Are you a consignment store who wants to increase your sales? Read this article and find out how you can double your sales in no time – just by offering an option of a payment plan.
When we think about an expensive purchase that we’re about to make, we are usually torn between two ways to get it: either to save the whole amount or pay it with a credit card.
However, when you’re selling luxury bags – Louis Vuitton, Gucci, Chanel or MCM, – you can offer a third option to your customers who are torn between saving and going into debt. It’s called a Payment plan.
A payment plan is a great way to add value to the bag you’re selling. If your buyer cannot make an expensive purchase right now, they can still get their dream bag and you’ll sell your item.
Below is a payment plan instruction from one of the reputable sellers.
‘Since my wife and I sell a lot on payment plan, I thought I would write something up to assist new and veteran Buyers and Sellers who may not be too familiar with a payment plan. A payment plan is a win-win for both parties. Sellers are able to offer Buyers the option to purchase the bag of their dreams for far less than the interest a credit card would charge. In turn, the Seller makes a small nominal amount for both taking the bag off the market and waiting for full payment to be received.
Request a Down Payment
It is personal choice whether the Seller requests the down payment be done through protected PayPal invoice or Friends and Family. This group allows the down payment to be done through Friends and Family. The down payment should always be a non-refundable amount; the Buyer has to have some financial skin in the game so the Seller knows they are serious. We typically request approximately 20% down payment to hold the bag and take it off the market. Sellers should be steadfast on a significant down payment. If the Buyer doesn’t have enough to put a 20% down payment on a bag, there are risks they will default later in paying for the bag.
Terms of a Payment plan
The length of the payment plan should be based on the price of the bag. An expensive bag should have a much longer payment plan than a more reasonable SLG. A good standard we try and follow is one week for each $100 on a payment plan. Some sellers require weekly or biweekly payment plans but we do not. It is a personal preference.
How to draw up a payment plan
You found a buyer who wants to make a purchase of your item on a payment plan. What now? If you want to do the non-refundable deposit via Friends and Family, you would supply your email address linked to your PayPal account to the buyer. The buyer would then go to “Send & Request,” “Send to friends and family in the U.S.,” and follow the prompts.
If you decide to do the whole purchase through protected PayPal invoice, you would do as follows (If doing the deposit via friends and family, this is the same process you would follow to send a protected invoice once the deposit is received):
1. Log onto PayPal.
2. Click “Send and Request.”
3. Under “Request Money” click “Create Invoice.”
4. Click “Create.”
5. Under “Bill to” enter the Buyer’s email address.
6. Click “Due Date” and scroll to “Due on Date Specified.” Set this date to the day the final payment would be due. We start the payment plan on the next business day after the deposit is received and include weekends.
7. Under “Description” click “Enter detailed description” and enter the item’s condition, print and size so it’s easily recognizable what you’re referring to.
8. Enter the items full* payment plan price in the “price” box *See addendum if you’re not taking the deposit via friends and family.
9. Check mark the “Allow partial payment” box. This will enable your buyer to pay as they go without you needing to send additional invoices.
10. In “Note to Recipient,” we copy/paste our entire listing so there is no confusion.
11. Paypal allows for 5 pictures to be uploaded in “attach files” at the bottom. We typically use our initial picture as well as pictures of the date code, heat stamp and any major flaws of the item. If a buyer disputes a purchase, PayPal will look to these pictures when making a determination.
12. We typically don’t write anything in “Terms and Conditions” as they were already stated in “Note to Recipient.”
13. Click “Send” and you’re done!
*2019 Update Addendum
If you’re not taking the deposit via friends and family, I believe the best way to “take” it would be through a separate line item on your invoice. In order to do this, you would follow all of the steps listed above up to #12 and modifying #8, then do the following:
1. Click “add another line item” which can be found under “description.”
2. In “item name” you would write “non-refundable deposit.” In “price,” you would write whatever your non-refundable deposit amount was. This amount should be stated on your sales post. For example, if you’re selling an item on payment plan for $320 and 6 weeks, asking for $64 non-refundable deposit (20%), you would write $64 in the “price” box.
3. In your first “line item” which you wrote up in #8, you would put the remaining balance of $256 ($320-$64).
4. In “Terms and Conditions,” you should write something like this (using the previous $320 amount as an example):
Buyer and seller agree to a 6-week payment plan. Buyer must pay the balance of $256 by February 10th, 2019. If Buyer defaults on her payment plan, Seller will refund any payment(s) made in excess of the non-refundable $64 deposit and the item will be re-listed for sale. The $64 deposit is non-refundable and non-transferable.
We typically don’t have a payment plan schedule, but if you do, you should put the dates the payments are due and the amount of each payment in order to monitor the Buyer that they are paying in a timely fashion.
1. We have had a few Buyers who believe the bag will ship out after they make the initial non-refundable deposit. Think about it this way: if you buy an item on your credit card, the ENTIRE amount of the item gets charged. You then make monthly payments to your credit card company. If the Buyer gets the item after making a down payment, how can the Seller possibly be protected that the Buyer will continue to make payments as they already have the item!
2. Buyers and Sellers should have open communication. If the Buyer is unable to meet their payment terms, they should immediately be in contact (when they know they won’t be able to pay, prior to the due date, not a week after payment was due) with Seller and attempt to figure out a win-win resolution. I would say the majority of Buyers and Sellers on here are good and honest people. Remember the old adage, “you catch more flies with honey than vinegar.” Honesty and respect go a long way. We have given some Buyers additional time who have come into rough patches in life and could not meet their payment requirements. Be honest and forthright with one another and you would be surprised how understanding people are.
3. Mark your item as “Sold on payment plan” in your post once the non-refundable deposit is received. Once the item is paid off and received by the Buyer as deemed satisfactory, you should then delete your post completely from the group.
4. Keep a worksheet of your payment plans so you can monitor when a payment is received and how much is still outstanding.
5. Ship the item out preferably within one business day after full payment is received. Your Buyer has been waiting for a long time to receive this item and finally has it paid off! Don’t make them wait extra if at all possible.
Good luck to all Sellers and Buyers and happy selling and purchasing on this terrific group!’
Hope you’ll get the bag of your dreams sooner than later!