The perils of pre-orders

A couple of years ago, much of my business was built on customers buying products ahead of the products’ release. Pre-orders allowed us to know what the probable requirement was for a product and buy in sufficient quantities. It meant that when the item finally arrived, most the stock was paid for. It took much of the threat from retail.

Another advantage was that the product already had a thorough page on the website and has been indexed by Google long before it came into inventory. Those men and women who did such pre-orders had an edge over those retailers who just recorded products when they came into stock.

Regrettably the advantages for pre-orders are eroded in the disadvantages. The suppliers saw a fantastic item and started asking retailers to pre-order — so the suppliers could gauge demand.

Additionally, in my line many suppliers seldom offer more than a restricted set of pre-orders. Retailers who don’t set a pre-order often overlook. The principal issue with suppliers offering pre-orders is typically a too-short window which shuts long before the stock is expected. This means that the supplier pre-order cutoff is typically long before a realistic consumer cutoff date. So retailers need to return to imagining.

In more recent years, the growth of Amazon and Ebay has decreased the viability of pre-orders. Most customers, when they buy from Amazon or Ebay, expect near instant delivery. So no matter where they buy a product, even from your own website, they are used to prompt delivery and complain once the item does not arrive. Even when your site clearly says”PRE-ORDER” in large capital letters, shoppers do not read. And it is always the merchant’s fault.

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Concerning selling pre-order things on Amazon or Ebay, forget it. Ebay, especially, requires you to stock the item you are selling. If it does not arrive to the client in a few days, you might suffer from Ebay’s new late delivery metric, if not negative feedback.

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Amazon is subtler than that, and by being so is far more dangerous. Amazon gives you the ability to label a product as a pre-order. It sends emails to the customer detailing the expected dispatch date and delivery date as set by you, like a few months later on. All seems well. The massive problem is that after 30 days, if you have not discharged the sequence, Amazon cancels it. No matter what you set the pre-order date. Your metrics have a hit.

Another problem is that many manufacturers do not have any sense of urgency. Planned release dates can pass and no stock arrives. I have experienced stock arrivals around a year late. One of my most annoying late deliveries was Santa gizmos that arrived in January. Slipping release dates are bothersome. Clients get angry and blame the merchant. Orders get cancelled. Nobody wins.

One of the worst cases for me was that the Django figures. A few were printed from the U.S., having been flown in for the film release. The massive majority were shipped by sea and were due from the U.S. a few weeks later. Another container was coming in the U.K., where I live, with a few hundred examples of these figures.

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Demand for these figures was enormous. So I listed them on our site and Amazon. I received innumerable pre-orders because I kept my prices sensible. All my stock was pre-ordered and the supplier confirmed that the figures were loaded on a container and on the sea, due to arrive in a couple weeks.

Then the film studio received many complaints and the U.S. stock was withdrawn. My inventory was secure and on its way. However I withdrew the item from sale. The question was what to do with the present orders. The figures would land in time — in Amazon’s 30-day limit — but would the supplier release the inventory?

I contacted every customer and asked if he would wait, or if he wanted the order to be cancelled. The massive majority of customers said they would wait. Unfortunately, although all the Django figures came and are in a warehouse, none have been released by the supplier. I needed to cancel those orders and notify each of the customers. I got away with it, barely.

I kept all the customers informed every step along the way. I had them all on my side and did not get one negative comments. It could easily have gone the other way and with the possibility of over 100 complaints, I would easily have been expelled from Amazon.

The point is that if you provide a product on pre-order, you are taking a risk. You do not have any control. The item could arrive late, or not. The item’s specification could change. Truly the price could change. Worst of all is the fact that it is you, the merchant, who will be blamed by the customer if any of these things happen.

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That’s the reason I’ve stopped doing pre-orders. It’s not really worth the problems that can arise.

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