Would lay-away work in the DR?

vmhatup

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We were thinking of offering Christmas Layaway for some of our items. Would this be something that would attract buyers?

How would lay-away be implemented for Dominicans?

Thanks.
 

suarezn

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We were thinking of offering Christmas Layaway for some of our items. Would this be something that would attract buyers?

How would lay-away be implemented for Dominicans?

Thanks.

Actually I think it would. I remember years ago that sales people would go house to house with this catalog (a la sears) and sell stuff to people in a sort of layaway form, whereas people would pay a certain amount of money until the item would be all paid up at which point they would get their item.
 

Hillbilly

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Jan 1, 2002
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The "Dominican way" is to charge the price of the item, the real price, not the sales price, and the allow the buyer to pay off the item on a monthly basis. Every payment after the down payment is pure profit in the till.

If you charged a major percentage of your cost up front, you won't be left with a lot of semi-paid-for items later on....

Just so's you know.

Cordially,

HB
 

Castellamonte

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Layaway was invented in the US during the Great Depression because very few people had any money or reliable jobs for decent cashflow. That sounds very much like the Dominican Republic so you might have a very good idea. But like Hillbilly suggested, get your cost of goods out of the first payment so everything that follows is profit. That way even if you have to resell the item (due to non-payment) you have already paid for it from your inventory.
 

vmhatup

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Thanks for your replies.

The "Dominican way" is to charge the price of the item, the real price, not the sales price, and the allow the buyer to pay off the item on a monthly basis. Every payment after the down payment is pure profit in the till.
Let's say the item costs me (the seller) $30, and I sell it for $70. Are you saying I should charge the buyer $30 as a down-payment and then have the buyer make monthly payments of the remaining $40?

The reason I let go of that idea is that I have no way of following up on the buyer after the down payment is made. Let's say he doesn't pay the $10 due in December. What am I going to do then?

That's one of the reasons I'm inclined in doing layaway.
 

vmhatup

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Layaway was invented in the US during the Great Depression because very few people had any money or reliable jobs for decent cashflow. That sounds very much like the Dominican Republic so you might have a very good idea. But like Hillbilly suggested, get your cost of goods out of the first payment so everything that follows is profit. That way even if you have to resell the item (due to non-payment) you have already paid for it from your inventory.

If I'm not mistaken, Hillbilly is suggesting that I deliver the item after the down payment. After the down-payment, the buyer would own the item.
 

greydread

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Jan 3, 2007
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Thanks for your replies.


Let's say the item costs me (the seller) $30, and I sell it for $70. Are you saying I should charge the buyer $30 as a down-payment and then have the buyer make monthly payments of the remaining $40?

The reason I let go of that idea is that I have no way of following up on the buyer after the down payment is made. Let's say he doesn't pay the $10 due in December. What am I going to do then?

That's one of the reasons I'm inclined in doing layaway.

I read: You buy (wholesale) the item for $30. You sell the item (retail) for $70 with a down payment of $30 and maybe $5 per week/month in payments. Your cost is paid. Every payment of $5 which you receive is profit on that item (overhead notwithstanding). Upon receipt of the final payment (#9) the buyer recieves their merchandise.

I would add that if three consecutive payments are missed, the item returns to inventory and the buyer forfeits the merchandise.
 

jrjrth

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~I think what HB was stating is that you collect your cost upfront with the deposit FIRST....then you "Lay the merchandise AWAY-in your store or storage"....the client comes in Weekly or Monthly and makes payments against the balance due until the product is paid in Full....

Full payment received= release of Product to client....

I would also charge a fee for the Layaway plan as they do in the US....
 

vmhatup

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Yeah... I know. It seemed to me that HB was suggesting something else. I also don't understand what he means by charging "the price of the item, the real price, not the sales price, and the allow the buyer to pay off the item on a monthly basis". I'm not sure if 'real price' is the price I pay as a seller.
 

Hillbilly

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What I meant is that if the item cost you $5 and you plan to sell it for $12, you put the $12 price tag on it, let the person take it for $5 and agree to pay you $1.50 over the next 10 months (interest you know...).....or something of that nature. I am not a business man....I just report what I see Dominicans doing here and they seem to be good at it...

HB
 

AlterEgo

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Yeah, but that's not layaway HB. And I'd bet dollars to donuts that you'd never see the person again.

With layaway, the item is taken off the shelf and stored in the back room. They have to come and pay a certain amount every week, or they lose the item and anything they've already paid.

It could work. Maybe.

AE
 

Matilda

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I doubt it would work here. Here you take the item and pay for it after at ridiculously high interest rates. If you dont pay the item is repossessed. Finance here is all about have now pay (a lot more) later, not pay now have later.

Matilda
 

belgiank

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having been in business for 20 odd years, i would also like to add that this system would need a huge capital from the owner/investor.

the owner would have to invest a lot of money over a relative long period of time, and would have to calculate a certain amount of non-sales into it.

If we are talking about clothing, or generally fashion items, forget it.
 

kimbjorkland

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I may be wrong, but there's already 'lay away' here. many of my vecinas discuss buying things "in fiao", meaning they pay piece by piece till paid.
 

granca

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I only read this thread because I hadn't the foggiest idea what "lay away" meant. There is certainly something like what you describe here in LT, an outfit calling itself Distribuidora Acevedo S A , I don't know how big they are because we only ever see the same two fellahs. They come round every now and again with a big shoulder bag full of creams, potions, vitamin pills, shampoos, etc. You pick out what you want and they fill out a small card showing how much you owe,you get the goods straight away, our last purchase was a total of RD$550, We paid a deposit of RD$100, then they come round every Sunday morning and we pay them a bit more, last week it was RD$100 today it will be RD$150 but we don't have to wait until we've paid all before we get the goods. They seem to go to most of the households in our pueblocito. A few days after we've paid in full they'll be round again with their big bag.
A number of shops in town work the same system particularly for womens and kids clothes.
 

Como_un_cameron

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HB is correct i've been a witness to this process as well.
Nice people in the barrio's buy furniture and kitchen equipment and pay on a monthly base for one or two years.
The seller will visit barrio's and sells items from a catalog witch he brings with him. While visiting he gets a general idea about the household.
Customers will pay an amount of about 200-2000 pesos each week or each month.
The seller will send a moto concho to collect every week or month.
 
We have bought furnitures and other stuff for our home several times using "down payment" plan. No problem with this in POP.
You need ID, we used dominican ID- so i dont know if other countries ID will do.
After some discussion over paying less, we signed the papers, and everything we bought was delivered to our home as agreed the next morning.
 

Hillbilly

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I am glad that some posters chimed in with some validation because I have seen this working for decades...yes, decades. It is, generally speaking, a person to person thing. Of course for some major items, there are legal ties and even guarantors.

The lay-away concept might also work, but it is foreign to the Dominican. Go to any store, large or small and try it and see the look on their faces...then try the down payment and weekly or monthly payouts and see how much swag you could have come up with.

The key to the small business is the fact that the down payment actually covers the cost of the item, and the other payments plus interest are really pure profit (minus the fee for the "cobrador" ==which is an honorable profession here, BYW)

HB
 

AlterEgo

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The major differences between what is customarily done in DR and layaway are:

1. You don't pay ANY interest/financing with layaway.
2. You don't get the item until you finish paying for it.

If Dominicans realized layaway cost them not a penny more than the item's price, they might consider it. Like anything else new, it would take some time for acceptance/trust. I'm thinking they might be suspicious that maybe after they finish paying for the item and go to pick it up, it might be 'lost' or 'misplaced'. Just sayin'

AE