Preselling products online..

Snowseer

Hey guys

So, I've come for help. I am assisting a friend in growing an online business - buying and selling - identifying niche markets, getting the products, selling them on..

Now, an idea has been raised of preselling products. So, from a survey, to tell consumers that we can provide a product, once we meet the required level of demand. The customer would be paying up front. If the product could not be delivered, the customer would be refunded.

I don't think this would work, but - in fairness - this person has a very focused business-mind, and would be the person to make it work (if it is possible).

So - is it realistically possible to do something like this?

Sorry - it's not my field, but I, personally, do not see how this will work (on a small scale basis) - but I'd love some experienced opinions!

ironclaw

I dabble in online course creation and a lot of people pre-sell courses to bump revenues ahead of time. In terms of physical products, the one that jumps to mind is games, most people are happy to stick down a deposit of similar to secure the game on release day. Kickstart is pretty much an entire ecosystem on the concept. Smaller scale, a lot of car forums do group buys on tyres and parts to save costs for members.

The question is, however, what are the products? If you had the demand, hype and marketing, I can see no reason why it wouldn't work but it would be a hard sell unless the demand is there. Would be far easier in a niche market with a focused pool of people who would be interested.

Axwell

Kickstarter doesnt charge you a cent until the project gets funded - the OP is looking to charge people up front and then refund them if it doesnt reach the numbers required, completely different model and one I doubt people will jump towards.

When paying for a game like you mentioned its a deposit with a recognised retailer, in the OP's case its based off a survey of interest and then putting down the full amount..personally I wouldnt touch it. How long do I have to wait before I know if you have enough demand? How are you going to market it to get interest and make sure you have enough conversions? How can you guarantee supply even at that stage - what kind of goods you are you going to sell?

fritzelly

New company wants my money for a product that doesn't exist with the promise I may get the product if enough people want it all the while keeping my money for some indeterminable amount of time

I suppose some people would be stupid enough to fall for it then be on to Joe Duffy when said company disappears a few months down the line with my money and the director is answering questions from the Bahamas (like that's never happened before)

Peregrinus

People do "fall for this", as you put it. It's called crowdfunding, and it's pretty common. There are a number of websites which offer the service. Yes, obviously, it can happen that the goods never arrive, or they do arrive but are not of the quality that you expect, and customers who buy this way need to have their eyes open. On the other hand, it can work perfectly well. This is how the development and launch of the Oculus Rift VR headset was funded, for example. In fact Wikipedia has whole categories of kickstarter-funded products, kickstarter-funded publications, kickstarter-funded films, and so on.

Like any other marketing mechanism, it's better suited to some products than to others. In particular, you need to ask hard questions about whether your target market for the product are the kind of people who would be receptive to an internet-driving funding and distribution channel, and whether the product itself is something that people would be willing to pre-purchase.

fritzelly

Doesn't sound like the OP is talking about using the likes of Kickstarter and from the sounds of it seems to be very niche products

Peregrinus

Using kickstarter or not, he's essentially proposing to do what other people do by using kickstarter. The first question should be "is this product suitable for crowdfunding?" Only if the answer to that question is "yes" to we need to go on and ask whether kickstarter is the optimal vehicle for a crowdfunding campaign for this product.

Axwell

Kickstarter is not the same thing...completely different in fact.

The OP wants to take your money straight away...this is not the same thing as kickstarter (or any other of the major crowdfunding websites) where money is only taken when the pledged amount reaches the backing goal.

CelticRambler

Very common concept on the trad music scene in France - you pay in to a live event and one or more of the support acts will have a leaflet inviting you to buy their as-yet unrecorded first CD, often with a waiting period of 6-9 months. The difference in this case is that at least you can "try before you buy" just by being there to hear the band play (not that that's any guarantee you'll like the 15 tracks that end up on the disc).

So it all depends on product and the customers' expectations.