Understanding Fundraising Programs: Pre-Sale vs. Direct Sale

Whether you’re a seasoned pro, or a newbie fundraiser, you may be unsure of exactly what pre-sale and direct sale fundraisers are.  Here is your official guide to help you understand the lingo.

Many fundraising companies use the terms “pre-sale” and “direct sale” to define different fundraising programs.  But what do these terms mean?  What types of programs fall under each category?  Which is best for you?  Are there other options available?  Keep reading to get a full picture of pre-sale and direct sale fundraising programs.

Definitions

Pre-Sale:  With pre-sale programs, you typically have catalogs featuring the products you’re selling, and customers can place orders.  Money is collected from customers when they order, and then you place one large order with your fundraising company.  When all the products arrive, you distribute and deliver them to customers.

Profit is usually a percentage of your total sales.  Let’s say, for example, you’re running a pre-sale fundraiser with cookie dough, your profit is 40% of the total sales, and you have sold $1,000 of cookie dough.  40% of $1,000 is $400, so that’s the amount you would keep.  The remainder is sent to the fundraising company when you place your final order as payment for products and shipping.

Note: Shipping is often an additional cost depending on your total sales.  Be sure to ask your fundraising company about shipping costs before starting a pre-sale fundraiser.

Direct Sale:  This is when you sell a product directly to raise funds.  That means you buy a large quantity of something like candy bars or lollipops (when you purchase large, bulk quantities, you usually pay a discounted price), and then resell them at a higher price than what you paid.

With direct sale programs, your profit is calculated by subtracting your cost from the total amount raised.  For example, if you purchase fundraising candy bars at $1 each, and sell them for $2 each, your profit on every sale is $1, or 50%.

Types of Programs

Here are some of the more popular pre-sale and direct sale fundraising programs:

Pre-Sale:  Cookie Dough, Gift Catalogs

Direct Sale:  Candy bars, lollipops, wristbands

What’s Best for You?

Every group is different with different fundraising needs and resources, so certain programs will be better suited to certain groups.

A pre-sale fundraiser is best if your group:

• Is medium to large (25+ members).
  –  Is enough volunteers or adult leaders to help with collection of orders, and distribution of products.
  –  Has several months to organize and run the fundraiser (you need to have your product catalogs delivered, run the fundraiser for a about 2 weeks, and allow for delivery time of products).

A direct sale fundraiser is best if your group:

–  Is small to large (direct sale is great for almost any group size).
–  Has only a few weeks before the fundraising goal needs to be reached.
–  Has a budget to cover the upfront costs of fundraising products.

Of course, these are only suggestions, and it’s best to discuss your group’s specific needs with a professional.  Most fundraising companies provide free consultations, so it’s a good idea to call around for help and advice.

Other Options

The wonderful world of fundraising programs doesn’t end with pre-sale and direct sale!  There are a variety of options for you to choose from.  There are donation fundraisers with fundraising cards like Scratchcards, online fundraisers like eFundraising, and then there are fundraising events like charity dinners, and raffles.

Do you have a great tip to share, or need advice choosing the perfect program?  Post a reply!