This transcript was generated from the episode audio and may contain minor errors.
[Music]
How can you sell a product that doesn't actually exist yet? Love this question. Welcome to Cytosale School. My name's Chris Guillebeau. In this episode, we're gonna help an engineer navigate the world of pre-sales.
You've got an idea, but you need to build a project, build a product, let's say, and you want to attract pre-orders, pre-sales, pre-commitments. Perhaps you need some funding to actually make the product. Or even if you don't need money, it's a lot nicer to know that there is an existing market waiting to purchase your product, which pre-sales can help with that. So in this case, our listener is in the prototype stage. He wants to test demand through these pre-sales, but he's worried about any potential pitfalls.
What about expectations? What about refunds? If the demand doesn't pan out. So let's consider how he can approach this with confidence. I love hearing different questions from our listeners.
Thank you for being out there. The detailed version from Mark and my answer coming right up. [Music]
Hey, I'm Mark. I'm an engineer and for the past few months, I've been working on a modular coffee brewing kit for home enthusiasts. Now it's still in the prototype stage, but I want to test demand before going all in on production.
I'm considering pre-selling it to gauge interest, but I'm nervous about how to present something that doesn't fully exist yet. And what happens if it doesn't sell as well as I hope? Will people lose trust in me if I have to refund their money? In short, how do I go about this the right way? [Music]
All right, Mark, sounds exciting.
I would love to put in my own pre-order for this coffee brewing kit. And pre-selling can be a great way to gauge interest and secure funding, but it's crucial to approach it strategically. Otherwise it doesn't work. Like you really need to put some thought and intention into it, especially for a product like this. So how do you do it right?
Give you a couple of steps here. Number one, be transparent about the product's status. Customers are more likely to trust you if you are upfront about where the product stands. Like, is this just an idea? Is it a CAD drawing?
Or have you actually done some pre-production? You know, well, I think here Mark says it's in the prototype stage, but that can mean a lot of things. So just be really clear about what that stage looks like. Include a realistic timeline for delivery. Use any visuals you can, like those 3D renderings, sketches, photos of the prototype.
Even rough visuals can make the concept feel more tangible. Number two, offer incentives for early support. So you want to encourage pre-orders by giving early adopters extra value. You might want to have an early bird price for those who commit early. You might want to include some perks.
Could be a free accessory. Could be something else. I don't know exactly what it is for this product, but the point is if you're thinking about pre-selling, you want to reward those who take action early. It just kind of shows that you appreciate people's trust and you're willing to reward it. And then as part of this, you want to use a platform that supports pre-sales.
So there are lots of ways to do this too. Kickstarter and Indiegogo, those are the first things people tend to think of and they are excellent for crowdfunding the right kind of product or service. But if you prefer a simpler setup, that's okay too. Platforms like Gumroad or Shopify, which we've had a lot of listeners have a lot of success with, they also support pre-orders. They usually have some kind of pre-order app or process to take payments while clearly stating the expected delivery date.
Now that's how you do it, but what do you prepare for? Like how do you prepare for the what if scenario? And I think this is actually an important part of thinking through the process. It's important to have a plan in case demand falls short. And so if you don't meet your sales goal, be ready to refund customers promptly and just communicate honestly.
Hey, like we didn't hit it. We didn't hit our production target. So we'll be refunding all pre-orders. In a way that actually helps you generate trust as well. People are disappointed, but they get their money back.
Now to reduce this risk, you wanna set a realistic minimum funding goal upfront. Like what is it actually gonna cost you to produce this product? What does success look like? And if you have a baseline number, like you can always exceed it, right? We wanted to have $10,000, but we got 100,000.
That's great, okay. But what does the baseline success look like? And so I think those things will help you. They're gonna help you like when you get in the middle of something and the process can kind of seem out of your control. If you've set this up properly, it'll be much easier going forward.
Wishing you every success with that. Listener's always wishing you success as well. And we'll get through things together if they're tough. Let me know what's going on with you and how we can be helpful. I'm so excited to be rolling into this new year.
This was episode 2,961. Much more is coming up, of course. The podcast is always completely free. My name is Chris Guillebeau. You're listening to Side Hustle School.
[Music]
From the Onward Project.
