
That concludes our discussion:the fundamental steps to successful e-commerce financing.Also, keep in mind that you won’t have to start financing with money you already have.You can get financing from banks and “middle men,” also known asdepending on your business’s situation (number of years, operating costs, turnovers, etc.), financing firms (to whom you would be accountable)
