How does Pre-Selling a Product Work? Tips for Preselling Successfully

Last updated on August 12th, 2022

By Iskouhie Poladian

The practice of pre-selling a product is constantly growing. From pre-ordering books before they are published to buying tickets to a concert in 6 months. It is so common now that, in many cases, people do not even think about the fact that they are paying for a product before actually acquiring it. 

Below we will describe in depth what pre-selling is and how it works, as well as its numerous advantages.

Furthermore, we will provide you with 3 options to organize your pre-sale with their individual breakdowns. In the ending sections, you can find further tips to ensure your products’ success. All you need besides following this article is the courage and creativity to be an entrepreneur.

What is product pre-selling or pre-sale?

Pre-selling is all about selling a product or service before it’s released. Simply put, you sell goods that don’t even exist yet. Pre-selling is a great way to trigger and measure your potential customer's interest in your product, see their first reaction and collect feedback before making your product available in the market. It can also be used for funding your early business operations and predicting upcoming sales.

Pre-sales can be a valuable tool for testing new business ideas and concepts with minimal risks. It’ll save you time and money, as you won’t need to invest a lot before pre-selling. Here good organization and a well-conducted marketing campaign are what matter the most.

The goal is to share your vision with your target audience to see if there’s enough demand and determine if all the effort will be worth it. 

Pre-selling your product gives you the opportunity to point out the weak spots concerning the product or the marketing decisions, make some improvements, and better position your product in the market. 

Reasons behind the decision to pre-sell

The decision to do pre-selling before your product actually goes live should be based on the characteristics of your business activity, your goals, and your objectives. It should be a considerate choice with a well-defined plan. 

Thus, the very first thing before tracing your pre-sale strategy should be to decide what you want to achieve in the end. Are you pre-selling to raise funds and get a budget, getting reviews from potential customers, better knowing the market competition, or just providing an opportunity for extra supportive and interested customers to get it before launch? 

In most cases, you can sell lower than intended during pre-selling, but inform your customers that it is a limited offer. Give them the opportunity to try the product and maybe collect feedback. 

Another option is to make it pricier than intended and give your customers premium access. The motives for doing a pre-sale are numerous, and defining the results that you aim for is what you need to create a successful campaign.

So what are the most common reasons to do pre-selling? 

reasons to do pre-selling

  1. Testing the idea

Rushing into launching the product without careful consideration can lead to critical losses, sometimes even irrevocable. Thus, testing your business idea helps you to measure its viability.

Your business is doomed if you launch a product that is undesirable to your audience or doesn't solve a problem they are facing. Not talking about the cases when your idea can’t be commercialized or there’s no market demand for it. 

No matter how perfect your idea may sound in your head, understanding if you’ll be able to sell it eventually and make money is not a guessing game.

A lot of factors should be considered, and various questions should find their answers before you take the risk to enter the market with your product.

  • If your product is not something new, why should your target turn into you? 
  • What’s the value you’re proposing that’s different from the one your competitors have? 
  • Does your offer have higher quality, or is it cheaper? 
  • If it’s something innovative, are you sure people are willing to pay money to buy it? 
  • Do people need your product? 
  • Last but not least, is the market ready for your innovation? 

The questions are endless, and you’ll need to test your brilliant idea to make an incredible product in the end. 

While market research provides critical information about the business landscape, pre-selling the product in some cases, can become a game-changer.

Testing the idea in limited quantities or even without it might make you realize that it actually has no place in the market and save you a lot of effort.  

  1. Trying to find the target market and/or positioning

While the same idea may sound totally useless for one customer segment, others might find it highly exceptional. Those are the clients you’re going to fight for. You can’t meet everybody's needs. You just have to find the right audience who has an intense desire for the product you’re proposing. And after targeting your potential clients, effective positioning is what will guarantee your sales. 

In the 1980s, Colgate, already a leading name in toothpaste and dental hygiene, had a bright idea for introducing a line of frozen meals. The company thought that the clients were satisfied buying their toothpaste, so they’ll also trust their frozen foods, like lasagna.

Apparently, that was not the case. The line failed miserably. Not that Colgate couldn’t make tasty lasagna, customers just couldn’t get past the association of the Colgate name with a minty toothpaste.

Thus, already being positioned as a dental hygiene brand, Colgate couldn’t convert the name recognition into something totally different. Maybe pre-selling those lasagnas first would’ve made the company understand that they can’t sell whatever they can make, at least not under the same name. Who knows? But surely, those lasagnas wouldn’t have ended up in the Museum of Failure.

