Profiting from Pre-Sale Listings

Satisfy eager buyers while managing your inventory.

by Dennis L. Prince
- Nov 19, 2010

Whether the annual holiday shopping season is upon you, or you detect an oncoming opportunity that shows a profitable promise, astute sellers have learned how to get in front of buying frenzies by offering tantalizing unreleased items.

A listing method known as pre-selling enables savvy merchants with inroads to upcoming inventory to get a head start on the competition, selling in-demand goods to buyers eager to become among the haves, not the have-nots. Moreover, the early offering of these "presale" goods has been proven to be an ideal way to establish a dynamic inventory management system.

There are rules and special points of attention to consider, however, when offering presale items. Here's how you can become successful in presales, satisfying eager buyers, while employing some professional inventory management principles along the way.

Pre-selling in a dynamic new way

What exactly is dynamic inventory management? Simply put, it's a method of receiving, handling and distributing goods only at the time of sale. Sellers with access to products and suppliers, who can assure supply at the time a sale is made, are able to perform transactional fulfillment as it occurs. In this way, sellers don't need to physically possess inventory to conduct business. They only need to be able to access it when a buyer makes a purchase.

When selling items you don't physically own, ensure your suppliers can and will deliver the goods quickly and consistently

And when it comes to soon-to-be-released goods, you can help your buyers secure the sure-to-be-sold-out items they crave, fulfilling their orders when the goods actually become available. When done right, it's the proverbial win-win situation.

Establishing a dynamic inventory approach

When you establish reliable dynamic inventory sources—these could be wholesalers, distributors, or manufacturers—you put these sources in charge of managing the inventory for you, whether that inventory is located across town from you, out of state or even from somewhere around the globe.

In some cases, you can elect to purchase inventory, yet have it stored and maintained at the source of supply on your behalf. Or you can establish a relationship where you don't purchase the inventory until you've actually sold it. The latter method is the most dynamic, since it not only allows you smart off-site inventory management but also enables smart asset investment (meaning you keep your funds and only purchase inventory at the time of a sale).

But what supplier would trust its sales potential to sellers who haven't purchased the goods up front? The answer: plenty.

As a seller, when you engage in a relationship with a supplier, you solve one of their key and most costly problems: marketing and selling the goods. It's a match made in heaven, really, since the supplier needs as many outlets (or sellers) to present the goods for sale, while the sellers need reliable sources of supply to fulfill the orders.

The key to all of this is to be certain that, when selling items you don't physically own, you're able to ensure your suppliers can and will deliver the goods quickly and consistently whenever a sale is made. This is the balancing act you'll need to perform when you choose dynamic inventory sales. It requires you keep in constant communication with your suppliers to ensure that their inventory is on-hand, that it is as you describe to your buyers, and that it will be available and delivered when promised.

If not managed and monitored closely, your dynamic inventory solution could easily become a dynamic nightmare. The truth is there are far too many tales of dynamic selling gone wrong when supplies unexpectedly dry up, orders go unfulfilled or the quality of goods is woefully less than what was advertised. If you'll be venturing into dynamic sales and fulfillment, be sure to establish a solid relationship with your supplier(s), sample the goods before you offer them and keep in regular communication with your supplier(s) to stay in front of any inventory shortage situations.

While it's within your rights to state that all sales are final, such a policy isn't well suited to presale goods

Pre-selling on eBay

The good news is that, if you seek to offer presale goods at eBay (and you should, since many upcoming "hot items" receive an enormous amount of bidding activity), the site allows and encourages sales of this sort. There are rules, of course, as follows:

  • Sellers must guarantee that presale items will be available for shipping within 30 days from the auction's close.
  • Sellers must clearly indicate in the listing that the item is a presale item and will be fulfilled within 30 days (or less).
  • Sellers must be clear that any "handling time" specified in a presale listing refers to the actual lead time from the end of the listing until the item is shipped. Handling time should not include lead time to have inventory arrive to the seller's possession (or that of any third-part fulfillment agent).
  • And, within the actual site listing, sellers are required to provide disclosure that the item is a presale offering in a font size no smaller than three points.

If any of the foregoing conditions stipulated by eBay seem strict or stringent, they're not. These are good guidelines by which you should conduct your presale business, whether on eBay or on your own online sales site. Full disclosure is good for business in that it sets a buyer's expectations and helps you ensure your process is always operating properly.

A special note about customer satisfaction

While it's within your rights to state that all sales are final, such a policy isn't well suited to presale goods. Whether an item arrives differently than your supplier (and ultimately, you) described, or if it arrives late, damaged, or not at all, you must absorb this sort of fallout in order to avoid angering and alienating your customers.

Some sellers have tried to blame problems of item delivery, quality, or content upon their suppliers, shifting the resulting cost and inconvenience to the buyer. The fact is, in presales, it is the seller's ultimate responsibility to guarantee that whatever is sold is "as advertised" in all aspects of the phrase.

When you put customer service at the forefront of your presale business, you'll find it to be the perfect finishing touch to a dynamic business method.

About the Author

Dennis L. Prince has been analyzing and advocating the e-commerce sector since 1996. He has published more than 12 books on the subject, including How to Sell Anything on eBay…and Make a Fortune, second edition (McGraw-Hill, 2006) and How to Make Money with MySpace (McGraw-Hill, 2008). His insight is actively sought within online, magazine, television and radio venues.

Opinions expressed here may not be shared by Auctiva Corp. and/or its principals.

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