What is a pre order in wholesale & to manage them


Tue Mar 23 2021

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Setting up a pre-order system for wholesale orders allows retailers to purchase products before they’re ready to ship. As a result, customers can buy products they love without having to worry about them selling out.

For some time, retailers have relied on the pre-order model, in which brands can reap a number of benefits. 

These advantages include: 

  • Guarantee a certain number of sales over a specific amount of time. When it comes to pre-ordering inventory, brands can have peace of mind knowing what to expect when it comes to how their products will sell over a given period of time. While retailers may not know how many pre-orders they’ll get with their offering, they can count on all those sales and revenue for the launch period. This not only gives them an idea of how their product will perform, but also gives them a clear picture of how much revenue a particular product will generate. 

  • Prevent financial loss from over-production. Pre-ordering your products prevents brands from having to maintain the costs of excess inventory. That’s because retailers order a set number of products to sell to their customers. As a result, they can reduce the costs of marketing, manufacturing, and distributing their products.

  • Increase sales. Through pre-orders, retailers don’t have to worry about products not selling. Retailers can use their pre-orders chart to adjust their stock. That way, they can have the right amount of inventory to meet demand.

  • Boost marketing campaigns. A pre-order campaign can create buzz and excitement for new products. Marketing certain products months, weeks, or even days in advance can build anticipation, causing customers to look forward to the official launch. 

The Pre-Orders System Explained

Pre-ordering involves a retailer selling products they don’t yet own. This means that the retailer only manufactures an end product once a customer places an order. 

This often means the customer has to wait longer to receive the product. However, this extra time allows for more flexible customization compared to the traditional option of buying directly from the shelves. 

Here’s what the pre-order process looks like:

  1. A retailer that sells wholesale handbags signs a contract with a supplier that guarantees a certain number of products on release day.

  2. After solidifying the deal, the retailer begins a marketing campaign to promote those handbags.

  3. Customers become aware of the handbags from the brand’s marketing campaign or through word-of-mouth. As a result, they place an order. And if the brand provides the option, they’ll customize the order to the customer’s preferences. The customer will then enter their information, their payment method, and learn about the retailer’s delivery policies. Depending on the retailer, the customer will either pay full price for the handbag or a minimum order deposit, which allows them to pay the rest of the cost later. 

  4. When the handbags arrive at the retailer’s warehouse or distribution site, the fulfillment team will package them immediately and ship them off to the customer. 

How to Manage Pre-Orders Efficiently 

Pre-orders allow businesses to plan production effectively, but without a proper strategy in place, managing pre-orders can be challenging. 

Dedicate a Team to Pre-Orders

When it comes to building a strong pre-ordering strategy, retailers should delegate an individual or team of people to manage pre-orders. This involves informing the team of the brand’s goals, strategies, and marketing plan for bringing a pre-order product to market.

Make a Pre-Order Plan

It’s important to make a product timeline and divide the process into multiple stages. Here’s an example:

  1. A retailer decides which manufacturer to collaborate with to bring a product to market.

  2. The next step is to choose a product. Depending on the brand’s target market, they’ll choose the product that will bring the most value and generate the highest possible revenue.

  3. The brand and the manufacturer work together to determine the proper timeline to completing the manufacture of the product and distributing it to the customer. 

  4. Next, the retailer decides how and when they will take pre-orders, how they’ll handle the peaks and valleys of pre-ordering, and how they plan to manage inventory. 

Use Inventory Management Software

To streamline their processes, brands can use inventory management software to manage all aspects of their workflows in one place with optimal efficiency. 

This solution can help retailers manage inventory before pre-orders even arrive by allowing them to enter certain data. For example, brands can document how much space they currently have in their warehouse. This allows them to keep track of how much space they’ll need when the products arrive.

As retailers learn how to buy wholesale clothing or how to start a boutique they can leverage a pre order system to guarantee sales and reduce waste. As a result, they can grow their brand and generate revenue.

If you enjoyed this article, you should know that Mirta can provide you with a pre-order system to ensure customization and a greater guarantee that your merchandise will be purchased!