  1. Trying to define the best pricing. 

As we mentioned numerous times, pre-selling is a tool and a pretty useful and diverse one at that. It is crucial for the entrepreneur to ascertain the strategy of how exactly he wants to use this tool. Product pricing is pretty much the way you communicate with your customers about the sales strategy.

The main pricing strategies are economy pricing, penetration pricing, skimming pricing, and premium pricing, and there is dynamic pricing when you change your strategy depending on the market. 

Choosing the right strategy for your product should be based on your business goals. Most entrepreneurs go with “The cheaper, the better” strategy, and it's not often the most optimal strategy. 

While it is very intuitive because price, first of all, portrays affordability and lower price means better affordability, it can be very tricky, especially for startups. Because price also portrays value, and for customers, cheaply priced is very closely associated with poorly made. Nonetheless, you don’t want to enter the market with a hefty price and discover that no one is willing to pay that much for your product. 

Priced at $1,500, Google Glass never took off. Neither the most hardcore tech fans nor people spending hell a lot of money on luxury items were willing to shell out that much money for a gadget.

Eventually, the Glass never found its place in the market. In this case, even pre-selling didn’t ensure the success of the product, as prior to the public release of the Glass, Google sold the prototype for a limited time. The price was just too high, and not changing it after the pre-sale just proved that the Glass was not meant for mass consumption. 

Depending on how your pre-selling campaign went, the pricing of the product may change. Again, being open to customer feedback and reviews can make pre-selling so much more efficient. 

  1. Raising funds to start production

Funding is crucial for any startup. Pre-selling is a very unique and trending solution to this problem. While it sounds pretty straightforward, there are some things that any entrepreneur wanting to raise funding should be aware of.

First of all, if your startup idea is reliant on the funds you raise during pre-selling, always make sure to build a pre-sales plan. Make sure to make it realistic and split it into smaller time intervals. Don't make only one indication marker, and don’t make it pointlessly easy to achieve. Make it rational and make it matter at the same time. 

Furthermore, make sure to always be aware of your funds raised at a given moment. If you are working in a  team, make sure to keep them up to date as well. This will help you understand whether you are ahead or behind your schedule and adapt accordingly. 

While pre-selling funds help new entrepreneurs tremendously, it is not free of risks. Being able to detect these risks and adapt as soon as possible is crucial for your product's further success. Even if failure is inevitable, cutting your losses can also be a huge deal.

Always make sure not to put too much money back into your product development but instead pay off your business expenses. Balancing your expenses according to the funds during pre-selling is the next best thing after being aware of your schedule.

Having a good marketing plan, a sales expert, and good communication with your customers will also benefit you greatly in your pre-selling journey to raise funds.

How to organize the pre-sale 

There are no good or bad ways of organizing the pre-selling of your product. Your decision should be based on your pre-sales strategy and the goals you’re aiming to achieve.

We have already discussed how important it is to have a well-thought pre-sales plan and the reasons for what you may want to pre-sell your product before proposing it to the masses. So now we’re going to explore three different options you can utilize to pre-sell your product. 

1. Build your own landing page 

In this day and age, the online presence of the business, regardless of industry, has a huge impact on its success.

First off, having a website for your business increases your company’s credibility. More and more customers check the website before making a purchase. 

Furthermore, through your website, you can showcase your brand to your prospective customers and clearly establish who you are, what you represent, and what you stand for. It also gives comfort to your clients that you are a real business and gives an opportunity to make a good first impression. 

Your website is what you’re going to use to post updates and communicate with your clients. Thus, sooner or later, you’re going to need to build a website for your brand, even if you’re not selling your products online.

And when it comes to pre-selling a product, it can be a great tool as well. You may create hype before your product makes its big premiere by enabling interested customers to find out more, browse the range, and do pre-ordering. 

It is just as important to create a way to drive pre-sale traffic as it is to decide what you are going to share with your potential clients. You’d have to spend some time creating a pre-sell page, which will be informative, will attract your target's attention, and will trigger their interest.

A brief and relatable headline and subhead are the first steps. Don’t forget to identify and address your prospects, mention their pain points, and the solutions you’re going to provide. It’s also important to provide a product overview and include some visuals, even if the product is not ready yet.

Moreover, you’ll need to set up a payment method. And last but not least, communication is what really matters, so provide as much relevant information as possible. 

After all, your goal is to establish and measure the demand, pre-sell your product, and prepare the market for its launch.  Don’t be afraid to be creative. Being unique and different will surely have its perks. 

Advantages of creating your own landing page 

The biggest advantage of creating your own pre-selling page instead of running your campaign on other platforms is that you’re going to pay basically no platform fees.

So you might want to save some money here and use it elsewhere. Moreover, you’re free to organize your campaign and design your pre-selling page the way you want. 

