When Ron Bordona, owner of Bordona’s Oakdale Home Furnishings and Appliance realized his business was losing a significant number of big-ticket sales when customers couldn’t qualify for credit, he knew he had to think outside of the box.
With the recent installation of an Aaron’s furniture and appliance store with a similar business model as a lease-to-own structure and the fact that Aaron’s seems to be thriving in this harsh credit climate, gave Bordona the final push he needed to seek out credit alternatives for his customers.
“We started seeing a trend with the effect of the economy on credit,” Bordona said. “We looked over past deals and realized we were losing business to credit issues. I was actually surprised at the number but we lost some pretty big deals because of that. In this economy, every deal counts.”
Bordona and the Rent-A-Center (RAC) associates started talking about four months ago in what would become fortuitous timing as RAC had actually been looking for suitable businesses with whom to partner with during these tough times.
The fact that Bordona’s has a long history of stability and a loyal customer base worked in its favor as RAC was reluctant to seal the deal with a business that might end up shutting its doors in a year or two.
“They (RAC) were interested our product mix as well. They liked that we offered a range of products from appliances to home furnishings,” Bordona said. “Their business model is a completely different model than what is used by traditional models. Of course, it’s all about quality products and competitive prices. We’re extremely lucky to have them.”
But before Bordona sealed the deal, he did a little asking around in the home furnishings circle and discovered there was nothing but good feedback. In the end, it just seemed the sensible thing to do.
“It’s a new economy out there and we have to make changes to stay competitive,” Bordona said.
The way it works is, Bordona gave up a portion of floor space for the RAC representatives and RAC purchased a certain amount of merchandise from Bordona’s. If a customer has difficulty qualifying through traditional means of credit, they have the option of going with a RAC purchase.
The benefit is obvious: Bordona’s quality of furniture with the more forgiving terms of the RAC business model.
However, nothing that must be installed, such as appliances, are available for a RAC deal.
“We’re truly blessed with a loyal customer base, which are mostly made of the baby boomer set but we need to start attracting younger customers as well,” Bordona said. “While the economy affected everyone, it seems the younger generation was hit pretty hard by the times. We like being able to offer another option to our customers, when previously, we didn’t have anything available if they couldn’t qualify for credit. It’s also a good opportunity to rebuild credit and these types of things help.”
An added bonus for Bordona’s has been the walk-in traffic from existing RAC customers coming in to pay their bill.
“We’re already seeing more traffic through the store,” Bordona said since unveiling the signage and going public with the partnership two weeks ago. “What’s really nice is that RAC customers from Oakdale are happy to have a local payment center.”
For more information on the new RAC options at Bordona’s, call (209) 847-0351.