When you’re a brand builder who sells physical products, one of the hardest things to do is raise enough capital. This is because selling physical goods carries a huge upfront cost due to the labor, equipment, setup, materials, storage and shipping required to manufacture things.
So in this instance, it does take money to make money. But what if you have NO money?
As I’m in the midst of launching a new product for my brand (‘Fro La La’ Christmas Sweatshirts by TheDynaSmiles) I thought it’d be beneficial to share with you how I’m doing it without spending any money of my own.
.How To PRE-ORDER Your Way Through Your Next Product Launch:
- Know Your Costs
How much will it cost you to order the minimum amount required by your manufacturer? Is the manufacturer you’re using offering you the best deal? Did you determine the shipping charges and any setup fees? Do your research to determine your manufacturing expenses..
- Determine Your [Product] Pricing
At what price will you need to sell your item to break even? At what price will you need to sell your item to make a profit? Will your target audience be willing to purchase your item at your selling price? If selling online, can your profit margin successfully absorb your shipping costs? Set a price that lets you make your money back and then some..
- Set A Time Limit
Once you’ve determined the numbers, you’ll then need to set a time limit to force your audience to buy. I recommend a 1 to 2 week window for taking pre-orders. Anything longer will not have the sense of urgency you’ll need to convince your audience to take action. Setting a time limit will force your buying audience to take action immediately...
- Offer An Incentive To Buy
In addition to setting a time limit, you’ll also want to offer your audience an incentive to buy your item now even though the wait for them may be longer. An incentive could be a discount, free shipping, limited edition signed copies, a complimentary add-on, etc. Reward your audience with incentives that will hold them over as they wait for their items to arrive.
- Advertise For Free Using Social Media
This is where having an engaged audience helps to get the ball rolling with your product launch. With a strong social media presence, you can gauge your audience to determine if you have a winner on your hands. If they like what you have to offer, they will buy whether the item is ready or not and as long as your offer comes with a good incentive. Use FREE social media sites like Instagram, Facebook, Periscope, etc., to gain your initial sales. I still get the most traction for my brand through Instagram. Here’s a helpful guide if you’re stuck on how to use that platform in your social media marketing strategy:
- Use Your Profits to Invest In PAID Advertising
With sales coming through, you can now take a percentage of your profits to invest in actual marketing campaigns to boost your sales even more. Take the money you’ve received from pre-orders to first cover your manufacturing costs, and then pay for advertising if you’ve already identified a lucrative advertising channel. Profits from Pre-Orders can be used to boost your marketing in order to gain even more sales.
And there you have 6 simple ways to pre-order your way through your next product launch without ever spending any of your own money!
These same strategies are used in popular crowd funding sites like KickStarter and IndieGoGo so there’s really no excuse to launching your next product. Do your research and then get to work!
*Keep in mind these steps assume you already have a functioning website or a way to accept pre-order sales.
Here’s a snapshot of some of the sales that came in on 10/21/2016 for my Fro La La Christmas Sweatshirt Pre-Order Sale:
Considering only this snapshot, I received $425.50 in pre-order sales. Roughly half of that amount will go towards covering my manufacturing & shipping costs, leaving me with around $200 to use towards more advertising OR to keep as a profit.
As long as your costs are covered, pre-ordering your way through is a very viable option to launching your next product.
Written by Daveia Odoi.