McCormick let farmers pay for reapers after harvest

McCormick's mechanical reaper could do the work of several field hands at harvest time, a genuine productivity leap for grain farmers, but it carried a price tag around $120 at a time when most working farmers operated on thin, seasonal cash flow — money came in after the harvest, not before it.

Cutting the price wasn't really available — the machine's build cost set a floor, and competitors selling reapers outright faced the identical problem, so price competition alone couldn't unlock the farmers who wanted the machine but simply didn't have $120 sitting in a drawer in the spring. McCormick needed a way to get paid without requiring the farmer to already have the harvest's proceeds before the harvest happened.

Sold on installments timed to harvest revenue, backed by a performance guarantee, so the machine's own earnings covered the payments.

Farmers had seasonal income, so upfront payment was unaffordable despite the reaper's value.

Deferred payments aligned with harvest revenue, making the purchase feasible.

Performance guarantee reduced risk, encouraging adoption.

Fixed price and demos built trust, accelerating sales.

When customers can't afford a product due to cash-flow timing, restructure payment to match when the product generates income, rather than cutting price.

Sales grew from under 100 reapers in 1846 to more than 4,000 a year by 1860, sold almost entirely on credit. McCormick's installment plan became the standard model for selling farm equipment across the industry and one of the earliest large-scale examples of consumer credit tied to an asset's own future output, a structure later echoed by everything from car loans to equipment leasing.