5 Ways and Steps to Improve Your E-Commerce Business Through FINANCING

As predicted, E-commerce has boomed (and is still booming). People buy not just through PCs but phones and tablets as well. Buyers loved the idea! E-commerce’s market and competition are huge; how do you keep up and advance?

5 Ways and Steps to Improve Your E-Commerce Business Through FINANCING 1

The word is “empathy”-put yourself in your customers’ shoes! Your goods are wonderful; your target market is all credit classes, yet your customers are just coming from the mid to upper scales. Say you sell apparel-everyone needs clothing. Come on; you don’t want to be deprived of clothing purchases just because you do not have a credit card or have a low credit limit, do you?

That’s where financing comes in. I know you’ve heard about it. House, auto, cash, and e-commerce financing is different. How do you benefit from it?

Not everyone can get a credit card. However, not everyone who owns credit cards pays for their credit cards. How do you help the minimum wage guy who’s got a job, good payment records, and a guarantor?


Forget you are JUST helping the guy -Look, the guy helps you and your business in return! If you offer a financing payment method for an eBay or Amazon product (which cannot be purchased easily without credit cards), you get a big chunk of the market-those- those without credit cards.

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Know the types of e-commerce financing -Financing makes a product affordable for your customers while earning yourself. There are two ways you can venture into e-commerce financing:

Plain Financing – You find the leads, verify their payment capabilities, and finance no particular product.

Retail Financing – You have a particular stuff/service to sell and offer financing as a payment method.

Know your clientele -Now, there are three general categories: (1) Those who’ve got 680-850 credit scores with high credit limits (not your financing target); (2) Those with 600-680 scores, typically with $600-limited credit cards or GE capital (the perfect targets!); and, (3) Those with 300-599 scores, NO credit card (great for layaway programs*)

Know your risks as a financier -Financing wouldn’t be around if it isn’t profitable. However, as in any business venture, there are risks you would have to deal with. One of which (but rarely happens) is when a customer screws you upon shipping the product-like, they get it and don’t pay you or get it and opt for a return/exchange. Worry not since you can…

Secure Yourself & Your Business-Issue in #4: What if a customer screws you? That is exactly why you charge double or triple the worth of the product you finance-to fill in such gaps in expenses. However, that is not the only way to secure your financing business (whether plain or retail). As a customer shows interest in being financed, he fills out a form for your evaluation. He signs an electronic (since we’re talking e-commerce here)/ e-signing agreement that states your ‘financing terms & conditions’ such as his payor, the restocking fee, etc.

Now, there you have it: the basic steps to your e-commerce financing success. Also, note that you won’t have to use money from your pocket to start financing. You can have your financing financed by banks and “middlemen,” a.k.a. financing firms (whom you’d be liable to) depending on your business situation (number of years, operating costs, turnovers, etc.).