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What Exactly Is ‘Pretail?’

The world of eCommerce is constantly changing and eCommerce fulfillment services are always following on the tail of latest trends to ensure that products continue to make their way to the customers that want them.

One incredibly popular eCommerce trend that started as not much more than an idea and a curiosity for Internet dwellers has evolved into a concept that small brands find almost necessary before launching a product today.

The idea of “pretail,” also known as “pre-launch” or simply by the names of more common platforms like Kickstarter or Indiegogo, is almost inseparable from modern eCommerce, but it’s really a fairly new concept for eTailers. Instead of creating a prototype of a product, then launching it on a limited basis, or using a market study to project the interest in the item or service, pretail simply asks the public to buy into it—or not.

The Big Advantages of Pretail

When Kickstarter and its kind first started offering opportunities for people to fund their ideas into commercial products, the idea of pretail wasn’t widely accepted, but it didn’t take long before the idea of “funding a Kickstarter” was as popular as rescuing a shelter dog.

And why not? These idea incubators offer great opportunities for both inventor and consumer, without all the red tape of market researchers and manufacturers in the way. Pretail can provide a number of advantages for SMBs, including:

  • Lowering the cost of launching a new product. Since pretail products don’t launch unless a particular monetary threshold is met, owners have very little capital at risk. They don’t need to invest in long term marketing studies since they already know there’s a market if they exceed their threshold and all their production, warehousing and distribution costs will be covered by the money their fans put into the product.
  • Decreasing the risk of quirky or unusual products. There was a time when it was really hard to get oddball products onto the market because big manufacturers weren’t interested in absorbing the risk. Today, if the users on a crowdfunding site want to manufacturer soup ladles that look like The Loch Ness Monster, then the risk is eliminated and the idea can come to life provided it has enough backers. Pretail is a great way for small time inventors to get their ideas to market for the first time.
  • Virtually eliminating the need for long-term warehousing. Since products are manufactured after a set donation threshold is met and after a given date, they’re all expected to ship at the same time. This is a huge advantage for testing the waters, so instead of finding yourself stuck with a thousand pallets of soup ladles to store somewhere, you’ll only need to pay for warehousing long enough to get those items to their new homes. If you want to produce extras, it’s a pretty safe bet that they won’t sit for long, either.

Pretail gives retailers and manufacturers a really tactile way to push against their markets to discover if a product has legs or if it really should be scrapped with almost no risk involved. Despite the obvious advantages, not every company is a fan, but that just leaves a little more space in an increasingly noisy marketplace for your latest and greatest idea.

December 13, 2016
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