How to Execute a Successful Pre-Order Sales Strategy

Receiving customer orders for products before they are available for public purchase is a smart tactic used to generate interest and create buzz in preparation for a new product launch. Customers love pre-orders because it means they can get their hands on a product before anyone else.

But pre-order sales aren't just about getting the customer excited. They can be a powerful tool in obtaining the funds needed to develop a product or service for the market. And for early-stage startups, especially in the current climate, pre-order revenue could be the key to getting their new business off the ground.

A pre-order sales strategy got British nail technology start-up Glaize off to a flying start. Founder Gina Farran says, “Because we manufacture everything in-house, we didn't have full visibility into which colors were going to sell well and which weren't. With pre-orders, we can model our production cycles based on actual customer orders, which reduces waste and ensures that we only use the necessary quantities of raw materials. »

The team started by building a waitlist nearly a year before launch, through a combination of organic content that helped build a community on social media, some media coverage, and experimenting with lead generation ads.

"By the time we opened pre-orders, we had over 4,000 people on our waitlist," says Farran. "They had been waiting a long time, so we first opened up pre-orders to them exclusively to thank them for their patience. Our strategy helped us launch the business with a bang."

Crowdfunding is one of the most effective ways to get pre-orders. Alan Mosely and his wife are the founders of the SleepaSloth smart baby sleep aid, which they have self-funded and overseen the development of the idea and prototypes since 2019. They are currently working on a Kickstarter crowdfunding campaign for September to to secure pre-orders, get feedback and build a community.

"Pre-orders help you get the financing you need to continue manufacturing your product," says Mosely. “Creating a product or hardware device requires significant initial capital to create the tools your factory uses to create your product. Factories also require a minimum order quantity, typically 1,000 units or more, for even start manufacturing your product. You will need to pay half of this deposit, which will allow you to put your pre-order sales to good use."

Martina Schwarz, founder of Blackmarket, launched a crowdfunding campaign on Kickstarter last year to determine if there was enough demand for her product and to help with cash flow for the first production run .

She says. “I was amazed at the support we received; a supporter in Australia pre-ordered for £180 of handwashing. We have considered doing another pre-sale for future product launches, but it's always about balancing the time investment for the pre-sale campaign, with the economies of scale and cash benefits."

In addition to easing financial pressures and increasing cash flow, a pre-sale strategy can be a valuable way to gauge an audience's interest in the offer, as EJ Trivett explains. , founder of creative business incubator Thrively.

She says, "If pre-sales are tough, that's a strong indicator that the offer may need to be refined, the messaging needs to be tweaked, or it just isn't worth it. grow further, which is why we urge our learners to 'test before you invest'.”

But as she also points out, post-Covid has seen a shift in consumer spending habits. The online space in particular is more saturated and people are buying a lot more at the last minute than before. "For startup founders, this is where our coaches work on their mindset as well, because it's a tough time to sell anything, and they need to hold on...