Layaway is a payment plan that allows a customer to put aside a product so that they can pay for it over a period of time. Once the consumer has successfully paid for their item, they are then allowed to claim full ownership over it.
As a store or someone who wants to implement layaway for products you are selling it can be quite advantageous as during a period of time when money is tight you will have plenty of customers who prefer this method of purchasing.
Many existing stores still use layaway and it has proven to be quite an effective form of selling. However just like anything there are factors to consider beforehand. Here are some things to consider before you include the payment plan layaway at your store.
How many customers do you have?
If you are still a small store then layaway might not be the ideal plan just yet. Since layaway only requires part payments it is important to ensure that you have many people who are on a layaway plan or the same number of customers buying items at full price. This is important in order to manage your cash flows and ensure you have a substantial amount of money coming to your store monthly.
The procedure to layaway
In order to implement layaway, you will have to make sure you are following the required procedure and permission. Check what the process requires and how exactly payment plans are supposed to work as it is important to keep track of the customers on layaway.
On what platforms are you applying it?
Usually, layaway happens when customers physically purchase items from a store however it has now also extended to online. A store with online layaway can be quite a good way to attract new customers as online purchasing has become common in the recent past. You will have to monitor your online payments for layaway but it can effective, as many people will be motivated to now shop at your store.
Payment plans and procedures
When a customer goes on a layaway payment plan, they are usually given a set payment plan in order to pay for the product. This will have to set by you or your store policy in order for it to be effective. You will have to set a payment plan that ensures you will be having a frequent flow of income to your business in order to survive.
How credible are your customers?
Having a few customers unable to pay their layaway is common however it should not become a common practice. If you have customers who are regularly unable to make their payments it can be bad your business.
One because these products will have to be put back on the shelf that affects stock counts and also because un-paying customers are not the best to have. In order to have a sustainable layaway method you have to have credible customers.
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