6 Advantages of Pre-Orders on Shopify Sites
Used the right way, pre-orders can be a powerful tool for selling your products and building customer excitement alongside revenue. They allow customers to order products before they actually become available, providing both insights and predictability to the otherwise unpredictable nature of forecasting. And that’s just the start of the advantages of pre-orders.
It can be so simple: post a product name and description, along with the anticipated availability and roll-out date, and set up a basic structure for a pre-order payment system. Then, start promoting your soon-to-be-available products, and watch the revenue and insights roll in. For such a simple process, it provides a lot of benefits. More specifically, these are the six core advantages of pre-orders on Shopify—and for eCommerce in general.
1. Increase Early Sales and Revenue
Among the biggest advantages of pre-orders is undoubtedly their ability to increase your sales. Especially with the right payment structure in place, they can help you drive the cash flow that might be needed for the final pieces of the production or marketing flow.
It’s a simple benefit. If you allow your customers to order a product even if it’s not currently in stock, your revenue flow becomes more reliable. When you allow them to order that product before it becomes available, you can build your bottom line and a safer revenue flow.
2. Forecast Your Demand and Revenue
In addition to the actual bottom-line impact of pre-orders, they can also help your business forecast what the demand (and, by extension, the revenue) will be down the road. They provide valuable information to your eCommerce business about the anticipation for a given product or service. This can help you plan your production and inventory levels.
The ability to efficiently manage inventory and production levels is impossible to overstate. The average U.S. retailer has an inventory accuracy rate of just 63%. That means that nearly 40% of products in stock could be wasted. Being able to avoid overproduction or out-of-stock notices helps your business make the right product available when your customers want them.
Imagine turning uncertainty into the ability to know with reasonable accuracy how many of your customers will actually want your new product before the final manufacturing or marketing. That benefit grows if you’re selling products like apparel, which come in multiple sizes and colors; you’ll gain the ability to forecast demand, one of the core advantages of pre-orders.
3. Generate Pre-Launch Excitement
Breaking through eCommerce clutter, with users seeing thousands of ads every day, can be difficult. But that excitement is vital in promoting a new product as it gets launched.
So why not start early? Building a marketing campaign about your pre-order process helps you build the buzz you need to turn attention into excitement and excitement into sales. You now have vital content to post on your website, email flows, and social media about your new products before they’re just part of the ‘regular’ inventory.
In today’s crowded eCommerce environment, your audience won’t be patient. They don’t want to wait to buy something when they could get a similar product elsewhere. A pre-order marketing campaign can satisfy that need for instant gratification.
4. Build Customer Loyalty and Encourage Repeat Business
With the right plan in place, another advantage of pre-orders is their ability to engage your current customers. For example, offering special deals or discounts to early adopters allows you to build a sense of exclusivity around pre-orders that can lead to higher engagement and conversion rates in the process.
Within this type of strategy, existing customers are offered the opportunity to be among the first to try a new product or service. You can even treat it similarly to a product test in which they’re encouraged to submit their thoughts and feedback.
The result of this strategy is a potentially significant impact on customer loyalty. It also fosters a sense of community among your current customers, encouraging repeat business in the process. Wrap it into your loyalty program, and the benefits could continue to magnify over time.
5. Create More Flexible Payment Structures
Setting up pre-orders on Shopify and other online stores also comes with built-in flexibility. You (and your customers) can choose from two basic payment structures when purchasing the product early:
- “Pay now” is the most typical pre-order payment structure. Your customers pay for the product in full when they order it. This leads to some of the above-mentioned advantages, like early revenue.
- “Pay later” means allowing your customers to reserve the product, usually through some type of partial deposit. Once the item ships, the full payment is due. It’s a great way to test the market ahead of the release of new products.
None of these options require you to lock into one payment structure or the other. Instead, you can shape your strategy to fit your business plan, cash flow needs, and manufacturing schedule. Collecting payments in advance also helps you to reduce the risk of unsold inventory.
6. Gauge Interest in Future Products or Marketing Decisions
Finally, don’t underestimate the more general insights you can gain from pre-orders based on the way your customers interact with them. In fact, they may just play a core role in helping you determine future production and inventory cycles for your online store.
For example, consider the above apparel example in more detail. If you offer a printed t-shirt for pre-order, the data you get back will help you produce the right quantity of sizes and colors for this specific product. Even better, you’ll have insights for future products, as well. These more general customer insights can inform your manufacturing for all future products, the photos you use in marketing materials, and more.
Setting Up Pre-Orders on Shopify
Of course, the general advantages of pre-orders only matter if you know how to set them up in your online store. Fortunately, Shopify makes the process simple thanks to apps you can easily integrate into the interface. Also, with the right partner by your side, you can maximize your insights and revenue from this tactical step.
Ready to learn more? Get in touch with Future Holidays today to start building a strategy around pre-orders for your online store.