- When selling products that you haven't yet created, that's a presale.
- Presales can be ethical, if you set it up properly.
- If you can't follow through on your promise of delivery, your presale will be a disaster to your reputation.
Whether you're just starting a business or you're looking to introduce a new product at your existing business, presales can be a great way to gauge interest in your business, fund early operations and minimize a stressful cold opening.
"[A] presale allows you to obtain feedback prior to releasing to the full market," said Mike Sheety, director of ThatShirt. "This can give you a chance to iron out any kinks and accurately scale how well your product/service is going to be."
A presale can be an interesting tool for small business owners – especially if you're just starting your business and want to test out if your product will do well among whatever audience you're targeting. Presales can act as a testing ground for new products, ideas and concepts for your business. It can also be a great way to build anticipation around a new product or service you're releasing among an already loyal base.
Running a good presale means organizing your efforts and marketing your campaign well. If you can do these two things, you can set yourself up for a successful presale.
What is a presale?
A presale is selling a product or service in advance of when it will be released. This means you're potentially selling products that have not even been made yet.
While it can be a precarious situation for some small businesses, if you remain ethical and set up your presale properly, you'll be able to keep your customers happy. A good presale can be used as a tool for new and existing businesses – you can build anticipation while hedging your bets (to an extent).
Advantages of a presale
The biggest advantage of a presale is it gives you a solid customer base while giving you room to work through any potential issues with your product or service. If you have lead time for a release date and you know people will buy your product, you can focus on ensuring the product is up to the proper standard.
"It allows you to determine if all the effort and investment is going to be worth it for your target audience as well as pointing out any weak spots," Sheety said. "Any issues and weaker areas that arise can be dealt with promptly before creating a huge dilemma when the product is available to the full market."
Having flexibility means you can spend more time focusing on your product and less time worrying about making sales. Presales also provide the advantage of receiving early customer feedback.
"Preselling is a fantastic way for a small business to acquire feedback from a small group of trusted customers through a targeted sale before their product actually goes live," said Ollie Smith, CEO of Expert Sure. "By employing this method, the business can adjust their plan and improve quality."
While there are some advantages, these points should be carefully considered – setting up a presale comes with its own list of challenges.
Challenges of a presale
A presale's biggest advantage and challenge is the time you have to assemble your product. While you should technically have more time to work out any issues, you also open yourself up to delays and other quality issues. Managing time properly and developing a sound product or service by the time of release is the biggest challenge of running a successful presale.
"You can experience delays, defects and quality issues," Sheety said.
The challenge lies in balancing the time you're given to work out your presale.
How to set up a presale strategy
Setting up a presale isn't difficult – it's all about marketing. Sheety said creating product samples is a good way to give potential customers a good feel for what you're looking to produce. It can also help you make sales.
How you market your product and sell to your initial audience is largely up to you – some businesses set up a post on a crowdfunding site like GoFundMe and market that, while others opt to connect directly with an existing audience through email marketing. No matter what you choose, make sure your presale is easily accessible.
"Many companies often ration who has access to the presale to ensure it can only be used by loyal fans," said Steve Pritchard, marketing consultant for fashion company Ben Sherman. "If finding the presale is too hard or complex, customers won't make the effort to sign up."
Pritchard also said presales shouldn't punish fans for their loyalty – there's no point in offering a better deal or product after the presale ends. With these two thoughts in mind, follow these basic steps to setting up a successful presale:
- Create a campaign: Create your presale campaign on a crowdsourcing site, email marketing platform or through your own local distribution network. Set up your own parameters and make sure your product or service is accessible.
- Post your product: Once you've established a campaign, start your presale period so you can start collecting sales and gauge interest in your audience. Now is also a good time to ask for general feedback from your most loyal customers.
- Market your presale: Find ways to get the word out about your presale, whether it's through email marketing, social media marketing or word of mouth. As you market your presale and make sales, make sure you're staying focused on the other side of the process: the actual production of your item or service. Pay attention to quality, if possible, and make sure your customers are getting exactly what's been advertised.
- Release your product and follow up: Deliver your product to the initial buyers and ask for feedback where appropriate.
Setting up a presale can be a great thing for a small business, if it's done correctly. You can gather initial feedback, test the market to see if your product will do well and get set as a new business owner. While there are many benefits to running a good presale, stay aware of the challenges. If you do things properly, you can create a great product that does well with your audience.
A presale "saves the organization precious time and money and allows it to continue to build a great reputation with its target market," Smith said.