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Clue #9 - Pay Up-Front For Discounts
You can always get a better deal by paying for
your services in advance, but you need to know why. Know in advance
whether you are being offered a discount for up-front payment as
a fair incentive for pre-payment, or as a gimmick to lock you into
a contract for a poor service.
Many service providers offer attractive discounts to entice you
to enter a one- or two-year deal with up-front payment. By understanding
why such discounts exist, you can decide if they are for you or
not.
Your cash has a value of its own. If the cash general interest
rate for borrowings is 10%, then you should expect a 10% discount
for up-front payment right? Well, no actually. The difference for
a provider between receiving your cash every monthly or all up-front
is the same as about half that of the normal interest rate because
by half way through the year they have half your money anyway, under
a monthly plan.
So why do some suppliers offer big discounts? Here
are just a few reasons:
- If their product is poor, they want to lock you in
for as long as they can before they lose you.
- They may not intend sticking around to deliver the service
that you have paid for.
- They may be charging way more than their product is
worth in the first place.
Despite this, up-front discounts can be good,
if you buy them for the right reasons. From a reputable supplier,
a modest up-front discount is a fair return for them receiving your
money in advance. You are relieved of the burden of processing payment
every month, and so are they.
Cash always has a value, and in almost all cases smart companies
will offer a discount for up front payments. If you are committed
to your Internet strategy and you are certain that you understand
have control of your Internet assets, then start reducing your overall
expenditure by negotiating a discount for up front payment.
You should be able to secure discounts for your:
- Domain name
- Hosting and Email
- Internet Access
In this brief recommendation, we have suggested
that Internet services are no different from any other service and
that you should be able to get a better deal if you pay in advance,
but that you should be wary of extravagant discounts.
Ask your current or prospective supplier of Internet services what
type of discount you can secure by paying in advance, and check
their competition if they are not willing to participate in your
effort to reduce costs.
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