So, you've crafted an exciting open hardware product – the culmination of your creativity and hard work. Now comes the pivotal question: How big should that initial batch be? Is it 20 units? 200 units? Or should you go big with 2000 units?
It's a real dilemma for sellers. A small batch minimizes risk but might leave revenue on the table. A larger batch offers cost savings, but what if the demand isn't what you anticipated, and you're left with excess inventory?
It has happened to me with my own hardware business, OMLZO. I've had a "great idea" that didn't sell, and I've also made a product that was an unexpected success. The first batch was so small that I missed out on a lot of sales.
One solution is crowdfunding. It's a good option if you expect big success or need extra cash to cover the last mile from prototype to production. However, a proper crowdfunding campaign takes time, preparation, and money and is often a massive overkill for small projects, especially if your product is already ready for production.
Enter Lectronz and our game-changing solution: Threshold Pre-Orders. We've designed this simple tool to help open-hardware creators gauge the market with limited risk.
How does it work?
A threshold pre-order campaign lets sellers collect potential orders before the product is entirely manufactured. Pre-orders are converted to orders only if enough buyers pre-order the product during the pre-order campaign period. It's like a safety net for sellers.
Here's how to create a threshold pre-order campaign:
- Create a splashy product page on Lectronz.
- Select that product for a pre-order campaign.
- Set a campaign duration (1 to 6 weeks).
- Define a minimum goal (units) - it can be as low as 1!
- Optionally, set a maximum goal (units) if you fear being overwhelmed!
- Set a lead time (1 to 12 weeks) for order fulfillment.
The lead time should take into account component sourcing, PCB manufacturing and assembly, and any potential additional step needed before shipping the product to the customer.
Your pre-order pricing, shipping options, and taxes mirror standard orders on Lectronz. Products can't be available for both orders and pre-orders simultaneously.
Crucially, Threshold Pre-Orders aren't for raising funds; they're for fully developed products expected to reach customers within a set lead time.
Running a pre-order campaign
Ready to roll? Submit your campaign for review. Once approved, you can make it officially "go live" whenever you're ready.
Customers can pre-order your product during the campaign period. Their card info is securely collected through Stripe, but no charge happens. Payment only occurs if the campaign succeeds.
Your campaign is considered as successful if:
- It reaches the campaign duration's end.
- The pre-ordered products surpass the minimum goal.
Unsuccessful? No worries. Lectronz cancels all pre-orders and disables collected payment information.
Successful campaign? Congratulations! Cards are charged, and Lectronz converts pre-orders into actual orders within days.
Fulfillment
Once a pre-order becomes an order, sellers must fulfill it within the defined lead time. If the order remains unfulfilled after the lead time has expired, plus two weeks, Lectronz will cancel the order and fully refund the corresponding money to the customer. In case of a refund, Stripe payment fees are charged to the seller.
Our first pre-order campaign
Threshold pre-orders are now in Beta, and we're excited to report the success of our first pre-order campaign on Lecronz.com!
Tweety's Wild Thinking took pre-orders for a wireless Mechanical Keyboard Kit, the Lotus 58 - BLE. It's a fully programmable and customizable wireless split keyboard.
What about you? Launch your new project on Lectronz today!