Every CEO wants their company’s revenue to grow, after all it is one of their primary metrics of success. A sizeable increase in sales is not usually easy to come by and executives must employ creative tactics to continue to drive growth. In today’s competitive multichannel business landscape, companies that don’t think outside the box and develop creative solutions to move the needle will find their days numbered.
One simple tactic that wholesale businesses can use to increase B2B eCommerce sales across every sales channel, is to offer flexible payment terms. Wholesale payment terms aren’t the most interesting topic but they’re a little known secret that's breathing new life into stalling sales organizations.
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Giving customers time to pay for products is a bold yet simple change any business can make that will increase sales. Here are three ways flexible payment terms can boost B2B sales for your business.
1. Try before you buy
No matter whether your brands new or established, cracking into a new market is challenging. Whether you’re selling new products to existing customers or you’re trying to break into a new vertical, retailers and distributors are hesitant to commit to buying unproven products. One strategy that will reduce their risk and improve their cash flow is to give them time to pay for your products.
A 30 or 45 day B2B payment term will supercharge your sales team by giving them an additional closing tactic. Payment terms lower the barrier to entry of new markets and instill an additional layer of trust with your customers. By giving your customers time to sell some, if not all of the product they purchase from you, before paying for it will make buyers feel more comfortable trying new products and taking on brands, especially for their first transaction.
This isn’t just a tool for new markets and products but an important seasonal sales strategy as well. Many industries have a natural ebb and flow for sales, and allowing your terms to be flexible based on your buyers needs will help you both grow. Giving a longer payment term on preseason orders will enable your customers to purchase more product in preparation for the busy season ahead, and give you better insight into your demand forecasts down the road.
2. Incentivize your customers
Not convinced your customers will be excited at the prospect of having extra time to pay for product? What if you offered them a discount for paying early?
Everyone likes cash back, especially your customers! Incentivizing them to pay early on their payment terms with cash back on their invoice is a great way to get them excited about your brand and also develop a good pattern of behavior.
One of the most challenging aspects of building and growing a new business is breaking the mold of conventional ideas. Changing consumer behavior is challenging, but with a little nudge, customers might be willing to try something new, especially if it will improve their bottom line. It’s a win-win for everyone. 3. Double your B2B sales
Combining a B2B eCommerce store with flexible wholesale payment terms can double the growth of wholesale sales. Just ask Elephant Pants CFO and founder James Brooks:
Today, we help 80-90% of our buyers create their orders through the wholesale channel. The terms are determined on a buyer-by-buyer basis. As a result, wholesale has doubled for us over the last two months on a per-week basis.
Extending payment terms can quickly grow your sales volume and average order size in a meaningful way. Assigning credit to all of your buyers is no easy task, so choosing an appropriate term solution that confidently approves your buyers is key to implementing a scalable sales strategy.