diff --git a/lib/solitude/api.py b/lib/solitude/api.py
index 7ffc416f4..cb7517675 100644
--- a/lib/solitude/api.py
+++ b/lib/solitude/api.py
@@ -126,14 +126,8 @@ def configure_product_for_billing(self, webpay_trans_id,
             seller_product__external_id=product_id
         )
         if res['meta']['total_count'] == 0:
-            # TODO(Kumar) create products on the fly. bug 820164
-            raise NotImplementedError(
-                'this product does not exist and must be created')
-
-            # Create the product on the fly.
-            # This case exists for in-app purchases where the
-            # seller is selling a new item for the first time.
-
+            bango_product_uri = self.create_product(product_id,
+                    product_name, currency, amount, res['objects'][0])
         else:
             bango_product_uri = res['objects'][0]['resource_uri']
             log.info('transaction %s: bango product: %s'
@@ -150,6 +144,39 @@ def configure_product_for_billing(self, webpay_trans_id,
                  % (webpay_trans_id, bill_id))
         return bill_id
 
+    def create_product(self, external_id, product_name, currency, amount, seller):
+        """
+        Creates a product and a Bango ID on the fly in solitude.
+        """
+        if not seller['bango']:
+            raise ValueError('No bango account set up for %s' %
+                             seller['resource_pk'])
+
+        product = self.slumber.generic.product.post({
+            'external_id': external_id,
+            'seller': seller['bango']['seller']
+        })
+        bango = self.slumber.bango.product.post({
+            'seller_bango': seller['bango']['resource_uri'],
+            'seller_product': product['resource_uri'],
+            'name': product_name,
+            'categoryId': 1,
+            'secret': 'n'  # This is likely going to be removed.
+        })
+        self.slumber.bango.premium.post({
+            'price': amount,
+            'currencyIso': currency,
+            'seller_product_bango': bango['resource_uri']
+        })
+
+        self.slumber.bango.rating.post({
+            'rating': 'UNIVERSAL',
+            'ratingScheme': 'GLOBAL',
+            'seller_product_bango': bango['resource_uri']
+        })
+        return bango['resource_uri']
+
+
 
 if getattr(settings, 'SOLITUDE_URL', False):
     client = SolitudeAPI(settings.SOLITUDE_URL)
diff --git a/lib/solitude/tests.py b/lib/solitude/tests.py
index aa4b0f5fc..7c986a723 100644
--- a/lib/solitude/tests.py
+++ b/lib/solitude/tests.py
@@ -1,12 +1,14 @@
 from django.conf import settings
 from django.test import TestCase
 
+import mock
 from nose.exc import SkipTest
 from nose.tools import eq_
 
 from lib.solitude.api import client
 from lib.solitude.errors import ERROR_STRINGS
 
+
 class SolitudeAPITest(TestCase):
 
     def setUp(self):
@@ -79,3 +81,24 @@ def test_verify_good_pin(self):
 
     def test_verify_alpha_pin(self):
         assert not client.verify_pin(self.uuid, 'lame')
+
+
+class CreateBangoTest(TestCase):
+    uuid = 'some:pin'
+
+    def test_create_no_bango(self):
+        with self.assertRaises(ValueError):
+            client.create_product('ext:id', None, None, None,
+                                  {'bango': None, 'resource_pk': 'foo'})
+
+    @mock.patch('lib.solitude.api.client.slumber')
+    def test_create_bango(self, slumber):
+        # Temporary mocking. Remove when this is mocked properly.
+        slumber.bango.generic.post.return_value = {'product': 'some:uri'}
+        slumber.bango.product.post.return_value = {'resource_uri': 'some:uri'}
+        assert client.create_product('ext:id', 'product:name', 'CAD', 1,
+                {'bango': {'seller': 's', 'resource_uri': 'r'},
+                'resource_pk': 'foo'})
+        assert slumber.generic.product.post.called
+        assert slumber.bango.rating.post.called
+        assert slumber.bango.premium.post.called