Beginner's Guide to Offering Finance on Online Retail Products

Who Will Find This Guide Helpful?

Hey there! If you run an online shop in the UK or are thinking about starting one, this guide is for you. Maybe you're a small business owner, a solo entrepreneur, or just curious about making your products more affordable and accessible. If so, you’re in the right spot!

What Does "Offering Finance" Actually Mean?

Let’s keep it simple. Offering finance simply means giving your customers an option to spread the cost of their purchase over several easy payments instead of paying everything upfront. It's like turning big buys into manageable, bite-sized costs.

Why Should Retailers Care About Offering Finance?

Great question! Here are some big reasons:

• More sales: Customers are more likely to complete purchases if they can pay over time.
• Bigger baskets: People often spend more per order when finance is available.
• Wider reach: Finance options attract customers who might not otherwise buy due to budget.
• Stronger loyalty: Flexible payment wins customer trust and keeps them coming back.

It’s a win-win for you and your shoppers.

How Does Online Retail Finance Work? (No Jargon!)

Here’s the process, step by step:

1. You (the retailer) team up with a finance provider (like a finance broker such as Kandoo).
2. You add a finance option to your checkout page. Customers see they can spread the cost.
3. Customer chooses the finance option at checkout and fills in a simple application online.
4. Finance provider checks eligibility (quick and easy, often with instant decisions).
5. If approved, the provider pays you up front for the product, while the customer pays in instalments to the finance provider.
6. Everyone’s happy: you get paid, and your customer gets what they want without the upfront sting.

A Snapshot Example

Imagine Sarah, who wants a new sofa from your online store. The £800 price tag is a bit too much for her right now. But she sees she can split the cost into monthly payments. Sarah chooses the finance option, gets approved in minutes, and takes home her dream sofa. You get paid right away. Sarah is comfy, you’ve made a sale.

Jargon Buster: Key Terms to Know

• Finance Provider: The company (like Kandoo) who sets up and manages finance for your customers.
• Instalments: The smaller, regular payments your customer makes to pay off the product.
• APR: The cost of borrowing (interest) spread over a year, shown as a percentage.
• Eligibility Check: A quick check to see if the customer can be approved for finance.
• Retail Finance Broker: A specialist who helps match retailers and customers with the right finance solutions.

Frequently Asked Questions

Is offering finance safe for my business?
Absolutely. You get paid up front by the finance provider, who manages payments from the customer.

Does my customer need a perfect credit score?
Not always. Many finance providers cater for a range of credit backgrounds – it’s all about finding a good fit.

Am I responsible if a customer misses a payment?
No. Once you're paid by the provider, they handle all customer payments and risks.

Will it cost me money to offer finance?
There can be small costs or commissions, depending on the provider. Often, the boost in sales more than makes up for any fees.

Ready to Make Life Easier for Your Customers?

If you think offering finance could help your customers and grow your online business, why not explore your options with a UK-based finance broker like Kandoo? Making shopping easier for your customers helps your business, too.