With e-commerce growing at such a rapid rate, you’re probably eager to get out there and grab your corner of the market.
But there’s one problem that seems to keep getting in the way: cash flow.
Money woes are widespread among sellers who pay for inventory upfront, especially if they’ve made inventory mistakes that led to overstocks. If you fall into this camp, you’re not alone. 54% of budding businesses say cash flow concerns hold them back, and at one point overstocks cost the global economy a terrifying $471 billion. 😲
Luckily, pre-order sales are here to offer a clever workaround and help you establish products without emptying your bank accounts.
But what are pre-orders all about? And more importantly, how can you get your business involved?
Join us as we get stuck into why pre-sales are a lifeline for ambitious sellers, and share some tips and tricks to ensure your pre-order campaigns help scale your business. Let’s go!
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A pre-order sale (aka pre-sale) involves listing items for sale on your e-commerce channels before officially launching them. Most times, the goods are yet to go into production, and some might even be in the development stage.
Pre-orders offer customers the opportunity to get early access (and even early-bird discounts), helping the product gain more traction. In turn, you get to understand what your customers are into today and you’ll get to make some cash nice and early in the game. It’s a win-win.
If buying stock upfront works well for your business, you might wonder why to bother using pre-sales to fund your growth. But your success using the traditional sales model is the very reason to pre-sell.
If you have the customer base, products, and channels already set up, you’ve already done most of the heavy lifting.
Here are a few of the major benefits pre-sales offers:
Think your store could do with the extra cash from pre-order sales? Find out how SellersFi can help you get set up.
To craft a fantastic pre-order sales campaign that gets your customers raving, you’ll need an equally awesome plan.
Let’s get into the key steps you need to smash your pre-order sales:
To bag your first pre-order sales, you need to focus your efforts on developing attention-grabbing items that will get people talking.
If the product has viral potential (e.g., a product that’s the first of its kind), even better. For example, Apple regularly launches new releases on pre-order, and in 2020 the iPhone 12 sold a staggering 800,000 units in just 24 hours!
Here are some questions to ask before creating a new pre-order product:
To close more pre-order sales, make your offers so tempting that site visitors will gladly queue for them. For inspiration, think of the Black Friday-style deals that get customers so engaged they’re waiting in line hours before opening.
To add extra value and ensure shoppers can’t resist, you could also limit the number of people who can claim the pre-order deal, or run different discounts throughout your campaign.
Here are a few more tips to get shoppers flocking to your store:
For an extra kick, look at the offers your competitors are putting out, then find ways to outdo them to make buying your products the single best option for shoppers.
It’s important your sales channel facilitates pre-sales and has the right features to help you collect orders, track the pre-sale campaign’s progress, and drive important conversions.
For example, on Shopify, you can integrate a pre-order sales app and gain access to features like countdown timers, partial payments, and mixed cart alerts (for when someone buys an in-stock and pre-sale item at once).
Depending on your goals, you can even consider crowdfunding platforms like Kickstarter and Indiegogo which allow you to pitch your product ideas to individuals for funding. Remember to assign enough budget for high-quality marketing campaigns, which are vital to stand out from the crowd, and watch out for crowdfunding platforms’ fees (they can go all the way up to 12%).
From upsell apps to chatbots, there’s no shortage of ways to improve your pre-order sales sequence to boost sales. Here are a few options:
To increase the odds of pre-order sales going through the roof when you launch, you need to prepare in advance. For example, if you give yourself 90 days instead of 30 days to warm up prospects, you’ll have a greater chance of succeeding.
To nail your pre-order launch, make sure you:
Finally, remember no one will have your back like your super fans when it comes to pre-order sales, so create marketing campaigns that speak directly to them and then watch them come out in full force. 💪🏽
To get your ideas off the ground, look for a flexible e-commerce funding source that will allow you to use the cash for anything related to your business.
Working capital funding works well for these projects. For example, at SellersFi, e-commerce sellers can get credit or a revenue advance from our working capital solutions. Online store owners use these for many tasks like buying new inventory, stabilizing cash flow, and marketing expenses.
Whichever funding option you choose, set it up before you go full steam ahead on your idea to avoid any cash shortfalls.
As much as we want to have a huge wait list and maximize sales on D-day, remember that at its core, a pre-sale is a test drive before you commit 100% to a product. Here’s how to use this to your advantage and let your creativity run wild:
If a product doesn’t take off, don’t lose heart. See it as an insight that has saved you money because you didn’t invest a large sum into stock. Now you’re free to invest your resources into the next swing.
Pre-sales offer a great way to dip your toe into the e-commerce waters without fear of drowning if your idea fails to inflate. And if it’s a success, you walk away richer. 👍🏼
The right pre-sales campaign will help you get paid for product ideas before they start racking up costs, uncover new products your customers love, and can even be the starting point of a solid revenue source.
Look for interesting items to help grow your brand, and who knows — your next pre-order campaign might be the vehicle that skyrockets your sales.
Need e-commerce funding to kickstart your pre-sale story? Find out SellersFi can help.
