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Product Pre-Sale

 

This form of community capital focuses on pre-selling product in order to raise the capital to improve a business. Presales generally should not be used for a start-up; the business ought to be up and running before the pre-sale initiative is launched. The owner may offer, for example, $100 worth of product or service for $90. The customer pays the owner $90, and can then redeem the $100 value over time.

The benefit to the owner is collecting capital up-front and repaying it through product “sales” or distribution at a later date. The business generally limits the amount of product distributed at any one time in order to preserve cash flow from sales as the presales are being delivered. The benefit to the customer is receiving bonus product.