Here’s an idea. Instead of having artificial scarcity, they could have actual scarcity. Don’t manufacture 10 000 super fancy shirts. Make only 500. They will run out sooner than anyone wants, you’ll still make absurd profits and customers are left wanting more. When the next season rolls around, you make 500 of the same shirt, but in a different color. Charge 2x more than last time, but you’ll be able to sell them anyway now that people know how fast they disappeared last time.
Side note: Making stuff to feed the vanity of millionaires is revolting, but at least this way it doesn’t have to be so wasteful.
But see, if I order 10,000 I get the bulk price of $5 each. If I only order 500 then they will cost the seller $40 each.
Of course this effect can be minimized with annual volume commitments where a miss means that you simply pay your supplier the difference.
The reality is that the normal situation will not be a difference as stark as this example, but some form of it exists.
Yeah, I guess we need a third category then. What they’re currently doing involves overproduction at first, but that is later turned into artificial scarcity by destroying the products. How’s “extra wasteful, diabolical scarcity” for a term?
Here’s an idea. Instead of having artificial scarcity, they could have actual scarcity. Don’t manufacture 10 000 super fancy shirts. Make only 500. They will run out sooner than anyone wants, you’ll still make absurd profits and customers are left wanting more. When the next season rolls around, you make 500 of the same shirt, but in a different color. Charge 2x more than last time, but you’ll be able to sell them anyway now that people know how fast they disappeared last time.
Side note: Making stuff to feed the vanity of millionaires is revolting, but at least this way it doesn’t have to be so wasteful.
But see, if I order 10,000 I get the bulk price of $5 each. If I only order 500 then they will cost the seller $40 each. Of course this effect can be minimized with annual volume commitments where a miss means that you simply pay your supplier the difference.
The reality is that the normal situation will not be a difference as stark as this example, but some form of it exists.
And the decision is always guided by greed and complete disregard for sustainability.
Isn’t that exactly what artificial scarcity is? Limited stock for the sake of limiting it, not due to actual supply/demand.
Yeah, I guess we need a third category then. What they’re currently doing involves overproduction at first, but that is later turned into artificial scarcity by destroying the products. How’s “extra wasteful, diabolical scarcity” for a term?