Disadvantages of creating your own landing page 

While doing all by yourself grants you freedom, it also comes with some challenges. Organizing the whole campaign is not as easy as it may sound. And failing in crafting a representative and attractive pre-sale landing page might affect your overall success.

What’s more, it takes time and dedicated work to create internal traffic. It may be easier for already existing companies, who have their own websites, to drive traffic to their pre-sell page, but for start-ups, it can even become a challenge.

Check this example of a well-built pre-sell page.

2. Crowdfunding on platforms like Kickstarter

Another option for pre-selling products is organizing crowdfunding on dedicated websites. While there are several crowdfunding websites, Kickstarter is the most well-known. Users claim that it’s a great platform for people to discover your brand, especially if you are on a tight budget.

It’s aimed at helping creators develop and produce their innovative ideas. The whole platform is entirely based on creators and backers. Creators introduce their project ideas and get funding from backers. 

First off, the creators set up a page to present their project using videos, photos, and providing detailed information. They also set a fundraising goal and choose the campaign end date. 

The important thing about Kickstarter is that the creators can collect their funds only if the funding goal is achieved by the deadline. If they don’t reach the goal by that time, the backers' bank cards are not being debited.

And upon successful completion of a project, Kickstarter retains a 5% fee of the money raised. So Kickstarter projects function on the “all or nothing” principle, which is a thoughtful way to minimize risks and gain the backers' trust.

Moreover, not all the submitted projects are being approved by Kickstarter. Almost 25% of the submitted projects get turned away due to non-compliance with the Kickstarter project guidelines. 

It also needs to be mentioned that the creators have to offer reward levels for backers who pledge specific amounts.  The more the backers contribute, the bigger the award they can choose. 

Overall, starting crowdfunding on Kickstarter is a great option for those who already have a working prototype of their creative ideas and are ready to pay the platform fees. 

Advantages of crowdfunding on Kickstarter

The biggest advantage of Kickstarter is that it’s already popular and trusted by many. Getting your project on their platform means a good start. As the users know that Kickstarter projects are very well chosen and thoughtfully selected, they are more likely to believe in your idea. 

Moreover, the platform has huge internal traffic, so you’re not going to stress over reaching your potential clients. Thus you can mainly concentrate on creating a representative and high-quality page for your project. 

What’s more, looking for investments can last for weeks or even months. It’s way faster to get money from running a campaign on Kickstarter when you don’t have much time. And you don’t even hand your business to your investors. So you still retain total control of your business while raising enough money to run it. 

Furthermore, after successfully running your campaign on Kickstarter you also gain some credibility. It can also become a selling point to future investors if needed in the future, as the demonstrated success on Kickstarter means that there are a lot of like-minded people who share the idea with the creator. 

Disadvantages of crowdfunding on Kickstarter

Surely Kickstarter is full of opportunities, but it all comes with a price. Creating an account is free, but if your project reaches its funding goal, Kickstarter collects a 5% fee, and their payment partners collect processing fees between 3% to 5%. 

Moreover, your project has to meet certain requirements in order to pass the selective process of the platform. So you might face certain limitations. 

Furthermore, you can’t test your idea on Kickstarter without having a working prototype. This requirement may become an obstacle for the companies that need funding for making a prototype.

Nonetheless, the level of support you get by running a campaign on Kickstarter goes beyond the exchange of money and goods. The platform gives you the opportunity to build a dedicated customer base and a community before your pre-sale product launch. Knowing that there are people who support your idea and visions and truly wish you success is really encouraging. 

Check the Kickstarter campaign of the abovementioned example.

kickstarter.com

3. Launching on Prelaunch.com

Prelaunch.com is an online platform that will help you tremendously in setting up your product. It is a platform that will surely reduce the risk of failure and overall expenses.

Overall, you will be saving a ton of money yet accomplishing almost as much as you would have when investing resources in different other platforms and marketing campaigns. 

People can become supporters of your product and they get exclusive discounts when your product launches. But it is a very negligible price to pay in order to guarantee your product's success. Prelaunch.com also provides general tips as you develop your product and more often than not it can actually be helpful.

Prelaunch sign-up form

The advantages of using Prelaunch.com

Setting up a landing page on Prelaunch.com is really easy, does not require any programming or design skills to do, and is very convenient for use. Furthermore, you get a lot of statistical and analytical information regarding people's interest in your product.

And before investing a single dime into your project, you can validate your product idea using the 2 step validation method of Prelaunch.com, market validation, and price validation. 

Even more, you can test different features and prices, and Prelaunch.com’s analytical data will provide you with predictions and forecasts on how the changes will affect your product's success.

