How Pre-Orders Can Improve Your Shopify Store’s Cash Flow

Pre-orders can significantly improve cash flow for Shopify store owners by collecting payments before products are officially launched or restocked. This strategy provides immediate revenue while also helping to manage inventory more effectively and testing market demand.

Most Shopify merchants face the same costly problem – money trapped in unsold inventory. You either can’t keep up with demand and lose sales, or you’re stuck with excess stock draining your bank account. When every dollar counts, having thousands tied up in warehouse shelves can hurt your business growth.

This is why more Shopify store owners are turning to pre-orders. Instead of gambling with inventory predictions, pre-orders let you collect payment before stocking up. 

In this guide, we’ll show you exactly how to make pre-orders work for your Shopify store, no matter what you’re selling.

The simplest and most effective type of pre-order for improving cash flow is the made-to-order model. Customers pay upfront, merchants collect the money first, and then use the funds to produce or purchase the items to stock on their ecommerce store.. This works especially well for custom products, seasonal collections, or when testing new product lines without the risk of excess inventory.

There’s also the deposit-based pre-order, where customers pay a percentage upfront to secure their order. While this provides some cash flow benefits, it’s less effective than full upfront payments and adds complexity to your order management. 

Traditional pre-orders for upcoming products, like game releases or tech gadgets, might build hype but don’t offer the same cash flow advantages as made-to-order since you still need to purchase inventory ahead of time.

Full upfront pre-orders are the clear winner for your cash flow. When customers pay 100% upfront, you get immediate working capital, cleaner bookkeeping, and a higher customer commitment. Also, upfront pre-orders can lead to lower cancellation rates compared to other sales methods. 

On the other hand, deposit-based pre-orders can help you capture price-sensitive customers who might hesitate at full upfront payments and can be particularly useful when launching new, expensive products or entering unfamiliar markets.

Pre-orders fundamentally transform your cash flow by letting you collect revenue weeks or months before paying suppliers, effectively using customer money to fund your growth. 

Instead of tying up $50,000 in inventory that might sell over six months, you can use that capital for marketing, new product development, or scaling your business. 

With preorders, every inventory decision becomes a calculated move rather than a guess – eliminating the risk of dead stock. As you can probably tell by now, the benefits are numerous. Let’s review a few of the most important ones for your Shopify growth.

By allowing customers to place pre-orders, merchants receive payments upfront. This influx of cash can be crucial for funding production costs, especially for small ecommerce businesses or those launching niche products.

Here’s a perfect example with the UMBRA Noragi Jacket: A high-end piece that takes 6-8 weeks to produce. When 50 customers order this jacket, that’s nearly €13,000 in immediate working capital the Shopify merchant can use for production, without touching their own funds or taking loans.

Pre-orders help businesses align their inventory levels with actual customer demand rather than relying on forecasts, which can often be inaccurate.

Instead of draining your bank account to fill a warehouse, you’re using customer payments to fund your inventory. When you have 200 paid orders on hand, you know exactly how much to produce — no guesswork, no excess stock, just efficient use of your money.

Running pre-orders means you’re only storing what’s already sold — no more paying for shelf space for items that might sell someday. You can finally say goodbye to high storage costs.

Looking at Eterna Jewellery’s diamond band set, pre-orders eliminate the risk of stocking expensive precious metals and diamonds that might sit unsold in a display case. This approach is particularly valuable for high-value items like gold jewelry, where tying up capital in stock could severely limit a store’s ability to grow or introduce new designs.

Launching a product as a pre-order serves as a market test, providing valuable insights into consumer interest and acceptance. This feedback can inform adjustments to the product or marketing strategies before a full-scale launch.

With pre-orders, you’re not just guessing what customers want – you know exactly what they’ve bought. This means you can go to suppliers with confirmed orders and actual numbers. Plus, since you’re working with real customer money, you can often negotiate better payment terms or bulk discounts.

By securing sales in advance, businesses can mitigate potential losses from unsold stock. This proactive approach allows for better financial planning and reduces the need for additional financing.

You’re not gambling on trends or hoping products will sell – you’re building to match exact demand. This means no more clearance sales eating into your margins or dead stock tying up your capital.

The beauty of this system is that it puts you in control. You can do product launches based on real demand, and maintain healthy margins.

Pre-orders can create excitement and anticipation among customers, creating a sense of urgency that encourages purchases. Early adopters who place pre-orders often become loyal customers, with repeat sales and positive word-of-mouth marketing.

Take the gaming industry – when a new title launches, players eagerly pre-order months in advance, creating massive hype and guaranteed sales before the game even exists. This same psychology works for any Shopify store: customers who pre-order feel like VIPs, getting exclusive early access and becoming emotionally invested in your products. You’re building a community of excited customers.

Incorporating pre-orders into a Shopify store’s sales strategy not only improves cash flow but also improves overall operational efficiency.

Using specialized tools like the Timesact Shopify Preorder App, you can easily manage pre-orders without the usual complexities of tracking inventory and managing customer expectations.

The goal isn’t just to sell products, but to build a more financially stable and scalable business model. On this path, make sure you book a discovery call with us to help you get things done the right way.