Jewellery, like other luxury items, can get pricey – making it difficult for jewellers to sell to potential customers who don’t have enough cash.
As a jeweller, the right financing options for your customers can improve your sales and customer relations.
On that note, we take a closer look at Buy Now Pay Later (BNPL) and the other great financing options which are available for jewellers.
Financing Options
Understanding Buy Now Pay Later
As the name suggests, BNPL is a financing option that allows you to buy goods or services and pay back at a later date, conventionally over instalments, and usually without interest.
It is a short-term loan with no interest and, for a customer, it is a great financing option.
The plan allows customers to purchase items with ease, while at the same time, allowing jewellers to receive payments upfront.
BNPL plans are widely used in the jewellery industry because of the high prices of the items sold.
This plan helps customers who may not have been able to purchase jewellery outright.
Another benefit is that BNPL plans offer more flexibility, which will come in handy especially if you’re experiencing a low-income period.
Online Personal Loans
A personal loan is money borrowed from a financier to use for personal purposes.
Financing a jewellery purchase is one such case you could use a personal loan to fund.
These loans are typically offered by banks, online lenders, and credit unions.
One great thing about personal loans is that they have the advantage of being easier to obtain and have less stringent conditions than traditional loans, which makes them more readily available and widely accessible.
Another advantage of obtaining an online personal loan is the faster turnaround time.
It will generally take a few days to get your money when you apply for a personal loan online, whereas a bank loan can take as long as a few weeks or months to fully process your funds.
It is important, however, that customers carefully consider the terms of the loan and make sure they can afford the payments before taking out a personal loan.
Layaway Programs
Aside from BNPL and online personal loans, another top financing option is the layaway program.
A layaway program is a financing option that allows customers to purchase goods or services by paying for them over time.
With a layaway program, the customer pays an initial deposit on the desired item and then makes instalment payments after that.
Layaways typically work in the following manner:
- Choose The Item You need to first choose a purchased item before you get started with the layaway program. At this step of the procedure, you must choose an item you can afford, this makes it easier to complete your payments down the line. After you’ve chosen your item, you can then make the initial deposit.
- Payment Schedule After selecting the jewellery and making the down payment, the customer and jeweller agree on a payment schedule that specifies the amount of money the customer will pay and how often. These payments are usually made weekly or bi-weekly over a set period, such as three-to-six months.
- Fulfilment When the agreement is formed, the jeweller holds onto the item until the customer pays off the entire balance. Once the total sum is paid, the customer can proceed to take the jewellery home.
Layaway programs typically don’t carry interest, making them a perfect fit for customers who don’t want to accrue debt.
The program also offers a flexible payment schedule that is customized to fit the customer’s budget, while also helping the customer become financially disciplined by avoiding impulse spending.
However, customers should carefully consider the terms of the program, including any fines or penalties for late or missed payments, as well as the potential risks associated with the product, like discontinued production, or a sold-out items.
