- A presale is the sale of products you haven't yet created.
- It's essential to set up your presale strategy properly to ensure that it's ethical.
- Only do a presale if you're sure you can deliver on time; failure to follow through can seriously damage your company's reputation.
- This article is for business owners interested in running a presale to introduce a new product, gauge interest or fund early operations.
Whether you're just starting a business or introducing a new item into your existing product line, presales can be an excellent way to gauge customer interest. Presales can also 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, founder and director of ThatShirt. "This can give you a chance to iron out any kinks and accurately scale how well your product or service is going to be."
A presale can be a valuable tool – especially if you're just starting your business and want to see how your target customer reacts to your product.
Presales can act as a testing ground for new 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 accomplish this, you're setting yourself up for a successful presale.
What is a presale?
A presale is selling a product or service before it's released. This means you're potentially selling products that haven't even been made yet.
While it can be a precarious situation for some small businesses, if you remain ethical and set up your presale correctly, you'll be able to keep your customers happy. A good presale can be an effective tool for new and existing businesses – you can build anticipation while hedging your bets – but there are challenges as well.
Advantages of a presale
The biggest advantage of a presale is creating 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 standards.
"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 spending more time focusing on your product and less 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, founder of ExpertSure. "By employing this method, the business can adjust their plan and improve quality."
While there are some advantages, setting up a presale also comes with its own list of challenges.
Challenges of a presale
The biggest challenge to implementing a presale is the time you have to assemble your product. Ideally, you'll have time to work out any issues that arise. But you do open yourself up to delays and other quality issues.
"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.
To minimize these challenges, it's essential to manage your time and develop a sound product or service by the time of release. That way, you won't disappoint your customers and hurt your business's reputation.
Importance of a presale strategy
Before you try to presell a new product, it's important to put a presale strategy in place. It may be tempting to rush in and try to wing it with your presale, but this is almost always a bad idea.
A presale strategy will limit the number of mistakes you make or unnecessary steps you take. By thinking through your plan, you'll be able to brainstorm the potential problems that could arise and develop contingency plans around them.
For instance, one of the biggest mistakes many businesses make during a presale is that the product isn't ready on the promised delivery date. Knowing this, you can allow extra time to ensure that your product will be ready.
Taking the time to think through a presale strategy will help you develop a more effective marketing plan. You can figure out how to effectively utilize your resources to get the most bang for your buck. This is especially important for small businesses that don't have much money to spend on their presale.
How to create a presale strategy
Rolling out a presale isn't difficult – it's all about effective marketing. Sheety said that creating product samples is an excellent way to give potential customers a good feel for what you're looking to produce. It can also help you make future sales.
How you market your product and sell to your initial audience is primarily 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 thoughts in mind, follow these basic steps to set up a successful presale:
- Create a campaign. Create your presale campaign on a crowdsourcing site, choose an email marketing service, or use 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 an excellent 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. Use your CRM and make a list of your most engaged customers to reach out to early. As you market your presale and make sales, ensure you're staying focused on the other side of the process: the actual production of your item or service. Pay attention to quality and ensure 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. This feedback will help you continue to improve your product for future customers.
How a presale can help you make a great product
Setting up a presale can be an excellent choice for a small business if it's done correctly. A presale is an outstanding market analysis tool. You can gather initial feedback and test your business idea to see if your new product or service will sell.
While there are many benefits of a good presale, be aware of the challenges. If you do things properly, you can create a great product that your audience appreciates.
Jamie Johnson contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.