So I got a product concept but I'm not sure what my target markets response to it will be. It might be a hit and take off or it could completely flop.

I would have to invest about a 100k before the product launch to get the necessary hardware.

Would it be legal to set up a landing page, advertise etc without having the product? And then after someone committed to buying (after entering cc) I say something along the lines of "We've run out of stock" and capture their contact information.

Has anyone tried something like this before?

Pat said:

Would it be legal to set up a landing page, advertise etc without having the product? And then after someone committed to buying (after entering cc) I say something along the lines of "We've run out of stock" and capture their contact information.

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Hm.... I wouldn't go as far as charging them. Maybe get them to commit to an agreement saying if you deliver, they will buy 'this' much or something. You can definitely do a 'coming soon' splash page, collect emails & numbers, and contact them and talk to them and pick their minds. I've done that several times with new ideas..

JamesF said:

Hm.... I wouldn't go as far as charging them. Maybe get them to commit to an agreement saying if you deliver, they will buy 'this' much or something. You can definitely do a 'coming soon' splash page, collect emails & numbers, and contact them and talk to them and pick their minds. I've done that several times with new ideas..

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I wouldn't charge them or save the cc info. But without I wouldn't know who would really be buying? Picking there minds sounds great, didn't even think about doing that...

Yes but slightly different to avoid any issues over the CC. I built the front page pretty much the way I use it today. When they clicked on the buy now they were directed to a page that looked like a cart (totally a facade). They then clicked on the checkout button which took them to the next page where i asked for name, address, phone number and email. They then clicked on the clicked the next button and where taken to a page that said Cart error 403.

There was no cart, no product, no nothing at this point. I then started sending traffic to the page with Google adwords. I then was able to track with Google analytics what the cost of converting customers into sales was. I then increased that cost by 30% because even people that make it to the last page of the checkout process won't all buy. If you can break even on these numbers and you can generate descent traffic then go for it. I didn't even bother actually capturing that customer info because these were people that wanted the product right then. I went from this testing stage to making money in 10 days and i knew I'd make money and I do.

If the test hadn't worked out I wouldn't have invested that much time or money and testing the traffic with Google Adwords was worth every penny.

Try and get a few customers to pay you money to order one. That will tell you a lot about your target market fairly quickly.

If you can't get a customer to order one from you it speaks to a few things: either you can't sell it or the target market isn't there - either way that's important information to know before you start dropping money.

I'm not talking about letters of commitment or intent, I'm talking about cash money.

Rickson9 said:

Try and get a few customers to pay you money to order one. That will tell you a lot about your target market fairly quickly.

If you can't get a customer to order one from you it speaks to a few things: either you can't sell it or the target market isn't there - either way that's important information to know before you start dropping money.

I'm not talking about letters of commitment or intent, I'm talking about cash money.

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To make sure I got it right: You get the money before you have a product? Even if it's gonna take like half a year until you got it? Is that even legal?

Pat said:

To make sure I got it right: You get the money before you have a product? Even if it's gonna take like half a year until you got it? Is that even legal?

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There are deliveries that take years. Customers pay to wait in line. That's a lot of information about their target market right there.

Deposit now, full pay later, how ever you want to structure it.

The best part is that they don't have to invest huge sums of money making something that nobody will pay for.

Good luck and best regards.

JamesF said:

Hm.... I wouldn't go as far as charging them. Maybe get them to commit to an agreement saying if you deliver, they will buy 'this' much or something. You can definitely do a 'coming soon' splash page, collect emails & numbers, and contact them and talk to them and pick their minds. I've done that several times with new ideas..

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James has totally got the point. Build your list, and in the meantime, by "picking their minds" discover how to make your product even better, and even more desirable and marketable to them.

"The MOST IMPORTANT RULE: Have a customer before you start your business. This is a corollary of the phrase, 'ideas are a dime a dozen'. There is another corollary: lazy is best. If you have to work for two years before one dollar of revenue comes into business then that's too much work. I’m lazy so I like money coming in with as little work as possible."

"The only thing that’s important is money. You get money by having a customer. You get a customer by satisfying a need that’s so important to them they would be willing to pay for it. If you have a customer that’s willing to pay you money, then execution becomes a lot easier. Life as an entrepreneur is hard. Why make it harder for yourself?"

Easiest Way To Succeed As An Entrepreneur

As an investor I don't care if a business has the best product in the world. I don't care. I want to see cash money. I want to see a ton of revenue, a ton of profit, no debt, and fat returns on equity. If all I see is a product with no customers (which means there's no money coming in), then I don't see the point.

With regards to the businesses that I am invested in, I have no idea how good their products are. I don't really care how good the products are. All I care about is how good the business is. If the business can't sell their product, it's really quite worthless. Don't waste more time than absolutely necessary.

My opinion only.

Best regards.

Pat said:

To make sure I got it right: You get the money before you have a product? Even if it's gonna take like half a year until you got it? Is that even legal?

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No it's not legal to charge a credit card for a product you can't ship in a reasonable amount of time which is why if you do what I say above you avoid the entire problem. Also even if you take the order but don't capture the funds you still have to set up a cart and have a merchant account, etc.

Another option is to test the viability of a market is if possible become an affiliate for a competitor.

To check if people will actually buy your product, have them go through a regular checkout, and after they confirm the details and click the final "purchase" button, just redirect them to a page that says something like:
"We are sorry, we are out of stock at the moment. You have not been charged for this product. We will notify you as soon as new stock arrives." And save only their email address for future use.

This way you can measure how many real costumers you have and build a list of potential future customers.