Why might a seller prefer an open account arrangement?

A seller may prefer an open account arrangement primarily because it fosters trust and long-term relationships with buyers. This payment method involves shipping goods to the buyer before receiving payment, which can signify a higher level of confidence in the buyer's reliability and creditworthiness. By allowing buyers to receive products upfront, sellers demonstrate a commitment to building strong, ongoing business relationships. This arrangement encourages repeat business and can enhance customer loyalty, as buyers appreciate the flexibility of being able to receive and inspect goods before payment.

Moreover, engaging in open account transactions may lead to an increase in order volume since buyers feel more comfortable placing larger orders under such arrangements, where they have the benefit of evaluating products before settling payment. This can ultimately result in mutual benefit; the seller gains more business, and the buyer enjoys a convenient purchasing experience that can strengthen their relationship over time.