Operations

Pre-Orders. A Primer and Introduction

January 1, 1970
TLDR;
15m read explaining why you should sell via a Pre-Order and how to execute one.   While we include how our industry first Pre-Order system can manage this entire process with minimal effort at the end of this eBook - this article is written for gyms using any billing and management platform.  For those on other platforms, we have included resources to run your pre-order at the end of this eBook.

Cash Flow Is King

Every business, from large to small, needs to develop multiple streams of income. The obvious benefit of this is simply "more revenue".  Most business owners overlook the more important factor of establishing multiple revenue streams:  security of cash flow. Survivability in the business world boils down to one simple concept: You have to have money in the bank to pay the bills and yourself.  Ending up short just one month could mean the end of your business. There's many fitness facilities out there that live and die with one revenue stream: Memberships. While this is likely your bread and butter - if it's representing more than 80% of your revenue, you're potentially in a dangerous position.  One or two bad months will put a significant strain on your cash flow.  You are going to want to begin to look to develop additional revenue streams to put some insurance around your cash flow. This book focuses on the sales of Products as an additional source of revenue for your business.

Products - The Good, The Bad, The Ugly

Selling products can either be a massive blessing to your bottom line, or a wicked curse.  The issue with selling product is you have to be ON TOP of it. Bad profit margins, shrinkage, spoilage, unsellable inventory.  Any one of these can turn any retail operation into a money bleeding operation quickly.  The issue in many boutique fitness facilities is they cannot afford to staff a full time person to manage and run retail, so generally one if not all of the above retail blights hit gym owners hard. If you are reading this eBook now, you likely have experienced this first hand. However, with a little bit of organization and management, there's a way you can sell products virtually risk free.  That answer is the Pre-Order.

Pre-Orders - The Ultimate Revenue Stream

In this eBook we will be discussion Pre-Orders of Products as the perfect solution to Product Sales, because they:

  1. Eliminate all downside risk of selling products.
  2. Provide you immediate cash flow.
  3. Allow for a healthy profit margin.

At the end of this book we will give you some resources to manage your Pre-Orders along with a turnkey, step by step process on how to pull one off.

No Downside Risk

With Pre-Orders,  you sell the merchandise before you actually place the order to purchase the items.  By doing so, you eliminate all the key risks involved with product sales. You will not have to stock any inventory - you will sell exactly what is ordered.  You won't make a misjudgment ordering colors or styles of the products, and get left with a bunch of unsellable inventory.  Best of all, there can be no items stolen or missing, as there will be no inventory to stock.

Immediate Cash Flow

By taking the money up front of the items and using that money to pay for the order, you also never even have a penny of your own money in the game. This is critical, as you will not have to front money to buy the inventory - nor will you have to wait for the products to (hopefully) sell to replenish your cash flow. Remember, cash flow is king.  If you outlay $2,000 to buy t-shirts and you do not fully recoup that $2,000 for 60 days, you have taken $2,000 out of your bank account that might be direly needed for other important things down the road.

Healthy Profit Margin

The great part about the Pre-Order is there's no mysteries about anything.  You set a price ahead of time at the profit margin you'd like to make then offer it for sale to your clients.  You can set this price knowing exactly what your wholesale price is on the items being bought.  Things like shrinkage and unsellable inventory ultimately kill your overall profit margin, and using Pre-Orders you will never have either of those.

The Stages of A Pre-Order (Non-PushPress Example)

A Pre-Order happens in a couple of stages, which we will go over here.  For the sake of helping paint a clear picture we will choose a fictional T-Shirt Pre-Order.

  1. Product Design and Creative.
  2. Pre-Order Sales and Marketing.
  3. Order Placement and Fulfillment.
  4. Product Distribution.

