Recreational businesses have seen quite a bump in demand as consumers are getting back outside and looking for recreational activities. While this has brought a lot of attention to watercraft sellers, there is still one major obstacle between these consumers and their new boat, canoe, or kayak—the price.
Boats aren’t cheap, and while the other less-expensive watercraft offer a lower-cost entry point to aquatic recreation, they still aren’t exactly priced to be a casual purchase. This leaves watercraft retailers wondering how to ensure they make the most out of this surge in demand, and we think that offering watercraft financing is the best possible answer.
To help business owners better understand why, we are going to answer a few basic questions, which are:
- How do retailers benefit from offering watercraft financing?
- What kind of boat payment plans should they offer?
- How can they get started?
Let’s start with the reason why boat payment plans are such a great option for increasing conversion.
How Do Retailers Benefit From Offering Watercraft Financing?
While it is obvious that consumers may find it convenient to have flexible ways to pay, it may not be apparent to business owners exactly how big of an impact offering them will have on their business. It is important for them to understand what they stand to gain, as ROI is essentially the only figure that matters when making big changes to a business.
Let’s go over a few helpful facts and figures:
- Businesses that offer some form of point-of-sale financing see an average 20-30% increase in conversion and a 30-50% increase in average ticket size.
- Businesses almost immediately see a significant increase in their most important KPIs by simply giving consumers better ways to break up their purchases.
- 50% of consumers have used a buy now, pay later (BNPL) service before.
- Consumers are already used to having convenient financing options available to them, and they are readily adapting their purchasing habits as a result.
- 45% of consumers say they used BNPL to make purchases that would’ve otherwise been outside their budget.
- The most common reason consumers use POS financing is to make bigger purchases on more premium products that they would not have been able to make otherwise.
These are just a few reasons why it is a no-brainer to offer watercraft financing to increase profits.
What Kind of Boat Payment Plans Should Retailers Offer?
Marine retail is a unique business, and while most financing options are pretty versatile, some clearly fit the watercraft market better than others. It is vital that business owners ensure that they offer the right tools, otherwise, they may risk losing customers that would’ve jumped on board under the right terms.
The best watercraft financing options include:
- BNPL payment plans
- Watercraft Loans
- Watercraft leases
BNPL Payment Plans
BNPL payment plans are the most flexible option on the list and are therefore the most important. These payment plans work similarly to a loan, with a pre-determined purchase amount being covered in multiple equal payments on a schedule set at the plan’s origination. Although, there are a few significant differences that make these more attractive to a lot of customers than traditional loans, which include:
- Low-to-no interest
- No credit impact (if all payments are made on time)
- More flexible qualification criteria
Short-term BNPL payment plans (4 months or shorter) usually charge no interest at all, and none of them report to credit bureaus the way a regular loan does. This allows consumers to qualify more easily and not risk ruining their credit for a single purchase. The only downside is that BNPL is usually designed for short-term lengths, which works for things like kayaks, paddleboards, and other more affordable watercraft.
For boats, loans and leases tend to be a better option.
Since boats can easily cost tens of thousands of dollars (if not more), BNPL providers may not want to take the risk. Luckily, many fintech platforms can also grant consumers access to traditional loans that better suit the circumstance. These are a familiar financing product, offering predictable payment schedules and reasonable interest rates but do report to credit bureaus. This increased leverage is why loans can provide longer-term lengths without issue.
For consumers wanting to get on the water in something nice without committing to a full purchase, leasing is a great option. Watercraft leases typically look a bit more like long-term rentals than traditional leases. Still, they function pretty similarly in the sense that consumers pay lower monthly payments to take possession of a boat temporarily, then return it to the watercraft seller at the end of the term.
Offer Watercraft Financing With Skeps
Skeps offers a comprehensive, end-to-end consumer financing program that helps businesses modernize their entire payment process. We go above and beyond one-click payment, also offering a one-click application process for several different types of consumer financing, including all of those listed above.
If you’re looking to partner with a forward-thinking fintech company that will keep consumers' eyes on the purchase while offering best-in-class financing, Skeps is the perfect fit.