March 17, 2005
the tao of undersupply
The t-shirt thing is coming together nicely. Planning on launching circa first week in April.
Talking to my manufacturer– a very smart fellow– about business issues in general.
We both concur that the biggest problem in the Western world is oversupply.
For every mid-level managing job opening up, there’s scores of people willing and able. For every company needing to hire an ad agency or design firm, there’s dozens out there, willing and able. For every person wanting to buy a new car, there’s tons of car makers and dealers out there. I could go on and on.
I could also go on about how many good people I know are caught in oversupplied markets, and how every day they wake up, feeling chilled to the bone with dread and unease. Advertising and media folk are classic examples.
So maybe the thing is to is get into “The Tao of Undersupply”.
If only 100 people want to buy your widgets, then just make 90 widgets. If only 1000, make 900. If only 10 million, make 9 million. It isn’t rocket science, but it takes discipline.
It also requires you to stop making the same stuff as other people. Doing that requires originality and invention.
Like it said in “How To Be Creative”, don’t try to stand out from the crowd, avoid crowds altogether. Again, it isn’t rocket science.
That why all the t-shirts will be limited edition. Actually, I think everything I make from now on will be limited edition in one way or another.
What about your stuff?
Some 25 years back I went into the publishing business — with almost zero initial capital. So what to do? Instead of having tons of books printed which would only have blown up our inventory, we offered subscriptions to limited editions. When orders were in and the publication deadline was due, we only had to produce so and so many copies (just slightly more than subscribed to service fresh orders).
This not only saved us tons of capital, it was actually a whole lot more lucrative, too: no interest on inventory, lower administrative overhead, etc. We actually made a lot more profit that way because of course those limited editions were quite pricey (about 4 times the regular price of books in this particular market). And yes, this was stuff not available anywhere else and quite attractive to our target group.
After a while, we had lots of subscribers who’d blindly order almost anything whenever we announced it — obviously collectors, maybe some people speculating on appreciation of product value due to its scarcity. Plus, perhaps, the greed factor at play to some extent …
The most interesting part was that this approach actually tends to *create* a market rather than simply servicing one. The slogan “Invent your own market” was very much to the point here.
Yes Ralph, I think we’re both reading from the same page.
And that’s a very good point– a customer base motivated primarily by greed certainly shifts product faster than just about anything.
The Tao of Undersupply
Hugh says maybe it’s smart to differentiate yourself by undersupplying.
Good thought Hugh.
Reminds me of recent thoughts about billboards (there
Love this post … but I am struggling to apply it to situations where you don’t make ‘widgets.’
If I am an ad agency, how do I make less of ‘brand X’ or whatever it is that I offer?
If I am an individual with a certain set of skills and abilities, how do I limit the supply and therefore increase the demand?
John K, I suppose the answer would be to get enough clients where you have to turn work away on a regular basis.
There Was a Googlefight. I Lost.
Ouch. Not really even a fight (damn you Hugh). This is totally googly dude. Thanks to Aaron over at Confessions of a Brand Evangelist for this fun little nugget.
I did something similar with my photographs a few years back. With a small market, I chose an even smaller number of products, limited editions with the minimum run of one of them being just 7. It worked for as long as I was doing it.
But I got bored selling and lost interest in making the images in the first place. I stopped selling and got back my love of taking photographs. I’m ‘richer’ now!
Your post also put me in mind of Hucklebery Fin, who managed to get Tom Sawyer to finish his work on a fence by creating an irresistably exclusive opportunity.
I am here for the first time ever. I did not read the article. I just wanted to tell you that you have one reader more here. See the next comments for what I like especially at gapingvoid!
What about our company? We are selling environmentally friendly biodegradable packing materials. I don’t think we can say to a customer who wants to buy 1 million that we only can produce or deliver only 900.000. If we do that, we are out of business, and we want to stay in.
And — regrettably — we are not big enough to say that we only want 9 (not 10) customers.
Anyway — have a nice weekend, you gapingvoids.
Finding Things del.icio.us Style
One of the great things about del.icio.us is the places it helps you stumble upon. Not only is it a great place to store your own links, but you can see the community that is linking the same things that you are. Then you start stumbling upon interest…
Beware of Oversupply
Another great post on gapingvoid: 100 Suits.Over the last couple of days I’ve been thinking about this one idea I’ve had for English Cut. The idea is basically limiting our output to 100 suits a year. That’s roughly 2 suits