Webinar: From $500 to $1,040: How to Double Your Profit on Every Single Sale
For retail store owners—whether you sell furniture, mattresses, trailers, or high-ticket appliances—the traditional lease-to-own (LTO) model is broken. You pay for the marketing, manage the inventory, and spend hours closing the sale, only to hand the customer (and the most profitable part of the deal) over to a third-party vendor like Snap or Progressive.
Recent shifts in the economy have made this even more painful. Third-party lenders are tightening underwriting rules, decreasing approval amounts, and in some cases, exiting entire states. When they say "No" to your customer, you lose the sale entirely.
But the real sting happens when they say "Yes." When they approve your customer, they often make double the profit you make on your own product.
Think about it: You did the hard work. You bought the inventory, paid the rent, and spent the marketing dollars to get that customer through the door. But because you’re using a third-party lender, you’re essentially acting as a free lead-generation source for their high-margin business. While you walk away with a flat $500 margin on a $1,000 couch, the lender—who took zero inventory risk—is walking away with over $1,000 in lease fees and interest.
You are working for them, and it’s time to flip the script.
The Magic of the "COGS Arbitrage"
The single biggest reason to bring financing in-house is the difference in Cost of Goods Sold (COGS). This is the "unfair advantage" that third-party lenders don't want you to calculate.
Consider a standard $1,000 retail item with a $500 COGS:
- The Third-Party Model: The lender pays you $1,000. Their "cost" is that full $1,000. Because they start "in the hole," they must be extremely conservative with underwriting. Even after a 35% default rate, they walk away with roughly $430 profit—on top of the margin you already made.
- The PayPlan In-House Model: Your "cost" is only the $500 you paid for the inventory. Using that same 2.2 factor rate and the same 35% default rate, your profit isn't $430—it's $1,040.
Because your break-even point is 50% lower than the bank’s, you can approve the "risky" borrowers they reject while still making significantly more money than a cash sale.
Operationalizing the "Approve Everyone" Strategy
The most powerful tool in the PayPlan arsenal is the ability to say "Yes" to every customer who walks through your door, regardless of their credit history.
How is this possible without losing your shirt? By leveraging your inventory margin as your security deposit. If your COGS is 50%, our system allows you to set a dynamic down payment for high-risk borrowers. By collecting a 50% down payment upfront:
- You are instantly "whole": You have recovered the cost of the inventory the moment the customer leaves the store.
- Zero-Risk Upside: Every subsequent lease payment collected is 100% pure profit.
- Market Dominance: You can truthfully market to your community that you "Approve Everyone," driving massive foot traffic that your competitors (who rely on third-party banks) simply cannot handle.
Bridging the "Cash Flow Gap": The 7-Month Crossover
The primary objection to in-house financing is the immediate cash-flow hit. It takes time for the "Waterfall of Payments" to build. However, the data shows that you don't need a mountain of cash to transition.
By strategically moving just half of your third-party deals in-house and closing just three new sales per month through more aggressive approvals, most stores hit the "Crossover Point" by month 7. This is the moment where your monthly lease collections exceed the profit you would have made from traditional cash sales. By year two, you aren't just a retailer; you are a profitable finance company that happens to sell products.
Full Operational Automation: We Do the Heavy Lifting
The reason retailers didn't do this in the past was the "Headache Factor." PayPlan eliminates that by managing the entire lifecycle:
- Automated Underwriting: Instant decisions via Plaid and Experian integrations verify income and identity so you aren't guessing.
- Payment Processing: Funds move automatically from the customer to your bank account via our integrated Servicing Center.
- Accounting & Servicing: Our system handles the Friday-Monday-Thursday retry logic for failed payments, sends automated SMS reminders, and provides full transaction history for every customer.
Comparison: The Parasitic Partner vs. The PayPlan Method
Stop Guessing. See Your Real Numbers.
Every retail store has different margins, ticket sizes, and default risks. You shouldn't make a strategic shift based on "averages."
Schedule a 1-on-1 PayPlan Demo today. We will walk you through our proprietary Profit Calculator using your actual store numbers. We’ll show you exactly how many deals you need to move in-house to hit your crossover point and precisely how much more revenue you’ll generate in the first 12 months.
