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by londons_explore 1914 days ago
The word "subsidy" is unclear to me... I'd understand it far better if you just said "We charge you an 11% fee for all finance arranged through us".

Kinda odd to have fees that big though... I thought the norm in the industry is to pay money the other direction, with the understanding that a good portion of customers will fall behind on finance payments and then have to pay sky high fees and interest rates for decades to come...
1 comments
RobKanda 1914 days ago
These fees are actually representative of the fees charged to retailers to offer 0% financing options. We don't hide these fees from the tradespeople, so they can decide to up their price to include that fee if they wish, or can choose to swallow the cost to win more work. We put the power in their hand to decide how they want to handle each situation as they see fit
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londons_explore 1914 days ago
Why do retailers push financing options so hard if they only get 9% less money?

Lots of stores (here in the UK at least) will, after you've decided to buy a product try to persuade you to use their financing. Sales reps usually get bonus only for customers who use financing. I always assumed companies earned more if you used financing.

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PragmaticPulp 1913 days ago
> Why do retailers push financing options so hard if they only get 9% less money?

Typical financing options like Affirm only charge 2-3% to the retailer.

The 0% financing is a bit misleading as they're just collecting their profit up front as a separate fee (the 9-11%) instead of collecting it as interest over the course of the payback period.

Expecting contractors to take a 9-11% cut out of their profits is not likely, at least in my area. Realistically I'd expect contractors to raise their quotes by the amount of the financing fee so they come out at the same final payment amount.

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RobKanda 1914 days ago
We're a UK founded and based company, so we see this all the time as well. The finance option makes it a lot easier to sell to a customer - if you're told you can pay £700 for a TV today, or take it away and pay £30 a month for 2 years, most people would rather take the finance. I don't know why the sales reps would only get commission for finance sales, but the stores would rather take a small loss and make a sale than lose a customer to a high price.

For our tradespeople, most of their customers know they can get finance from companies like British Gas. Even though our tradespeople would be cheaper outright, BG can offer 0% and so the customer doesn't have to pay it outright. We've had people tell us they signed up to use us for this very reason, with someone even saying BG were £1000 more expensive, but the customer went with them as they could pay monthly!

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