Taking orders from customers for products before they become available for public purchase is a clever tactic used to drum up interest and create a buzz in the build-up to 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 for securing the funds needed to develop a product or service for the market. And for early-stage startups, especially in the current climate, revenue from pre-orders could be key to kickstarting their new business.
A pre-order sales strategy helped U.K.-based nail-tech startup Glaize to get off to a flying start. Founder Gina Farran says: “Because we manufacture everything in-house, we didn’t have full visibility on which colors would sell well and which wouldn’t. With pre-orders, we can model our production runs based on actual customer orders, which reduces wastage and ensures we use only necessary amounts of raw materials.”
Taking orders from customers for products before they become available for public purchase is a clever tactic used to drum up interest and create a buzz in the build-up to 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 for securing the funds needed to develop a product or service for the market. And for early-stage startups, especially in the current climate, revenue from pre-orders could be key to kickstarting their new business.
A pre-order sales strategy helped U.K.-based nail-tech startup Glaize to get off to a flying start. Founder Gina Farran says: “Because we manufacture everything in-house, we didn’t have full visibility on which colors would sell well and which wouldn’t. With pre-orders, we can model our production runs based on actual customer orders, which reduces wastage and ensures we use only necessary amounts of raw materials.”
One of the most effective ways of securing pre-orders is through crowdfunding. Alan Mosely and his wife are the founders of smart baby sleep aid SleepaSloth, which they’ve been self-funding and overseeing the development of the idea and prototypes since 2019. They are now working on a Kickstarter crowdfunding campaign for September to secure pre-orders, get feedback and create a community.
“Pre-orders help you secure the funding you need to move forward with the manufacturing of your product,” says Mosely. “Creating a hardware product or device requires a significant amount of capital upfront to create the tools used by your factory to create your product. Factories also require a minimum order quantity, typically 1,000 units or more, to even begin building your product. You will need to pay half of this upfront, which is where you can put your pre-order sales to good use.”
