Abstract: Advance selling is the sale of a product before it is released. This strategy can help the retailer to better forecast the demand through reducing the uncertainty of demand. In this paper, the conditions that a retailer can implement advance selling strategy are examined in the case of uncertain market size. Based on the behavior properties of strategic consumers, the newsvendor model is established to take the comparative study between the strategies of advance selling and no advance selling, and the optimal advance price and order quantity are obtained through establishing the profit functions of the two sales strategies. It is fourd that when the consumers' expected valuation of the product is high or when the unit order cost is low, advance selling may bring more profit to the retailer. Otherwise, the retailer may be inclined to prefer no advance selling strategy. When the retailer applies advance selling strategy, the advance price is not always smaller than spot price. In order to avoid the risk of stock-out in spot period, under some certain situations, the consumers are likely to pay a higher price to buy in advance period. Under this situation, the advance price may be higher than the spot price.

Key words: advance selling, uncertainty, newsvendor model, strategic consumer