Stage 1: Product Design and Creative

This stage is optional, if you're working with a new product that requires creative work.  In our case, we're making a new T-Shirt for sale, so we need some time to have our shirt designed.  In our fictional case, we turn to one of our creative members who is able to whip up a cool designed shirt we think we can market and sell in a limited fashion.  This process of design and back-and-forth of creative changes takes us a week.If you're looking to leverage Pre-Orders for Apparel sales there's a few key considerations that will help maximize its success:

  • Come up with a unique / seasonal design.  Do not use your standard logo on a plain t-shirt.  Opt for a unique spin on your logo or print apparel around seasonal events or themes. There will be no urgency or fear of missing out on a standard shirt.
  • Look to make it higher quality that normal apparel.  Again, playing to the fear of missing out, a higher quality apparel item carries more cache.
  • Design around limited edition themes.  Include the year / season / event on the shirt.  Think of it like a band/tour shirt.  People relish their "early in the bands life" tour shirts, proving that they were ultra-fans from before the band became popular.  The same thing can become of your brand as you grow and create your own legacy.

Once you have sourced the design, contact a printing shop and get a firm quote.  Make sure they take into account all facets of the order including screen fees, colors, etc.  Get a wholesale price list from them, and make note of any price breaks they give you.  Also note their expected printing turnaround time.  Take this time and add two weeks to it.

Stage 2: Pre-Order Sales and Marketing

Once we have the shirt design, printing timelines, and pricing information, we can begin to market our Pre-Order. Depending on how your management system works, you might have to make personal tweaks here.   We are assuming your online system can create, market, and sell a product online.  If it cannot sell this online easily, read the section about selling this off-line. Create a new Product and give it the following attributes:

  • Name it "Whatever-Product-Name Pre-Order". So for our case we would name it "2017 PushPress x Lululemon Logo Tee/Tank Pre-Order".  This makes it clear to your buyers it's a  Pre-Order.
  • Upload GOOD artwork and mocks of the item.
  • Put key Pre-Order information in the product description.
  • Enter the Price and Save the Product.

Make sure when setting up your Pre-Order that you enter a clear and concise cutoff date.  After this date you will no longer take orders for this Pre-Order and you will take the product offline from further sales.

Online Marketing and Sales

This should create a product sales page that your clients can access from their home computers or mobile devices.  if your system does not do that, or if you feel the sales page will not result in sales, read the next section "Off-Line Marketing and Sales". Now it's time to announce this to your clients. We recommend you follow a marketing strategy that can be found in the downloadable resources section of this eBook.  Not all of your clients will be paying attention to only one social media outlet, or see the email you send out, so we need to hit many different angles to maximize the reach we get.  Check this resource out for pre-written message templates.

Off-Line Marketing and Sales

Regardless if your system can do online sales or not, we've found that in-gym marketing and sales dramatically help increase sales. In-gym marketing should include things like printed fliers placed on entryways or bathrooms, messages on displays around the gym, and announcements in central locations of your gym (the whiteboard or water fountain?)We've come to the conclusion it's one of two types of people who will end up buying in person, and neither should be discounted.

  1. The Procrastinator.  This person really wants to buy the Pre-Order, but something always pops up in the way of action.  Take the excuses away by marketing to them and closing the pre-order sale in person.
  2. The Person Who Needs a Nudge.  A close cousin of the procrastinator, you have the person who wants to participate in the Pre-Order, but isn't quite compelled enough to even click a link and fill out a form.

Selling in-gym is a critical piece of a successful Pre-Order.  There are a certain percentage of clients in every gym who will wait on the Pre-Order and then come up to you after it's closed and ordered asking to get in on it.  Happens every time.  Try to fish those lazy clients out of the weeds early. We have found that in-gym sales is particularly effective in one of two easy ways:

  1. Sign Your Name on the Whiteboard.  Have an announcement on the whiteboard for your Pre-Order and have each coach to mention it with announcements before class.  Ask members to simply sign their name on the board to be included in the Pre-Order.
  2. Sign Your Name on a Pre-Order Sheet.  Put a Pre-Order sheet on your front desk or around your gym.  Ask your members to simply put their name on the list along with a size or other option for the product being sold.

Stage 3: Order Placement and Fulfillment

Once the Pre-Order is closed compile your orders and place them with your vendor.  To make things easier for you, we've included a spreadsheet to help you manage this - find it at the end of this eBook. Before placing the order, make sure you charge everyone who happened to order via an offline source so you have their funds available.  If you took any orders from a whiteboard, copy those names and order details down onto a paper order sheet (provided at end of eBook).  Take all paper order sheets to your billing system and hand enter each as another order for the product.

Stage 4: Product Distribution

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