Dealers have to be prepared to create processes for taking deposits and scheduled payments, segregating the inventory (although Xtreme Machines’ Wendy Hall says layaway bikes may sit on the sales floor with a “sold” sign on them), and accounting processes for when revenue is realized.
That’s one of Milevsky’s big problems with layaway.
“It’s like having piles of cash. They take a small down payment on something. Then they have something tied up in inventory and they can’t sell it to anyone else,” the self-professed layaway curmudgeon says. “Sales are not too bad, but it’s the balance sheet that is choking them to death.”
But, done correctly, Davidowitz says, “the benefits are substantial. More business, more profit, more everything. If you get it right, this is an opportunity to do more business and make more money. You may even be able to use it in your marketing campaign to bring in more customers.”
Read more: Dealers Revive Layaway Programs