Besides, you get subscribers, who are people interested in your product, and you can get reservations, which basically are people who pre-bought your product. Customer feedbacks are also accessible.

In a sense, you get everything you need to set your pre-launch campaign on a single platform. Prelaunch.com also offers advertising services to involve more people to join your supporter army. 

The disadvantages of using Prelaunch.com

The major disadvantage of Prelaunch.com, in our opinion, is that it is not as popular as Kickstarter. It also has some fees if you want to showcase more products or have more supporters available. 

Surely, it is not as customizable as building your own landing page from scratch, either. But all in all, considering the variety, accessibility, convenience, and safety that Prelaunch.com provides, it surely is a very reliable option. 

Overall, despite the disadvantages listed above, Prelaunch.com helps you save a ton of time and money, which is the most important thing in a startup. Next up, it provides you with analytical and statistical data, as well as customer feedback.

Furthermore, it gives you the ability to test your potential by trying out different prices and providing appropriate forecasts regarding the outcome of the change. Each one of these is beneficial for a startup on its own, yet Prelaunch.com provides the full package. 

Sure, as of now, it's not the most popular platform and is not completely free of charge. But still, it has a multitude of options to increase the traffic on your landing page and improve your chances of success.

Besides, there are no totally free ways to build a reliable startup project and a stable community of supporters anyways. There are always hosting and other maintenance fees that you need to worry about before even starting to think about your page's traffic. To summarize, Prelaunch.com is about as safe as you can get with your pre-sale campaign.

Check the Prelaunch campaign of the abovementioned example.
prelaunch.com

Tips to successfully presell your product before the launch

Now, we want to provide further tips on achieving success by utilizing Prelaunch.com.

tips to pre-selling

1. Gauge market interest 

First of all, you might want to estimate your market interest by collecting subscribers on a landing page without yet mentioning the price.

This will provide you with some further insight into your product's market demand as well as maybe get some feedback. You can start collecting data, and any information is important when starting to develop a product.

2. Set up a reservation page 

Next up, you might want to set up a reservation page to collect monetary funds for a guaranteed 30%+ discount on the product after launch. This is an important step so you can differentiate your supporters in terms of commitment. 

Better yet, Prelaunch.com will provide you with an evaluation of your product's market demand by analyzing conversion metrics and comparing them with the industry average.

Besides, reservation is totally risk-free and supporters are guaranteed a refund, so you don’t have to worry about people not wanting to invest funds into your products in regard to losing their money to a high-risk project. Always be creative.

3. Send a survey to your subscribers 

Thirdly, sending a survey to your subscribers would be a good idea. It will help you learn more about them for better targeting and optimization of advertising. As we’ve mentioned many times already, having a stable community of supporters and potential buyers is crucial for your product's success.

Being interactive with them, and always showing concern towards their demands and suggestions or criticism will almost always lead to the success of your project. Transparency always builds trust, which leads to commitment. And don't even stop there; further commit to creating this bond. 

4. Connect with the subscribers who haven’t reserved a discount 

Send a separate survey to those subscribers who haven't reserved a discount for learning more about what they were missing and how you can improve your pricing strategy. Don’t forget they are your potential customers, they are people who are, in a sense, interested in your success in their own subjective way.

Their opinion is an important resource for you. A resource to improve, or maybe understand that you are targeting the wrong audience. You shouldn’t always do as everyone says, but there will always be important notes for your consideration.

5. Focus on data and keep optimizing your results in a data-driven manner

All of the above will create data and information for you to analyze. Furthermore, Prelaunch.com gives the complete toolset for analyzing all the information you collect before your product's actual release. Besides, it also has statistics. 

You can always view how your product compares to others in the industry. Analyzing will lead you to understand if you are doing something wrong or find key points where you need to improve. And by utilizing Prelaunch.com, you can do this with minimal effort and knowledge.

Having thorough data with a convenient and easy-to-use analytics toolset is a dream come true for any entrepreneur.

6. Create a group

Finally, you can also create a group where your subscribers can join and engage in a meaningful discussion and stay excited about your upcoming launch. You can also use that group to communicate with your subscribers directly. 

We understand that it has been a very repeating trend, but we cannot stress enough how important It is to always keep in touch with your community and keep looking for ways to increase your products' traffic. Kickstarter or Prelaunch.com can provide you with only so much.

Conclusion 

We sincerely hope that this article was helpful for you both in understanding the advantages of pre-selling as well as how to do it efficiently. While the tips provided in this article and any other guides will surely help you, your determination and commitment are things that no one and nothing can provide.

Do not give up, always strive for success and always remember that mistakes you make today are opportunities for tomorrow's success.

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