Logistics Pre-Order!

[MakeMoreMoves]

I am currently in development of my own brand.

1) Get Samples
2) Use Samples for profesional photos
3) Use photos to build website.
4) Set website to "Pre-Order"

Ok after doing research, it seems that you can only charge someone's credit card for preorders once the item is ready to ship. But I believe that once my product goes into full production, its going to be months (don't actually know yet), for it get to my customers. I was planning on using my customer's cash to pay for the for inventory first-hand so I won't be using my own money. This isn't going to work if I can't charge them till shipping. The price per piece is expensive! At max it might turn out to be $70 per unit.

Anyone got a logical solution to this besides taking out a loan?

So far only got 1300 instagram followers on a niche account started a month ago.

 

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[Walter Hay]

I am currently in development of my own brand.

1) Get Samples
2) Use Samples for profesional photos
3) Use photos to build website.
4) Set website to "Pre-Order"

Ok after doing research, it seems that you can only charge someone's credit card for preorders once the item is ready to ship. But I believe that once my product goes into full production, its going to be months (don't actually know yet), for it get to my customers. I was planning on using my customer's cash to pay for the for inventory first-hand so I won't be using my own money. This isn't going to work if I can't charge them till shipping. The price per piece is expensive! At max it might turn out to be $70 per unit.

Anyone got a logical solution to this besides taking out a loan?

So far only got 1300 instagram followers on a niche account started a month ago.

If the product is not custom made, you might consider ordering one or more samples as soon as you receive an order, and have them shipped via air courier. Delivery to you should only be a couple of days if the goods are ones that your suppliers carries in stock. The courier cost will eat into your profit margin, but if you have bought from the actual manufacturer and negotiated the best price, you should at least make some profit.

I would not ask for pre-orders in that case. This way you will have some possibility of validating the product before spending too much.

If the products have to be made after you order you will probably have no option but to borrow funds to buy inventory.

Before you proceed much further you need to know your exact costs.

Walter

 

[amp0193]

I am currently in development of my own brand.
Ok after doing research, it seems that you can only charge someone's credit card for preorders once the item is ready to ship.

Says who?

If it's ready to ship, it's not a pre-order then, is it?

But I believe that once my product goes into full production, its going to be months (don't actually know yet), for it get to my customers. I was planning on using my customer's cash to pay for the for inventory first-hand so I won't be using my own money. This isn't going to work if I can't charge them till shipping. The price per piece is expensive! At max it might turn out to be $70 per unit.

This is my plan. Have pre-orders cover the 70% balance payment before order ships.

 

[MakeMoreMoves]

If the product is not custom made, you might consider ordering one or more samples as soon as you receive an order, and have them shipped via air courier. Delivery to you should only be a couple of days if the goods are ones that your suppliers carries in stock. The courier cost will eat into your profit margin, but if you have bought from the actual manufacturer and negotiated the best price, you should at least make some profit.

I would not ask for pre-orders in that case. This way you will have some possibility of validating the product before spending too much.

If the products have to be made after you order you will probably have no option but to borrow funds to buy inventory.

Before you proceed much further you need to know your exact costs.

Walter

Thanks Walter Hay. My item is custom made in the US, but thanks for the advice!

Says who?

If it's ready to ship, it's not a pre-order then, is it?

Other forum boards and other businesses, they made it seem like its basically theft, if you charge someone months before the product is ready, besides kickstarter of course. Sorry about my wording, but my product is not ready to ship. If they do place a pre-order, it could be over a month before they get the item (I have to ask manufacture for exact time frame). A common theme I see is this: "We will not charge you credit card until the product is ready to ship"

This is my plan. Have pre-orders cover the 70% balance payment before order ships.

I am going to use Shopify and I believe their payment authorization gateway lasts 7 days. I do not believe other 3rd party gateways stretch over a month. Which was why I was avoiding % based.

 

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[amp0193]

Other forum boards and other businesses, they made it seem like its basically theft, if you charge someone months before the product is ready, besides kickstarter of course. Sorry about my wording, but my product is not ready to ship. If they do place a pre-order, it could be over a month before they get the item (I have to ask manufacture for exact time frame). A common theme I see is this: "We will not charge you credit card until the product is ready to ship"

I don't care about what forums say, I care about what the law says, and as far as I know, it's legal. I don't think MJ had any problem taking pre-order money for Unscripted .

As long as you're clear and upfront and say "This product will be shipping in 2 months", and they read that, and still agree to pay you, then what's the problem?

Why do you think it's ok to do on Kickstarter, but not ok to do the same exact thing on your own website?

@PTP Anyone accuse you of theft because you charged their credit card on a pre-order?

I am going to use Shopify and I believe their payment authorization gateway lasts 7 days. I do not believe other 3rd party gateways stretch over a month. Which was why I was avoiding % based.

I wouldn't know how to keep an "open" order like that, where you take a card and leave it uncharged. Maybe there's an app for that?

You could always take a 50% deposit payment, and then invoice them for the remainder when you're ready to ship. But that seems kind of silly for only a $70 product.

 

[PTP]

@PTP Anyone accuse you of theft because you charged their credit card on a pre-order?

@MakeMoreMoves I didn't have any issues at all taking pre-orders. Although I did have 1 or 2 people ask me why their item hadn't shipped yet.

I used this app on shopify. On top of that I added in bold red letters at the bottom that the item was on pre-order and the time frame it would be shipped in. The app also tells the customer that the item is being pre ordered when they hover over the "pre order" button in addition to showing "pre order" in the cart page.

The key is to be as clear as possible to avoid confusion.

As per Shopify:

"According to law, when selling items as pre-orders, you are not supposed to capture payment immediately unless the customer fully understands that they are purchasing a product or service that will be delivered at a later date. But you can authorize the payment without capturing the funds immediately. This allows you to capture payment at a later date when you are fulfilling the order.

Read the article here.

I wouldn't know how to keep an "open" order like that, where you take a card and leave it uncharged. Maybe there's an app for that?

You can manually capture payments on Shopify by going ot Settings>Payments> Scroll to the bottom and click "Manually capture payments for orders".

This is what Shopify is talking about when they say that you can only authorize payment capture for 7 days on Shopify Payments. However, if you automatically capture the payment, and let the customer know that they are pre ordering the item you should be fine.

 

[MakeMoreMoves]

@MakeMoreMoves I didn't have any issues at all taking pre-orders. Although I did have 1 or 2 people ask me why their item hadn't shipped yet.

I used this app on shopify. On top of that I added in bold red letters at the bottom that the item was on pre-order and the time frame it would be shipped in. The app also tells the customer that the item is being pre ordered when they hover over the "pre order" button in addition to showing "pre order" in the cart page.

The key is to be as clear as possible to avoid confusion.

As per Shopify:

"According to law, when selling items as pre-orders, you are not supposed to capture payment immediately unless the customer fully understands that they are purchasing a product or service that will be delivered at a later date. But you can authorize the payment without capturing the funds immediately. This allows you to capture payment at a later date when you are fulfilling the order.

Read the article here.



You can manually capture payments on Shopify by going ot Settings>Payments> Scroll to the bottom and click "Manually capture payments for orders".

This is what Shopify is talking about when they say that you can only authorize payment capture for 7 days on Shopify Payments. However, if you automatically capture the payment, and let the customer know that they are pre ordering the item you should be fine.

Repped. Thanks!

 

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