Buy Now, Ship Later. Are Pre-Orders a Scam or Smart Business?

pre·or·der
priˈôrdər/
verb
  1. order (an item of merchandise) before it is available, with the understanding that it will be shipped later.
noun
  1. an order for an item that has not yet been made commercially available.

 

It seems like a good chunk of the kit I post is available only by pre-order. It can feel like a sales tactic to create the presumption of ‘limited edition’, giving you that BUY NOW rush to your mobile or computer. But for small start-ups or creative cyclists with a knack for graphic design, it can be the easiest way to share great kit design without breaking their personal bank. I ask several players of the pre-order game to explain how and why it works.

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Prism.Bike is a one-man operation on a mission to make dynamic kit that expresses personality. Kit is available through pre-order only, creating an exclusive feel to those that purchase before the window closes. Often that window is only 24 hours before selling out. Oliver of Prism.Bike shared his view on using pre-ordering:

A pre-order usually means I am paying upfront for a kit that I am attracted to but really unsure about how it fits and unable to see it on other cyclists similar to myself because it’s not an available product. How do you address this concern for consumers?

I think this is tough for buying any clothing on the interwebs. Especially anything lycra.  I took the approach of just paying a great photographer (@beardmcbeardy), to take some photos of people wearing the prototype of the kits.  I got tired of seeing people standing in front of a wall wearing a kit [in ads] and wanted to know what kits look like on the bike when you are sweating bullets after having a bit of a crack.  So for the photos we got the models to smash it up a hill for 15 minutes then took some snaps.

Also, my designs are pretty unique, so people either immediately love them or they don’t. If people love them and know there isn’t anything similar, they are pretty cool to take a punt.  If anyone emails me or has questions about quality I put them in touch with other customers on social media.  I am really passionate that the stuff I make has to be comfortable on long rides and really good quality… otherwise, what is the point?

 

What is the main reason you use pre-ordering as a business model?

Like many people, I pretend I am the boss at my house. Especially if my wife isn’t around.  This is far from the truth.  The last bike I bought I had shipped in about 50 pieces and then slowly assembled in an attempt to pretend it had always been in the garage.  So, you can imagine when I floated the idea of making kits to her how it might have gone over.  I had ideas for designs that I was excited about, and I thought others would be excited, too.  Even my wife was excited for them!  But she just wouldn’t let me front the cash.  She prefers to spend money on, you know, boring stuff like food and school fees… she doesn’t understand that cycling is a sport built around sweating bullets, coffee and conspicuous spending.

What are the cons to pre-ordering – for yourself or for your customers?

For myself, the con is really that I like instant gratification [and a pre-order takes time]. I don’t get to hear what people think right away because they get their kit after production delay.  I put a shitload of effort into getting the design and quality right and I love the response I get when people get their kits and love it.  With pre-orders there is a delay.

For customers, I think the wait is painful … but it makes the day they get it all the sweeter. I think getting the sizing bang on is a pain for about 5% of people.  But again, very rarely a massive issue.  Anyone that has bought off me knows I go to great lengths to get stuff right for them.

I actually won’t be doing pre-orders anymore. For my next releases I will be holding stock.  I wanted to do it, as I have been blown away by how great the people who have bought from me have been and wanted to do what I can to make the experience better for them.

If a kit is a cut-n-sew clothing item with details and design (unlike, say, a t-shirt) why do you still continue with a pre-order?

I had a few reasons. These included:

  • My margins were very low
  • I wanted it to be limited so if I only make 50, I have to make sure sizing is correct for those 50
  • Purse strings
  • It didn’t really start as a business. People shared a picture of Laser Knights and it all went a bit mental. It just snowballed from there.
  • I have 4 kids that require food to continue growing
  • It seemed like a way that I could pay WAY more for quality as a new brand, knowing that I had already sold that much. QUALITY was a big thing. My mates ride heaps, like 700kms a week or more and they would only buy my stuff if it was good to wear. Quality stuff is NOT cheap. If I had to pre-order and buy lesser quality kit to give myself a financial buffer, I wouldn’t be proud of it.
  • This was the only way I could figure out how to make something great.

Given I have sold out pretty quickly for everything, I have invested a lot now to make my own stuff and make it really high quality. I think without testing the demand for my designs I just couldn’t have justified the spend to do this…. Especially considering this just kind of evolved out of Laser Knights being popular.

If I pre-order from you, is there a guarantee that you won’t have it in a webshop for sale later?

