It seems more and more brands are using the preorder tactic these days. I don’t think I need to even go into detail on the reasons behind it, but I will in case someone reading this is totally new to the game. Basically, the primary reason any brand takes preorders is to allow customers to cover the cost of new tees instead of paying for them with company funds. I’ve taken preorders a few times with Sugar Steak, but I can honestly say I have never done it because I didn’t have the available funds to make the tees. Rather I have used preorders as a way to gauge the popularity of a new design or to reward the really loyal customers with tees weeks before public releases, since I always ship preorders within a day or two of having the completed shirts in my hands. I personally think many up-n-coming brands are unknowingly hurting themselves by making common and costly mistakes with preorders. Why do I say that? Well, read on and you’ll see what I’m talking about. Hopefully I can save a few brand owners some headache.
USE PREORDERS TO FILL IN THE GAPS, NOT THE ENTIRE ACCOUNT
Obviously, preorders allow you to make shirts with someone else’s money, that’s a given. All of us indie brand owners know what it’s like to have a bitchin’ new idea for a tee, but your bank account is a little too low to let you put the new design into production. And let’s face it, that sucks. Prime time to preorder a few dozen of them and fill the wallet with the funds needed to create a decent size batch. I don’t disagree with this at all, what I do disagree with is relying on preorders to cover the entire batch. Like, you’re flat broke, and need to preorder tees in order to have money to even pay for poly-mailers to ship tees kind of broke. Why is this bad? Let me illustrate a scenario for you. You’re new to the game, no real funds available, so you put some tees up for preorder and sell maybe twelve altogether. So twelve tees at $20 a pop gives you about $240 and with your particular printer you need to order at least fifty tees to get a price break that makes decent profit possible. Say you can get tees made for $10 a piece if you hit the minimum order quantity. Which means you need at least $500 to get the first batch made, so even with your twelve preorders you’re still $260 short. You have two options, only order twelve tees since that’s what you’ve sold, or wait it out until you preorder fifty so you can hit the order minimum and get the price break. Chances are if you take the twelve tee route you will be paying for your screens and get no discount on tees, meaning you will probably pay like $16 a tee and make basically nothing for profit. Now say you choose to wait until you’ve sold fifty. Well, what if you never do? What if it takes three months? I don’t know about you, but if I was a customer and I preordered a tee and three months later I had still not received it, I would be asking to get my money back. Or at the very least I would never preorder from you again.
PREORDER ONE DESIGN, NOT AN ENTIRE LINE
This is one thing I’ve never understood, why on earth would you preorder your entire Fall line? I’m sorry, but if you’re banking on preorders to fund your entire new line, you’re going to be disappointed. I have seen only a handful of brands that have been able to successfully pull this off, and the only reason why is because their entire business model is built around it. Customers know everything is a preorder, they are accustom to it, and they know they are going to be waiting weeks or even months for their merchandise. My hats goes off to the companies that pull this off and I’ve got to say it would be sweet to have everything paid for prior to production. Anyway, back to you and your brand, chances are you’re not going to pull this off, don’t kid yourself. Most likely what will happen is you may have one or two designs that preorder well, and the rest will preorder poorly. Customers are only going to be willing to preorder the one or two designs they feel they absolutely have to have, not the ones that are just kind of cool. Now you are back in the same boat I talked about in the previous section, what are you going to do? Not make the designs that sold crappy and just refund your customers? Yeah, that’s a surefire way to create a monster that will bad mouth your company. Basically your only option will be to make everything and hope the products that preordered well will balance out the products that didn’t so you can still turn somewhat of a profit.
DON’T PREORDER PRODUCTS WITH LENGTHY TURNAROUND TIMES
This should be a no-brainer, but I’m going to toss it in here anyway just so I can say I covered it. Don’t preorder cut-n-sew items and other products you know are going to take months to complete. If you do, you better make it very clear to your customers they won’t have their new threads until the seasons change or else you are going to make quite a bad impression and most likely kill any potential repeat customers. At the same time, you need to make it very clear to your customers with any preorder that what they are purchasing is on preorder. Bold some text, watermark your mock-ups, place items in a separate category, etc. You want happy repeat customers? Communicate with them and be sure to cover all your bases so there is no room for misunderstandings.
Don’t be alarmed, but I’m about to suggest you do something really crazy… How about you just wait until you sell enough of your existing designs to pay for the creation of your new ones? Crazy right? Why the hell would you want to do that? Pffft, you’re crazy Kyle, GTFO! Honestly, unless you’re really trying something new or you have absolutely no way of getting the funds to start printing tees this is by far your best option. If you’re existing designs aren’t selling well enough to cover the costs of making some new ones, you really should focus on promoting and selling what you have and not toss more money into new products. Where is it written that every brand must release a Spring, Summer, Fall, and Winter line to be successful? Hell, just drop new tees when your old ones start to run low. There’s nothing wrong with that, and that’s more than likely the direction you will see Sugar Steak going in the future. I will still preorder here and there just for kicks to gauge my brand loyalty and give myself the warm fuzzies when I see customers are eager enough to get another steak fix they are willing to pay for theirs a month ahead of time, but most releases will just happen when they happen. Don’t feel pressured into releasing new stuff just because you see more established brands dropping a new line every season. You’ve got to have patience in this overly-saturated indie market.