Manufacturer Or Dealer Considered

This is only one of many ways in which the acceptance may be employed. However looked upon, whether it benefits most the manufacturer, or the dealer, the consumer, or the bank, is a matter of opinion. It might be said, however, that as regards the manufacturer or dealer, the retail trade acceptance permits the marketing of their products without tieing up their capital, and in this way, they are able to lower the price of the merchandise, at the same time being enabled to increase their sales. They have little to lose by the operation of the plan. They receive money for the sale immediately, whereas the consumer is not required to pay for the same in full until a much later date.

The Bank Or Acceptance Corporation Considered

The advantage to the bank or "acceptance corporation" handling the transaction may be judged from the example above given. The only element of risk involved lies in the credit ability of the dealer or manufacturer, but as this is investigated beforehand, the bank enters into the transaction with assurance that its client is reasonably able to back up the risk. The transaction is a profitable one for it and the fields for development are unlimited. The total charges paid above the discount amount are moderate, considering the convenience the plan affords to the dealer and customer.

Customer Considered

As to the customer, it might be said that the advantage he gains is immediate possession of the merchandise without having to pay the purchase price at once, while the charges upon a percentage basis are very low when considered quantitatively. And, it must be considered that the consumer has one year's time within which to settle entirely. The discount of six percent for the period of one year is deducted beforehand. The extra charge of one percent is, therefore, the only one, which may be regarded as reasonable for the convenience which the plan affords.