Yes. I limit my numbers of all kits I sell.  More because I want it to be cool.  It is really hard for me to get excited about seeing 500 people in my kit.  I want them to be limited and special.  The business started off with me making a few kits for mates, so I still give them the chance to buy some, then I release 50 to the public.  About 60% of these usually sell overseas.  I have sold to China, USA, UK, Ireland, Holland, Hong Kong, Italy, Germany, Canada, Argentina…  So the likelihood of seeing people in the same kit is pretty low.

It’s easy for a fully stocker webshop to accept returns and fulfill exchange requests. If a pre-order kit doesn’t fit, what can a customer do?

I work with people to try and get the sizing right. Speak to them, email them if they have questions and probably about of my 3 releases have had about 3 customers with issues, of them I have had 1 return.  So the return rate is less than 1%.  In this case, I refunded the customer, paid for shipping (they were in Canada), so they weren’t out of pocket for dealing with me.  It was a bummer as they missed out on that design, but I will work something out with them if they liked another design down the track.  They were great about it, and could see I wasn’t trying to be a jerk.

How long after payment can I expect my pre-order to arrive?

Before it was about 4-6 weeks.  Now, as I will be holding stock probably a couple of days in Australia and overseas a couple of weeks depending on customs and postal services.  I think postal services in some countries seem to still use horse and cart or something.  Seriously Fire up and get stuff delivered.  Hahah.. I am just impatient… 2 weeks for overseas.

CLYM Apparel is Melbourne, Australia based brand focused on quality kit with a reasonable price tag. They don’t compromise on design and style, though. They really make kit they want to wear, but try to offer it worldwide for other cyclists just like themselves.

A pre-order usually means I am paying upfront for a kit that I am attracted to but really unsure about how it fits and unable to see it on other cyclists similar to myself because it’s not an available product. How do you address this concern for consumers?

At CLYM we’re happy to help by providing advice on sizing and fit. We encourage everyone who’s considering one of our garments to get in touch to ask about the fit and size. We’re online kit shoppers too and we know how difficult size charts can be sometimes!

What is the main reason you use pre-ordering as a business model?

We’ve moved to a pre-order model for our second season for a few reasons. The biggest two benefits are that pre-ordering enables CLYM to stock a much larger range and keep our designs fresh by releasing new seasons more often. These benefits come about as a result of not having to sink huge amounts of cash up front in buying stock, and then hoping that the size ratios are correct and customers will like every design. To hold a full range of stock across men’s and women’s lines requires major investment, so by operating pre-orders we can determine the exact quantities and sizes that our customers want and then start creating a new season faster, without having to wait to sell inventory.

What are the cons to pre-ordering – for yourself or for your customers?

The cons of pre-ordering are predominantly time-related. We understand customers would prefer to get their kit straight away! Also, it’s really important to order the right size as pre-ordering doesn’t enable exchanges, given there’s no stock on hand to replace your items.

And for us, it can mean many customers choose not to buy which results in lower sales. Which is all the more reason we need killer designs to make our range a compelling offer!

If a kit is a cut-n-sew clothing item with details and design (unlike, say, a t-shirt) why do you still continue with a pre-order?

We do extensive sampling and testing of the designs and garments before launching the pre-sale, and we can do these in small quantities. This enables us to have our brand ambassedors test and model the kit for the pre-sale, and we only have to order a small quantity at this stage. From there, we can tailor the bulk order to our customers’ demands by running a pre-sale prior to placing a bulk order with the manufacturer.

If I pre-order from you, is there a guarantee that you won’t have it in a webshop for sale later?

We want our garments to be available to customers all year round so we are looking in to the possibility of partnering up with other retailers as permanent stockists, both in store and online. However, our plan doesn’t involve selling via our own webshop outside of the pre-sale periods (apart from accessories which are available all year round).

It’s easy for a fully stocker webshop to accept returns and fulfill exchange requests. If a pre-order kit doesn’t fit, what can a customer do?

We encourage all of our customers to get in touch with us when ordering if they need help with sizing. However, with our kit it is hard to go too wrong as the materials we use are very “stretchable”. We’ve found that most people can fit in to several sizes. But to be sure, we recommend getting in touch.

How long after payment can I expect my pre-order to arrive?

We generally say to allow 10 weeks. Manufacturing is 6-8 weeks from the date of the pre-sale close, and then shipping time is approximately 2 weeks depending on your location. We express post all orders in Australia so those are a bit quicker. We keep all customers who have ordered up to date on the progress of their order by sending individual emails throughout the pre-order and manufacturing process.

 

 

 

 

 

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