Starting a business requires capital. Everyone knows that. And if you are selling a product, you need inventory.
But, how much inventory do you need? How many customers will you have initially? And how much will you have to pay upfront to get the inventory before you have any customers?
Understanding the demand in order to create the supply is an age old question that could make or break a new business owner. But not anymore, Teespring’s VP Chris Lamontagne gives us his best tips to succeed.
Welcome to brilliance that is fueling the rise of pre-commerce – you can understand the demand ahead of the supply. Basically, new business owners can now put the chicken before the egg … or what it the other way around?
What is pre-commerce?
Everyday tens-of-thousands of people create products to sell to customers around the world, nothing new here, except that these products don’t actually exist (yet). For example, at Teespring sellers can design a variety of products (including t-shirts, pillows, mugs, canvas prints, phone cases, etc.) and then share their creation with an audience via a social network, email or a website. Once a product is purchased Teespring then produces and ships the order to the customer and the seller receives the profits. What this mean for the seller? They aren’t saddled with the costs of carrying an inventory.
The Pre-Commerce business model isn’t only reserved for printed products; some of the world’s largest brands are also using it. Earlier this year, Tesla founder, Elon Musk leveraged his huge social media audience to generate over 200,000 pre-orders for its latest vehicle, the much-anticipated Model 3. This represented nearly $14B of sales before they began manufacturing the vehicle. Likewise, Chinese technology manufacturer Xiaomi, implemented pre-ordering via social media across its newest mobile phone models. Through pre-commerce Xiaomi was able to build customer excitement for each product launch and batch customers by order date for product fulfillment.
Create with your customer in mind
We see more than 40,000 new products launched on Teespring every day and our most successful products are those that have been carefully designed with the potential customer in mind. This means starting out by defining the persona of the customer you are trying to target and the more detail the better. Targets such as, age, sex and location are obvious, but below are some questions you can ask to develop a deeper understanding of your target buyer:
– What are their interests, hobbies, beliefs?
– What does their daily routine look like?
– What are their favorite brands and what can be learned from how they market themselves?
– Where do they go to discover new products?
There are plenty of online resources that can help with persona development. I like this one rom the Content Marketing Institute in particular: http://contentmarketinginstitute.com/2016/05/build-buyer-personas/
Design message is key
In most cases, the design message is the key to converting interested viewers into purchasing customers. Notice we’re talking about the design message here, not necessarily the design. Of course, selling beautiful designs is ideal, but many Teespring users don’t have the funds to invest in high quality designs up-front. Instead they focus on finding the things their buyer persona is passionate about and turning that into a successful design. For example, a user who focuses on mechanics may pinpoint the exact audience he or she wants to target by combining elements such as career and family — ”Many people call me a mechanic, but the most important ones call me Daddy” is an example of a very successful design message that speaks to a particular audience.
Create the Hype / Marketing FOMO
This is real opportunity to get creative—your ability to promote your product to your audience is what can set you apart from the competition. We see lots of sellers use ad platforms, targeting customers through Google, Facebook, Instagram ads, etc. and advertising certainly works when you want to get products in front of potential customers. However, some of our most successful sellers are experts in creating ‘hype’ – just like Musk did when he drip fed his followers teasers on the Model 3 release, all the time creating a sense of FOMO (fear of missing out). Historically, this has been done through limited time offers and flash sales, but consumers are largely savvy to these tactics. With that in mind, I wanted to point to some more innovative, maybe even radical ways of thinking about creating product hype below.
> Social Proof:
‘No one wants to be first, but everyone wants to be second’. If you create an environment where buyers can feel comfortable that someone else has purchased this product already this will help improve the likelihood for more sales. Importantly, this needs to be done in a meaningful way and not through fake reviews.
> Sold out / Register your interest:
‘People want what they can’t have’. Often, this is considered as the reverse of the objective (if the objective being to sell products), but creating ‘a queue’ for products is often a great way to a. Understand the demand for the product b. Create a collection of people who are wanting to pay money once you hit the button.
> Buyer referral only / Members Only:
What if the only way you could buy a product was if you were referred by a friend/someone who’s already bought one? Whilst this may sound pretty radical, this tactic is already being employed heavily in some industries (largely in events) and by some major brands. Earlier this year, Adidas released ‘Glitch’ a football boot that could only be purchased through an invite-only app.
It’s all in the Detail
In the digital age, providing a thorough detailed view of products is imperative. This goes beyond sizes and colors—give more practical information about how the customer will interact with the product. A quick way to understand what sort of questions customers have is to read through the review sections on similar products and see what questions are being asked; be sure to collate the most popular ones and answer them in your own product descriptions. Also give consideration to how you are disseminating this information; at Teespring we have recently introduced product videos for our sellers to use. The videos demonstrate product specs and feature actual people demonstrating the fine details of products.
Customer is king – long live the king
With the rise of online commerce, the ‘buyer : seller’ relationship has been flipped on its head. In the offline commerce world, the retail mantra was that the ‘customer is king’, but not so with fast moving ecomm environments, the customer can easily become faceless and instead just a delivery address. It’s imperative for anyone selling online to carefully nurture their customer base – taking on feedback, resolving complaints, listening to requests and ultimately going out of their way to keep the customer happy. Teespring dedicates a lot of effort to our customer support channel. Over time we have seen our investment in customer satisfaction pay us back tenfold with repeat buyer rates on the rise and a growing consensus of happy customers leaving online reviews for others to see.