To pre-order or not to pre-order, that is the question

[AnthonyDuarte]

Hi everyone,

Looking to the future, I'm second guessing whether or not offering pre-orders is the best thing for Eccentric Engineer.

I started offering pre-ordering for a few reasons. It's extremely helpful toward getting products made, and it makes my life much easier when the products are finished. Instead of contacting a few dozen people to let them know the products are ready to ship, (and in many cases handling their orders individually) I can just spend a day getting all the pre-orders shipped. It also makes it very easy to prioritize who gets their orders if there's not enough product to satisfy the interest. First to order gets served first. It also helps smooth out cash flow. Instead of income arriving in periodic bursts it's a bit more spread out, which certainly helps me stay in business.

That said, the number of unhappy customers has gone from 0 to quite a few since starting the pre-order system. Some customers have cancelled their orders out of frustration, understandably. There is a disclaimer when pre-ordering that customers are required to agree to that states the items are not currently in stock, and delivery times are subject to change, but I wonder if paying in advance gives folks a little too much hope that items will be finished sooner rather than later?

It's very important to me to deliver high quality products, but having high quality products doesn't go very far if I start developing a reputation for not being able to deliver those products on time. This a problem I never had before pre-orders.

I've been in business now for a little over 5 years, and I think as EE has established itself there's an impression that I have a team of people helping me produce all these injectors (will likely sell my 1000th injector this year). Just as a reminder, Eccentric Engineer is a one-man operation. I have two CNC machines for production, and two manual machines to support production. I can only do one thing at a time, and as the sole owner and employee of the business, I have a dozen job titles. Design engineer, programmer, machinist, accountant, janitor, marketing, shipping & receiving, customer service, R&D, etc... These products are very hard to make, and there are almost always setbacks that are out of my control, from casting challenges to rush jobs from full sized railroads that interrupt my regular production. I'm doing as much as I can as fast as I can.

Would love to hear your thoughts on this. Would you rather pre-order and wait (I think some customers waited as long as 8 months for their Standard injectors), or only be able to order once products are finished and ready to ship?

[Mountaineer]

As someone who bought two of your injectors, I was happy with the arrangement at the time. (And am very happy with the Moniters!) You were clear in your communications that there had been problems in the castings and you didn’t know when they would be ready. You were accepting payment on completion ie- when ready to ship, which to me is the best system. Doubt there will be any stock you can’t sell as your injectors seem very popular, and people on your waiting list really shouldn’t complain about not getting something they haven’t paid for yet. Paying well in advance of an unknown shipment date just introduces doubt. And may place undesirable pressure on you to produce sooner than feasible. Better in my opinion to avoid. Pricing at time of shipment also allows you to set price to include current cost of production which may be increasing unpredictably with inflation.

Just one guys thoughts who may not understand the intricacies of your business.

Regards,
Mountaineer

[cwood1218]

I like the pre-order because I can pretty much guarantee I'll get one. Plus preorders give you an idea of how many you need to make. Some people forget that this is a hobby and life sometimes gets in the way. As long as I'm updated on the progress of my order I'm content to wait. I just waited for the standard injectors. It was worth the wait.
Corey

[SPSteam2491]

That's a question I have asked myself as well. I agree the benefits of pre-ordering helps significantly from the supplier perspective. I wouldn't pre-order from a company that has not produced parts previously or is new as you have a higher risk of never receiving the part or getting your money back.

From my perspective, you have fulfilled the pre-orders that I have placed and I have been extremely pleased with the results. I have not cared that they took longer than expected because the quality of the products was not comprised. I thought it was helpful that you would post progress status of the parts and shown the failures along the way to better explain the delay.

You will always get those customers who want the part now and will be unhappy on how long it takes. You likely have the data to show how many cancelled or voiced their displeasure from the pre-orders. If the number is significant, maybe review pulling back certain items from pre-order. But if the total percentage is low, I would keep it for future products. Your responsiveness to problems and your continuation of quality is top notch and I have no issues pre-ordering products to keep your business going. Thanks for your hard work and dedication!

[Berkman]

Stick with the preorders, ultimately we want you to keep making awesome products, and the pre order system helps that. Your online store and website are great, with a clean, easy to use check out system accepting various payment sources.

John hits the nail on the head, as long as the supplier has a track record of delivering products, communicating delays etc, I really don't have a problem with it being late- that's just life. it's the "other" kind of suppliers- that you send money, won't answer, won't reply, have a reputation of not delivering that I'd have a problem sending money to etc- but I don't think anyone at all considers you remotely in that latter category.


I’m not sure why people don’t understand that setbacks can happen etc, but if you are worried about that, maybe just more heavily emphasize the TBD delivery date at the time of checkout. No matter what type of business you have, there will always be those you can't please, and I wouldn't let this bother you.

Also you could add in a 1-3 buffer months for estimated delivery timelines. This way, when you deliver when you actually think you will, you’ve beaten their expectation and delivered early, if not you’ll deliver on time.

Communication is nearly everything, and you communicate quite clearly delays etc.

[jcbrock]

Short take, you make great stuff, do whatever you need to do to stay in business. People in this hobby are (or should be) accustomed to waiting, be it for a Ridge boiler, a Rizzoli whistle, or an EE injector. Good stuff comes to those who wait!

