Let’s Make a Deal

In today’s uncertain economy, hot tub retailers are facing a delicate balancing act: How do you meet customers where they are financially, protect your margins and keep sales flowing? Emily Chin, head of retail services for Wells Fargo, says the answer often lies in optimizing your financing strategy.

Meeting customers where they are

Large discretionary purchases like hot tubs require careful financial planning from consumers. For retailers, strategic, customer-focused financing can help close sales that might otherwise stall.

“The most important factor to consider is really the monthly payment amount,” Chin says. “Customers may have the ability to pay outright, but financing allows them to feel more comfortable by breaking a large purchase into manageable payments.”

According to United Consumer Financial Services, a financing provider that partners with businesses across various industries to offer consumer financing, most customers aren’t prepared — or willing — to pay the full price of a hot tub up front, which can create a major obstacle to closing the sale. Financing addresses this by offering affordable monthly payments, making hot tub ownership possible for buyers who might otherwise postpone or cancel their purchase. Flexible payment options not only remove emotional and financial hurdles but also empower shoppers to choose the model they truly want, rather than settling for what fits their short-term budget.

Chin emphasizes the importance of framing affordability in terms of monthly payments — not just the overall ticket price — to make hot tubs feel accessible rather than intimidating. She recommends introducing financing early and often in the sales conversation, not as an afterthought.

“It’s not making a judgment on the customer’s ability to pay,” she says. “It’s just getting it out in the open, then customers know throughout the sales conversation that it’s an available option.”

Craig Ecelbarger, director of Florida operations for The Recreational Warehouse by Watson’s, agrees that financing can be a game changer.

“Offering financing can sometimes create a sale faster when customer funds are not immediately available,” he says. “Also, it can allow a customer to buy ‘more spa’ than they would be able to do without a financing option. There are some spa-seeking customers who would never have a comfortable enough cash flow to purchase a spa without utilizing some form of financing.”

Structuring the right financing offers

But offering financing isn’t as simple as picking a random promotion to advertise. Retailers must balance their business goals with customer needs — and that requires thoughtful planning.

Chin explains that at Wells Fargo, every merchant can work with a relationship manager who helps structure promotional plans based on their goals, the price points of the goods they sell and even regional customer behavior.

Because there is no one-size-fits-all solution, lower-ticket purchases may benefit from a short-term, no-interest plan, while larger purchases may require longer-term financing to feel attainable. Retailers should consider their product offerings as well as local economic conditions and customer preferences when choosing financing options.

Ecelbarger says his team continuously evaluates what’s working.

“As a Hot Spring dealer, we have a diverse menu of plans available to us, and we tend to offer various plans on a somewhat rotational basis,” he says.

Thinking of financing as overhead

A major hurdle for many retailers is that offering attractive financing options — especially zero percent or long-term offers — can erode their margins.

Chin encourages retailers to reframe that mindset.

“Think about offering financing as an overhead cost — like you would think about marketing, payroll, utilities or rent,” she says.

Rather than treating financing as an optional add-on, Chin recommends building the cost into the pricing structure from the outset.

This shift allows retailers to view financing as an opportunity rather than an obstacle. 

“Thinking about a financing program as something that deteriorates margin can be turned on its head to think about it as something that enhances margin,” Chin explains — by removing the affordability barrier, retailers aren’t limited to selling only the least expensive options and can instead guide customers toward products that better fit their needs and preferences 

In practice, that means setting an advertised price that includes the cost of offering financing. Retailers can then provide a cash discount if a customer chooses to pay up front. This approach ensures margins are protected and customers feel they’re getting a reward if they opt for cash payment — without making financing seem like a loss.

Importantly, from a compliance standpoint, retailers cannot advertise two different prices.

“You want to advertise the all-in price, and then offer a discount for cash at the point of sale,” Chin says.

Ecelbarger monitors the backend costs of financing to keep it sustainable.

“There are different costs associated with various financing options, and we monitor this on a monthly basis,” he says. “Of course, increasing the top-line revenue number can have a strong influence on profitability. It’s difficult to measure exactly how much finance options increase that top line, but we know it has an effect.”

Why financing is more important than ever

With tariffs, inflation and other economic pressures making consumers more cautious, Chin believes financing is no longer optional — it’s essential.

“Offering financing is more important than ever to help customers feel confident that they’re not overextending their budget up front and are still able to meet their lifestyle goals,” Chin says.

She also notes a positive side effect: Customers who finance tend to spend more.

“They feel more confident that they’ll be able to afford the monthly payments, so they may be more inclined to make upgrades to purchase a more premium product that has higher margins [for the retailer],” she says.

Without the pressure of a large lump-sum payment, shoppers are often willing to spend a little more each month to get the features and models they want. UCFS notes that customers who finance are more likely to choose hot tubs with upgraded jets, advanced technology or larger capacities because financing spreads the cost over time without burdening their finances. By making financing a standard part of the conversation, retailers can not only protect but also potentially grow their average ticket size — and improve profitability in the process.

Beyond boosting sales, offering financing can also help stabilize cash flow — a critical factor for healthy operations. As UCFS explains, when retailers partner with a financing provider, they typically receive payment within one to two business days. This immediacy frees up resources to reinvest in inventory, marketing, staffing or other growth strategies without getting stuck in lengthy receivables.

Getting comfortable talking about financing

Even the best financing options won’t help if customers don’t know they exist. Experts at UCFS stress the importance of promoting financing throughout the customer journey — from marketing materials and in-store signage to the sales conversation itself. Bringing it up early removes uncertainty, builds trust and makes financing part of the normal decision-making process rather than turning it into a pressure tactic as part of a last-ditch closing technique. 

However, for many salespeople, discussing terms, interest rates and loan structures feels intimidating. Chin acknowledges this but stresses that education and preparation can make all the difference.

First, she advises retailers to leverage their relationship managers.

“Understand what plans are available and how those plans serve your customers’ needs,” she says.

Retailers should also consider customizing their financing offers. For example, shorter-term financing can be used for smaller-ticket items, while longer-term options are offered only for purchases over a certain dollar amount.

Among the many factors retailers should consider, Chin recommends examining: types of customers, price point of goods, business goals, types of inventory, market area and the sales threshold.

Ecelbarger ensures financing is part of regular training and practice, not a surprise late in the sales process.

“Finance plan offerings are a regular part of our selling program and training,” he says. “Our sellers are conditioned to speak to customers about their payment intentions and offer information and assistance.”

Beyond that, Chin encourages retailers to simply learn about consumer financing.

“There’s often a hesitation to offer financing if you don’t feel confident talking about it,” she says. “Being confident and well-educated enables retailers to be much more prepared having that conversation and answering their customers’ questions.”

The bottom line 

When optimized thoughtfully, financing can be a powerful tool for hot tub retailers. It reduces customer hesitation, helps close larger sales, protects margins and positions businesses for long-term success — even in uncertain times.

“Financing — particularly in this large discretionary type of category — is going to be critical to ensuring that sales continue to come in,” Chin says.

Ecelbarger adds that spa retailers should think of financing like other big-ticket sectors do.

“Sales of properties, vehicles, boats, etc., have always experienced a strong percentage of financing,” he says. “Why should it be different for spas and hot tubs?”