Thread: Get the customer first..

I met a guy that is supposedly an entrepreneur and he told me that before I invest money in inventory I need to line up customers who are interested first, otherwise I'm sitting on unsold inventory.

Sounds great...but uh, who does this?

The ONLY time i've ever been advertised to for a business or product that has not YET launched is for things like up-coming game/movie trailers.

NEVER have I seen or heard about any business that said "Hey, we're going to start selling xyz, but we need customers before we open the doors. You interested?"..

Plus, if I'm in need of a product, I'm going to go out and buy it. I'm not going to wait around for weeks/ months for someone to launch their business before getting what I need. What sense does that make?

So I ask you guys who HAVE a business. Did you get customers before you started that were NOT from your previous employer's contacts?.. And if so, how did you get this lined up?

There's no one right way to make money. There's no defined linear path. I have seen this done before. At is core principals, it's similar to raising start up capital.

Originally Posted by jcalifornia

There's no one right way to make money. There's no defined linear path. I have seen this done before. At is core principals, it's similar to raising start up capital.

100% agree, there are a thousand ways to go about getting off the ground with a business. Do whatever makes sense to YOU.

Actually in many business that is the case. More and more businesses these days do NOT carry a larger inventory. I am sure the person that advised you is not talking about hundreds or even a few thousand dollars but large inventories. For example if you are importing lets say Exhausts for MBZ, you can not order 100 sets at 2k a piece because you will have 200k out that you might or might not sell. Its a big risk when there is no track record. Thats why you take orders before and maybe after getting familiar then you pre order more and more. Most places don't keep high priced products in stock. That statement is actually very true and makes business sense.

For large, expensive orders I can see that being the case.

Well you said the guy was an entrepreneur so I assume we are talking about a serious business. If your inventory is a few thousand dollars then thats more like a junior whopper.

Really depends on what you're selling. Some products/services need immediate fulfillment. Others can have a lead time without causing you any havoc. There's no general rule of thumb that applies across everything.......

Larry Ellison used to do that - line up a customer THEN develop his product. risky, but less so when you're on his level

Bloomberg Game Changers: Larry Ellison - Video - Bloomberg

I've been pondering this one for a while now....it got me curious and now that I'm able to post in this section I thought I might add my 2c.

This is actually possible to do,it will depend on your product obviously but you could do it.

First you would need just one of product(or prototype) and I would think you would need to use it/display it/talk about it/show it off in all forms of social media possible and try to create a "buzz" about your product to get people/companys interested.

To further generate interest create a website with for example "coming soon" or "limited production run" and information (and maybe even invite people to leave their email for further info/product release) so that people/companys can google/tweet it etc.

Hopefully the result from that will be said companys/people will be ready to place orders for the product(s). From there its down to numbers/production time/available cash flow.

I know its probably not as simple as that but that I would imagine it is one way of "Getting the customer first."

Thoughts?

^^I have heard of something similar in the past.

In order to see if there is consumer interest in a product, companies create webpages for products with "order/buy" links to blank pages. According to the statistics from google analytics (or such) they can see if there is interest to buy the product or not. Another way to do this is to set up an AdWords campaign, and see how many people are clicking on your product. This is can help you decide whether to launch a product, or whether to stock up on inventory or not, without spending too much money.

Not sure if this relates to your "getting the customer first question," but I hope it helps.