I have to admit to a bit of confusion though about expressing interest versus preordering. I know I've expressed interest in the past for example on the 1" Simplex, but looking at your web page it doesn't look like I can pre-order yet. What about going to a deposit model, where you get a chunk up front to hold a place and smooth your cashflow, and also up the commitment level from interested parties?

[Dick_Morris]

You can count me as a happy customer.

As for pre-ordering, it's just something I don't do, even with vendors who give a discount for a pre-order. That's not specific to EE, I'm the same with other live steam suppliers and vendors of tools, etc. That's just how I am.

[pat1027]

With the nature of limited runs I liked the option to pre-order my standard injector. You were up front about delivery and answered when I asked for an update. If the Consolidated safety valves become available for pre-order I'll probably do it again. Perhaps some customers are anxious for their gear once they order and as they wait anxiousness becomes frustration.

The locomotive owners running EE injectors I've talked all had good things to say.

[VGC]

First about communication: Continue communicating clearly, but do not think loudly meaning that you should not need to tell about every little delay and therefor tell delivery dates with at least 50% time reserve. This also can keep people away who do not accept delays and react with damaging your reputation.

About pre-orders: Why not offering the choice if pre-ordering or not? If someone does not want to pay in advance, it is his own decision to risk to possibly never get your products.

[ALCOSTEAM]

The main thing I see as different about EE and Anthony's pre-order set up is it seems he is already well into production of that item and his delivery dates are based on that. Many other pre-order set ups are more to judge interest in a product before any attempt at production is made and all too often people fall victim to a pie in the sky dream someone had in producing something that never happens.
I am just hoping Anthony gets time to work on the Nathan Simplex injectors in 1.6 scale...

[AnthonyDuarte]

Thank you all for the feedback so far.

I should clarify the difference between pre-ordering and expressing interest in an item, a.k.a. "the list".

This list is purely a contact list, and I don't consider the names on that list as orders. I notice a lot of people ask about their order, and when I let them know they haven't placed an order the common response is "I thought I was on the list?". This is a failing on my part to fully explain the purpose of expressing interest.

The list is a spreadsheet with all the different products EE offers, both current and future, and has lists of people under each item who have expressed interest in those items along with their contact info. This is how I gauge whether or not a product is financially viable, and it gives me an idea of how big the production run should be, at least as a minimum. If 25 people are interested in a product (about what I had for the Nathan 4000's), I'll aim to make 40. Typically 10-20% will be scrapped due to casting issues or machining errors, and then I may have 5-10 leftover for latecomers. For the EE injectors I try to at least have twice as many injectors as is needed.

Before pre-orders, I went solely off my list, so when the item became available, I'd contact everyone on the list that their item is now in stock and gave them the first opportunity to buy. This worked fine, but it was a lot of work for me. Contacting everyone individually, sending out paypal invoices, finding a time to call to take their credit card info, waiting a week for a check to arrive... It would take several weeks to take care of everybody's order before offering the items to the general public, which means during that time I'm pretty much unable to be in the shop making more parts.

First about communication: Continue communicating clearly, but do not think loudly meaning that you should not need to tell about every little delay and therefor tell delivery dates with at least 50% time reserve.

I promise there are a lot of difficulties, setbacks and challenges that don't get communicated

About pre-orders: Why not offering the choice if pre-ordering or not? If someone does not want to pay in advance, it is his own decision to risk to possibly never get your products.

As for offering the choice, I believe I've always stated that pre-ordering is 100% optional. It's to offer the customer a guarantee that they'll get their product. Even if I end up not having enough to fill the orders, I will make more to make sure that everyone that has paid gets their items. Customers can still ask to be alerted when the items are in stock, but customers that have pre-ordered will always take priority over customers who are on the list, even if they inquired before the other ordered.

I have to admit to a bit of confusion though about expressing interest versus preordering. I know I've expressed interest in the past for example on the 1" Simplex, but looking at your web page it doesn't look like I can pre-order yet. What about going to a deposit model, where you get a chunk up front to hold a place and smooth your cashflow, and also up the commitment level from interested parties?

Hopefully the earlier explanation helped clear up the difference on how I see expressions of interests vs. pre-orders. I definitely don't want to get into a habit of accepting pre-orders before an item is actively in production. As ALCOSTEAM pointed out, I don't open up pre-orders until the item is actually being made. If I start taking pre-orders or deposits for items that aren't in production or that haven't even been fully prototyped yet, then I really start playing with fire. And not in a fun water-boiling way.

The only instance that I could see taking deposits before production is the 1.6" westinghouse compressor castings. The reason they still haven't come to light is the cost of the castings. A lot of people are interested, and if I make enough to cover everyone that's interested plus extra, it's multiple 10's of thousands of dollars just for castings, and in order to offer them at a fair market price, I won't make very much on them, yet people still gasp at the price.

Please keep your thoughts and suggestions coming!

[Bill Shields]

If nothing else, your preorder technique continues to tell existing and prospective customers that you are active.

Too many cases of vendors folding up shop leaving the group chasing Casper.

Best thing you can do is communicate and what you are doing clearly does that.

IIABDFI