Offering Shopify deposit payments
1. Why should you offer deposits
1.1 What are deposit-based pre-orders
Offering Shopify deposit payments allow the store to charge a portion of the sale up-front, basically customers are required to pay a portion of the cost of the goods/services to secure the pre-order.
1.2 Benefits of deposit based pre-orders
- Increases the window of time that you can acquire orders.
- Start receiving cash-flow before the product is available.
- Customers have a stronger commitment to the pre-order as they have paid a deposit.
1.3 Deposits in the real world
An example of Shopify deposit payments from the real world is the Holochain Foundation. They harnessed the power of deposits in their rollout of a new decentralised Web 3 platform. Charging an upfront amount for the HoloPort hardware from their audience ahead of the final shipping date. This meant they were in complete control of when to charge the final amount and ship out the HoloPorts. Flexibility like this can come in extra handy with more ambitious product launches like this one.
2. Adding deposits manually
It is possible to start collecting pre-orders without installing any apps or paying a developer to modify your theme, through a very bare-bones approach. This would not be our recommended approach due to a few reasons, but the steps are listed below if you want to go in this direction:
2.2 Pros and Cons of manual DepositsPros:
- Free of charge.
- Stays within Shopify’s admin.
- Bad customer experience due to lack of communication touch points.
- Bad customer experience due to email instructions at payment step as opposed to one click link.
- A lot of manual work in Shopify, meaning staff expense and possible room for error.
- Can only safely support purchases of 1 with a deposit (due to discount code).
- No dedicated analytics on who’s paid a deposit and who’s paid in full.
- No tagging or deposit specific segmenting in Shopify.
2.3 Steps for setting up a manual deposit listing
- Create a new Shopify product that will be your ‘deposit’. For example, call it ‘A test product – deposit’ (in the description explain your deposit process and terms).
- Make sure the product isn’t marked as a ‘physical product’ in Shopify’s product admin. This is so shipping isn’t charged by default.
- Collect payments and orders of this deposit product.
- Now list your main product in Shopify with its full price.
- When you’re ready to charge customers the outstanding amount. Create a Shopify deposit code for the price of your deposit product, it’s important to make it only applicable to the main product that you’ll be charging for. Also, look at limiting the usage to 1 use per product per customer, so it’s not abused.
- Now go into the ‘orders’ section of Shopify and filter by the deposit product. You can now click on each of these orders, copy the customer’s name and email into a third-party email provider, along with the discount code from step 5 and a link to your main product.
3. Adding deposits via PreProduct
PreProduct has an automated deposit system which works through your existing Shopify checkout.
3.2 Pros and Cons of running deposits through PreProductPros:
- Ensure customers are committed to their pre-orders.
- Receive some money paid upfront, to assist with cash flow.
- Email campaigns to keep customers in the loop and engaged throughout the pre-order process.
- Great customer experience with email communication and one click payment links.
- More automated process so less manual work and room for error.
- Products on pre-order will automatically gain the Shopify tag ‘pre-order’ and deposit products will gain the tag ‘deposit’ to help with filtering in your Shopify admin.
- A user interface to choose which of your products/variants will be on pre-order and when.
- A designated dashboard for your pre-orders, without regular orders being mixed in and analytics to show number of orders received, and number who have paid.
- Third-party customer support, both technical and strategic.
- PreProduct is a paid app.
- Has to work within the e-commerce platforms constraints.
3.3 Steps for setting up a PreProduct deposit listing
We have a dedicated doc for deposit listings here.Dashboard (PreProduct app interface):
- Navigate to the ‘New Listing’ screen in PreProduct and select/search-for the Shopify product you would like to list.
- On the next screeen, scroll to the bottom of the screen and click ‘Advanced’, then check the ‘require a deposit’ box.
- Now enter the amount which customers will have to pay upfront per item and click ‘create listing’. The amount entered defaults to your store’s primary currency.
- The PreProduct pre-order front-end will explain that a deposit is required, how much it is and then a incentive phrase afterwards.
- The wording can all be edited via the ‘customise wording’ screen in PreProduct. Just make sure to select ‘deposit based pre-order’ before editing.
- Pre-orders will populate in the PreProduct dashboards, allowing you to view and interact with them. This includes sending out update emails, as well as eventually sending out payment link emails. (links will automatically have a discount code applied to compensate for the deposit paid)
Offering Shopify deposit payments gives many benefits to Shopify businesses when selling upcoming or out of stock products. Whether it’s increasing cash flow and gross sales or improving forecasting ablility. Using PreProduct to offer deposit based pre-orders can help super-charge the above and improve the customer experience, all whilst saving you time in the process.