1. Gadge demand for your products
If your customers are willing to put money up and wait to receive your products that means that they love what you are selling. By contrast if the items get little or no attention you know you could do better. You can generalize this approach to make sure you are only adding items to your store that will sell. And of course you should give up on the products that don’t.
2. Get working capital for your store
As you probably know by now there are costs associated with starting or scaling a Shopify Store. Most of the time we must put up the money to do so and that could easily become a bottleneck unless we go into debt which comes with it’s own set of risks. With the money you can earn through pre-orders you can finance inventory, technology costs, wages and anything else you need.
3. Optimize supplier costs
Bigger is always better when negotiating with any supplier. Remember that they prefer large orders because it enables them to optimize their own business. So you can easily aggregate orders because of the time buffer you create with pre-orders and place larger orders of your own and get a discount for buying in bulk. Make sure to reach out to any supplier that fits this bill.
4. Increase your conversion rate
The average Shopify store has a conversion rate (meaning the percentage of store visitors who actually make a purchase) of just under 1%. The reason why customers don’t buy from you can vary wildly and the Internet if flooded with advice on how to improve and analyse this issue. Discounted pre-orders offers a simple way to cater to a larger audience and thus increase conversion rates.
5. Sell more to impulse shoppers
“Time is Money” can be interpreted in two ways. The first is my time is valuable. I need instant gratification. This is the mantra of impulse shoppers. “I must have this product now”. Offering a discount based on time of fulfillment will only re-enforce this belief in your customers. Because the alternative is to wait they will choose to pay a premium for the product and feel good about the choice because it’s in sink with their core beliefs.
6. Sell more to price sensitive consumers
The second interpretation of “Time is Money” is that by putting in the time to do something, I expect to be rewarded. And this is how a price sensitive consumer differs from an impulse shopper. A bargain hunter will gladly give up their time to get a better deal. In the case of a discounted pre-order, they will choose to wait and will feel good about their choice because they saved money, which again is in perfect sink with who they are.
7. Stop interrupting customer shopping flow
Think about it. It’s the first time I’m seeing your site. I see one product I love and it’s not in stock. OK, I’m moving on, bye! I had a bad experience and all the time, money energy you put into getting me here is wasted. Worst still, maybe you go on a tangent and think I just don’t like your store and products or that something else is the reason why I’m just not buying. A discounted pre-order option would have closed the deal.
8. Get social proof and build trust
A product that has sold out, is not in stock or is coming soon creates an image of existing demand. Existing demand means that other people have found value in this product. That means that you stand a higher chance to gain value from the same product. So you buy it. It’s as simple as that. Our minds are so constantly flooded with information on a day to day basis that any shortcut, any proxy to something valuable is a no-brainer.
9. Encourage demand
Building up on the idea of social proof, discounted pre-orders will naturally increase demand for your products. Tested value by other shoppers gives one peace of mind and our memetic nature as human beings tells us that we must also have those products to fit in and be on par with our peers. Fashion is built around this notion and products that are sold before they arrive in stores are obviously popular.
10. Prime customers easily
Let’s use two scenarios. In A you have a product in stock and you market it in a Facebook Ad. In B you have the same product but available for pre-order. Notice the different tone in your presentation. In A you are saying “Hey I have this cool thing, do you want it?” versus in B, “This cool thing is dropping soon, do you want to be one of the people who gets it?”. Clearly one is better than the other and depending on your time buffer you can drive them crazy for it.
11. Better customer segmentation
When you know about a customer that given a choice between paying full price for the product now or waiting 30 days for a 20% discount they choose the latter it is much easier to sell to that person with a customized discounted coupon strategy. Alternatively to the impulse shopper you can sell more by access to exclusive items or early access at a price premium.
12. Better up-selling & cross-selling
The time buffer you get from pre-orders gives you ample opportunity to upsell and cross-sell to your customers. They must already be on your mailing list. Even if they are not subscribed to your marketing content they still expect emails with order statuses. If the period is 30 days between the purchase and the fulfillment point you have 30 days to update them and showcase products they might like in your emails.
13. Scale your operation with ease
When you have a clear image of your future business levels it becomes easy to grow. If you need financing from a bank or an investor in your business you have solid collateral to offer. If you need to work with a particular supplier or logistics partner your size will be a positive influence on the negotiation. The same goes for any other resource or collaboration you require. Proof that your business is viable will propel you to the top of anyone’s list.
14. Get shipping discounts
Depending on you area this advantage can be bigger or smaller. But if you are working with any logistics company a larger number of orders means more safe business for them and they will be more inclined to offer discounts. Since pre-orders boost sales you will get the numbers to get a better deal from your account manager. Try to use the revenue from pre-orders to offer them more incentives to lower your rates. Pre-order some shipping. If you can do it so can they.
15. Better time management
To illustrate this point let’s take two scenarios. In A you get 100 orders over a 30 day period. So you average 3.3 orders a day. Let’s say you’re dropshipping and have everything automated. You still need to keep an overview and so you need to look ar 3.3 orders coming in and 3.3 orders going out. In total you have 200 operations to monitor. In B you have 100 pre-orders that have to be fulfilled on a particular day 30 days from now. In this case you have just 1 order to place with the supplier and 100 orders going out. 101 transactions in total. You just saved 50% of your time.
16. Increase AOV (Average Order Value)
According to a Shopify study the average AOV internationally is 75$. This of course is based on stores with limited product quantities and therefor the potential for out of stock products. And so it’s natural to assume that a customer who buys the items you have in stock that also has the opportunity to pre-order products will have a larger cart value and will earn you more revenue each time.
17. A more intelligent discounting strategy
A proper discount strategy for your products is paramount. And it is so easy to make mistakes. Discount too often, too much, store-wide, without a time constraint or without a good reason will give your customers reasons to get defensive and not buy. That is why discounting should be liked to an objective motivation like joining your subscriber list or buying past a certain amount. And nothing beats buy now at full price or cheaper later.
18. Marketing is less invasive to customers
If a customers pre-orders something in 30 days, that customer will expect order updates. You thus have a great reason to email them about this information. And naturally you can add content that you know they would enjoy like new upcoming products (more discounted pre-orders), blog or social media posts and sales events. The main point is that you are not interrupting their daily routines anymore, they are expecting news from you.
19. Gives you time to find better suppliers
Time is now your best friend. You now have a lot more time to do research, reach out to suppliers, have a conversation with them and find a much better fit for your store needs. Whether it’s price, shipping time, product quality or white labeling you stand a much greater chance to get your way with them when they know you can wait and find alternatives because you’re no longer in a hurry.
In case you found this article helpful and are now pumped to get started with discounted pre-orders on your own Shopify store but you don’t have the tech resources to build a solution in-house, you’ll be happy to know “there’s an app for this”. It’s called Timesact | Discount Pre-order and you can get it on the Shopify App Store here. We offer a FREE plan for 100 discounted pre-orders a month to help you get started and make your first 7500$.