Vendor program arrangement is a kind of financing arrangement in which finance is offered to the customers as a sales, marketing & deal closing tool.

It benefits the customer, the company and the sales team. Following are the ways in which the Vendor Program is beneficial for the sales team and for the company:

• Sales Benefits

o It is easier for the sales team to close more deals as finance is included as a part of the whole package. Including finance in the whole package makes it easier for the customer to buy the product. In other words, finance adds value to the product.

o Deal closing opportunities allow the sales team to offer discounts on various products & claw back via finance or sell at full price but offer low cost finance! That is, these opportunities present via what is called as ‘price flexibility’.

o Fast finance decisions help in making the customers less prone to changes of mind or finding a better deal elsewhere. Do not allow others to offer finance to your customers. If you entertain customers who need your service but not finance, you will lose control of the interest rate. As a result of the same, sales could be lost or delayed.

o Additional Leads can be gained by implementing innovative pricing schemes.

• Company Benefits

o Offering finance presents a tough competition in the market. As the customer keeps trading in and trading up with the same company, the competitors do not get a look-in.

o It becomes easy to control the second hand market as the used equipment comes back to the vendor.

o The vendor’s profits from the maintenance activity can be enhanced if the Vendor maintenance is made a condition of the leasing.

o A good amount of commission can be earned by the company on finance deals for filling in a simple finance proposal form.

o The company can choose whether to earn a commission on any deal because it is the company that sets the interest rate. Moreover, any commission earned is always equivalent to a cent percent profit.

o The commission on finance sales allows the company to employ extra salesmen with the profits. This, in turn, generates higher profits.

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