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Steve Sykes, 4 October 2016

you-use-finance-more-often-that-you-think-s-e-rentals-managed-services-sydneyYou use managed service finance to buy more often than you realise.

I’m not talking about using your credit card or taking out a mortgage for a property purchase. More often than not, for medium-sized items, you are using finance to buy things – often without even knowing it.

The classic example is a mobile phone. The iPhone 7 was recently released to mixed reviews – we’re not mobile phone experts so we won’t be reviewing the phone. We’re more interested in how millions around the world managed to get this prized new item into their possession as soon as it hit the market: FINANCE. In particular a term we love here at SER – “Sales Aid Finance” as the finance aids the sale.

Unless you have a spare $1K lying around, you would have used managed services finance at some stage in your life to buy a new phone and you probably didn’t realise you were doing so!

Buying a managed services package

Most of us would have bought a phone on a plan. For arguments sake you might have agreed to pay your provider $80 per month for the next 24 months. For that $80 you get the phone plus a package that includes phone calls, data for internet access and other services the provider may choose to include. In a way, this is a managed service being provided by the likes of Telstra or Vodafone who are using sales aid finance to sell the package to you.

That $80 per month is a finance agreement. You may think you’re paying Vodafone, but I bet Vodafone has a financier behind them providing a finance solution that allows them to sell various phones on various packages.

Why? Because Vodafone (or whoever the supplier is) realises that not everyone has a spare $1K floating around for a new phone. BUT they know that almost everyone has a spare $80 a month. This makes is so much easier for their customers to make the decision to buy a new phone.

Vodafone wins because they’re selling more phones at $80 per month as opposed to trying to sell them outright at $1K a pop, and they know then then have a customer tied to their brand for the next 24 months.

This finance packaging model applies to pretty much any major purchase. Vendor equipment finance applies to any piece of equipment or technology you’re selling. You might be selling photocopiers, IT equipment, a managed service that looks after both, or even green energy solutions such as solar panels. Regardless of your product, sales aid finance can make selling it a whole lot easier, making big price items look much more affordable to businesses watching their cash flow.

At the end of your 24 month phone plan, you usually have the option to continue paying the $80 per month or you can trade up to new technology (I’m sure an iPhone 8 is already the works) on a new plan. Finance can help this occur with your products as well. This helps ensure your clients stay with you at the end of the 24 months (or whatever term you have for your goods).

You use finance packages to BUY things all the time. Start using finance to SELL.

Steve Sykes
Managing Director, S.E. Rentals
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S.E. Rentals are the finance as a service specialists that will help you grow your business by providing finance solutions in an 'all things technology' future. We provide you with the flexibility, scalability and agility to help you achieve your Managed Service objectives, and our unique in-house software platform, Finance Oxygen,  automates the process for you



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