What is a Presale?
A presale is when you buy something before it’s available for purchase. One of the best examples is Community Supported Agriculture (CSA) which, in the broad sense, can mean shopping at local farmer’s markets or farm stands. Today it has become the term used for pre-buying a share of the harvest a farm will produce in one season. When you pre-buy a farm share you are supporting the costs, sharing the risks and, in effect, underwriting the harvest for that season. It’s also a great way to get to know where your food comes from and engage with your community.
The Northeast Organic Farming Association of Vermont (NOFA) has this great interactive map of CSA’s in Vermont.
A store or restaurant may also use a pre-sale to help fund a renovation or new equipment. Community members pre-buy goods or services giving the business the capital it needs for the project. Let’s take a closer look: a store needs to raise $50,000 for a renovation and sets a presale minimum of $1,000. You write a check for $1000, receive $1100 in store credit (you're earning 10%) and can, for example, use 10% of that amount shopping at the store. Anything you want to spend above that 10%, or $110 for the first month, you will pay out of pocket.
Example: $1,000 presale gives you $1100 to spend, of which you may spend 10% per month
- Month One - you can spend 10% of $1100 or $110
- Month two - you can spend 10% of $990 or $99
- Month three - you can spend 10% of $891 or $89.10
...and so on until you've spent your full $1100.
Anything more you spend over that 10% comes out of your pocket and adds to the cash flow for the business. This is an effective way for businesses to get community support while engaging their clientele.
We’ll let you know about any presales on this page!