Pre-Order

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A Pre-Order lets customers buy a product before it is officially released or available for sale.

This allows customers to reserve their desired items before they are available to the general public.1

Visual Representation

pre-order and pre-sell visual representation

Purpose

The primary purpose of offering pre-orders is to:

  • Gauge Demand: Helps businesses understand the potential demand for a product.
  • Secure Sales: Ensures initial sales revenue before the product is launched.
  • Plan Inventory: Allows companies to better plan production and manage inventory levels.2

How It Works

  1. Product is announced: The company announces the product and its availability for pre-order.
  2. Ordering begins: Customers place orders through the company’s website or retail partners.
  3. Payment made: Depending on the company’s policy, customers may pay the total amount upfront, make a deposit, or provide payment details to be charged upon product release.
  4. Confirmation: Customers receive a confirmation of their order.
  5. Shipping starts: Once the product is released, pre-orders are fulfilled and shipped to customers, often before the product is available to the general public.3

Benefits for Customers

  • Early Access: Customers often receive the product as soon as it becomes available, sometimes even earlier than the general release.
  • Exclusive Offers: Pre-orders may include special incentives such as discounts, exclusive content, or limited edition items.
  • Guaranteed Purchase: Ensures the customer secures the product, especially if it is expected to be in high demand and may sell out quickly.4

Examples

  • Tech Gadgets: New smartphones, gaming consoles, and other tech devices are often available for pre-order before their official release.
  • Books: Upcoming book releases frequently offer pre-order options, sometimes with signed copies or special editions.
  • Games: Video games often have pre-order bonuses like exclusive in-game items or early access.

Related Terms

References:

1. Wikimedia Foundation. (2023b, November 1). Pre-order. Wikipedia. https://en.wikipedia.org/wiki/Pre-order

2. Pang, Z., Xiao, W., & Zhao, X. (2021). Preorder price guarantee in e-commerce. Manufacturing & Service Operations Management, 23(1), 123-138.  https://pubsonline.informs.org/doi/abs/10.1287/msom.2019.0819

3. Pham, A. (2023, August 25). How does pre ordering work in your online store?. Woostify. https://woostify.com/how-does-pre-ordering-work/

4. Staff, S. (2022, November 22). Pre-orders add to your bottom line-how do they work? (2023). https://www.shopify.com/blog/shopify-pre-orders

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