Picture this: your best-selling product is currently out of stock. Your new product is several weeks away from being released. Customers are thinking of moving on to your competitor. You need immediate cash flow to replenish some inventory. How do you sort all this mess out?

Answer: Sell preorders. 

Preorders allow you to draw customers by letting them reserve a product coming soon (not currently in stock) or getting manufactured. They’re a great way to keep customers around and can also help you improve your cash flow. Plus, you can also determine how much sales you can expect for a new product based on preorders.

This post will give you more insight into how preorders work and what makes them a good fit for your online store, so you can stop worrying and start selling. 

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What is a preorder? 

A preorder is an order placed for a product that is not currently in stock or hasn’t been released. It’s shipped to the customer once manufactured or sourced. Preorders allow customers to order items before they are available.

In both the offline and online worlds, preorders serve as a kind of reservation that guarantees shoppers access to a product at its earliest possible availability. Whether you accept them for soon-to-be-launched or out-of-stock items, preorders help you build customer loyalty, forecast demand better, and improve cash flow.

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Why use preorders for your business?

preorder for Shopify stores

Preorder selling can provide some big advantages that not only improve your bottom line, but your customer loyalty and your operations as well. 

Generate excitement and drive repurchases

Preorders can help you build anticipation and excitement for a product before it hits your digital shelves. Preorder marketing campaigns use many of the same tactics as standard promotional campaigns, including: 

  • Offering incentives. Early access, free customization, and limited-time discounts are great ways to generate buzz while boosting preorder sales. 
  • Creating product imagery. Retailers can utilize factory samples and even professional mockup services to develop product images.
  • Promoting on different platforms. From social media channels to online forums related to your industry, be sure to use different marketing channels to spread the word about your preorder. 

Besides generating excitement, you can also use preorders to boost the odds of repeat purchases. For example, you can offer exclusive preorder access to customers on your mailing list or through a loyalty program. This shows customers that you appreciate their business and want them to have a memorable customer experience. 

Forecast demand by meeting it

Unsure whether your new product will have enough demand to make sense for your business? Preorders provide data about concrete demand that helps turn uncertainty into insights.

It’s no secret that retailers do whatever they can to determine the demand for each product they sell. Whether you’ve invested in the design and production of your products or simply purchased inventory, preorders will give you an idea of what people prefer in terms of color, sizes, and other specifics. This allows you to fine-tune products before your manufacturing run ends. 

Additionally, you can use preorders to reduce the risk of storing idle inventory and managing uncertain supply chains. This selling method allows you to effectively forecast the minimum quantities required to meet existing customer demand and ship within a reasonable timeframe.

Gain a competitive edge

People have more options when shopping online than ever before. And with ecommerce, they can access all kinds of products with a single tap, from custom jewelry products to high-end luxury electronics and more. 

For ecommerce merchants, this means competition is going to be fierce. If your item is out-of-stock or unavailable when customers want it, they’ll simply buy from another retailer.

Preorders give you an edge, allowing you to make sales whether the goods are ready to ship or not. You never have to say no to a customer because preorders let you sell whenever they’re ready to purchase.

Preorder methods

preorder methods: pay now and pay later

Pay now

Pay now is a type of preorder where the customer needs to pay the full sales price of the product upfront. It’s almost like a standard sale, where the company collects payment at the time of the order. However, preorders give you an extended fulfillment timeframe—which typically isn’t granted with normal orders. 

Pay now preorders are ideal for businesses that want to:

  • Capture customers in the zone. Want to capitalize on impulse buying but limited stock is holding you back? Pay now lets you make the sale without requiring you to fulfill the order immediately.    
  • Get paid upfront. If you need cash on hand to run your business, pay now helps preserve accessible funds for various operations.
  • Automatically update out-of-stock items. Many preorder apps can automatically accept preorders whenever an item goes out of stock. Make sure to enable this option in your app to prevent customers from moving on to another seller.
  • Keep customers informed. Pay now preorder pages can be customized to include additional messaging, such as expected shipping dates. 

With preorders, customers also receive information about the date and time of product shipment. 

Pay later

Pay later is another type of preorder that lets customers “reserve” a product for a small—or no—deposit. With this method, customers are billed for the remaining or full sales price once the merchant ships the item.

Pay later preorders are suitable for businesses that want to:

  • Gauge interest in a new product. Pay later preorders let you estimate the potential demand for a new item so you can produce the right amount.
  • Charge customers at fulfillment. Looking for some flexibility with your cash flow? With pay later, you can bill customers before or after you pay your vendors.
  • Secure orders for upcoming products whose shipment is delayed. Pay later gives you the chance to capture orders while informing customers that an item will ship later than intended. 

How to set up preorders on Shopify 

Shopify has numerous preorder apps that let you sell products before they are available. You just need to install one that suits you best, and you’ll be able to accept preorders via your online store. Here are some of the apps we recommend:

  • Pre-Order Manager: Pre-Order Manager lets you schedule your preorders for when inventory runs out or at a specific start/end date. You also get various customization options for the preorder button design and messaging.
  • PreProduct: PreProduct is ideal for validating and gauging demand for new products. You can list specific variants, accept multiple quantity preorders, and do much more with this app.
  • PreOrder Me: PreOrder Me lets you add a preorder button to your product page. You can customize preorders for each product variant and change the quota based on stock availability. 

Authorizing preorder payments

On Shopify, you can use manual payment authorization to gather order information and process payments later. Once you have the preordered item on hand, you can proceed to charge the client and ship the order. Here’s how to authorize preorder payments:

  1. Log in to your Shopify administrator dashboard.
  2. Choose Settings from the bottom left corner.
  3. Select Payments. 
  4. Click the Manage button in the Payment Capture tab on the right and choose “Manually capture payments for orders.”

preorder manual payment capture

It’s worth mentioning that Shopify’s gateway allows for an authorization period of only seven days. So it might not be suitable for your store if you can’t ship within the one-week period. The way around this is to use a third-party payment gateway. 

Start selling preorders today

Preorders have long been used as a sales tactic across various industries. With preorders, you can increase revenue and foster customer relationships by turning a potential sale into a purchase.

Plus, preorders allow you to deliver an unforgettable experience by letting customers enjoy the thrill of anticipating a new product. You can even send out little announcements about what’s coming—tiny snippets that keep customers excited and curious. 

Preorder FAQ

Can I sell preorders before I have manufactured my products? 

No, you should already have completed the manufacturing process before offering them as a preorder. 

Can I still offer a preorder if I’m unsure when my product will ship? 

You must be able to provide a reasonable timeframe for shipping your item. If you do not list a date, your product must ship within 30 days of receiving its preorder.

Can I change my shipping date?

Yes, you can provide a revised shipping date if you cannot ship the preorder within the stated time. If you do this, make sure to explain the customer’s rights to cancel or request a refund.

Can I sell preorders for in stock items?

Yes, but it’s better to offer preorders for out-of-stock products. For items currently available, you can use tactics like buy now, pay later to increase sales.

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