Artificial scarcity

Ironically I just read a report on the consequences of renewed war in Korea. South Korea is the main, and often sole source for many digital components and completed products. The inevitable destruction would cripple supply for years with massive price increases for the reduced production. A poster on B&B was worried about geopolitics interfering with Russian blade supplies. Now we may see future forums in the form of chain letters via fountain pen and stationary. Freddy and I are so prepared for that. Let's see ' James has had weeks to reply to my letter and I bet he hasn't even broken the wax seal yet.'

I think that some folks play the artificial scarcity game and I choose not to play. Especially the situations where it goes on sale at a certain time and is gone five minutes.

The companies I want to work with handle this professionally. B&M is a good example. They have a schedule of when they'll release and they make enough so you can get if desired. Another example of handling it well is WSP. I got an email that he was making an old scent and was making 100 tins and to place your order if you want some.

I wasn't involved with the Wolfman razor situation. As best I gathered, he tried to do the right thing. Also, I would think it took several hours to make each razor and he had a day job. I have less patience with soap because it simply isn't that hard to make once you have your recipe worked out.

Do we then agree on the definition? Artificial scarcity - intentionally making less of a product than able with the goal of increasing demand and thereby profit.
To the best of my knowledge that would eliminate folks like wolfman, bufflehead, etc from this category.

Sent from my SM-N920P using Tapatalk

What is a Wolfman exactly?

I kid. There is value in doing things the old way, the olschool way. People are so eager to look to the future, they never appreciate from whence they came. That is why us, as a community are important.

I do have one sticking point with the idea of artificial scarcity that I really want the readers to understand. (keep in mind this is from the viewpoint of a vintage razor user, a brush is just a tool, and dedicated soap fiend) There is a definite difference between artificial scarcity, Limited edition, and a limited run of a certain item. Almost every aspect of our hobby has many of these. Soap, razor, and brush. A maker may have in mind a limited edition/run of an item or soap. This could be because they contract for X number of one ingredient, part, a specific task. The maker may be limiting these because of certain supply limitations or could be the max capacity from a sole supplier. Thus making that product limited.

Sometimes a maker knows this ahead of time and announces this. Hype and salesmanship may generate interest.

Sometimes certain product just dont sell well and are seasonal. Anybody here buy a pumpkin spice soap in August? Arctique in December? When a product doesnt sell well, it behooves the maker to pull it from the market. Exhibit A---Roam. Once its gone, people want it. Seen any QCS soap come up for sale on the BST since they closed their doors?

Now I can see a maker who thinks their product is gold, hypes it up, gets a few positive reviews from "testers" then puts out a limited number of items where the maker can demand top dollar. But I dont seem to have that problem with with Ball Techs and SuperSpeeds.

I will agree there is such a thing as artificial scarcity. You cant not acknowledge this if you spend longer than ten minutes in this hobby. But I also see it is very easy to to confuse artificial scarcity with limited run/edition items that you cant buy when the mood strikes, and when you find it, its double the price than it was originally sold for.

Do we then agree on the definition? Artificial scarcity - intentionally making less of a product than able with the goal of increasing demand and thereby profit.
To the best of my knowledge that would eliminate folks like wolfman, bufflehead, etc from this category.

Sent from my SM-N920P using Tapatalk

I was just looking at the thread on 'communication with wolfman'. Based on some comments there, it sounds like things have changed as there are negative comments from those who follow Wolfman more closely than I.

Bufflehead is a little too hard to get in my opinion. Soap isn't that hard to make, even with the artisan having a day job and family.

There should be a defined difference between intentional scarcity and artificial scarcity. True enough that the end result is the same in an inflated value for a limited product, but the manner and intent is different.

To me, Wolfman would be intentional scarcity, not because he wants to create demand and value...he has a great product that generates its own demand. He does it intentionally because that is the level of involvement he chooses. He keeps his operation within his chosen scope. There is nothing artificial about the value or scarcity, but it is intentional and by choice.

Artificial scarcity would be watching a company like P&G stop production on DE blades to create a shortage and justify higher prices to eliminate profit loss against cartridges. They have the means and ability to supply far more than the demand yet they choose not to in order to generate false desire for abpresumably disappearing commodity.

These are 2 totally different scenarios with the same result. I can't think of any artisans that generate an artificial scarcity, but then I am not privy to their practices or marketing so it would be unfair of me to accuse even if I suspected...

Just my humble opinion...


Sent from my iPhone using Tapatalk

There should be a defined difference between intentional scarcity and artificial scarcity. True enough that the end result is the same in an inflated value for a limited product, but the manner and intent is different.

To me, Wolfman would be intentional scarcity, not because he wants to create demand and value...he has a great product that generates its own demand. He does it intentionally because that is the level of involvement he chooses. He keeps his operation within his chosen scope. There is nothing artificial about the value or scarcity,  but it is intentional and by choice.

Artificial scarcity would be watching a company like P&G stop production on DE blades to create a shortage and justify higher prices to eliminate profit loss against cartridges. They have the means and ability to supply far more than the demand yet they choose not to in order to generate false desire for abpresumably disappearing commodity.

These are 2 totally different scenarios with the same result. I can't think of any artisans that generate an artificial scarcity, but then I am not privy to their practices or marketing so it would be unfair of me to accuse even if I suspected...

Just my humble opinion...


Sent from my iPhone using Tapatalk

BadDad I like your analysis, however, in the case of Wolfman razors I would quibble and say that he's an example of unintended scarcity. Certainly his level of involvement is his intentional choice but he has no control over the demand side of his specific supply/demand equation. If there was only demand for a dozen razors a year and he produced two dozen then there'd be a surplus but as luck would have it (for him) there is an excess of demand over supply and therefor a scarcity of razors. He doesn't intend there to be a scarcity, its just a consequence of his intentional business model. I know we're splitting hairs, but heck, thats what hairs are for!
Cheers,
Marko

As far as I can tell, none of the artisans who are dealing with huge supply/demand imbalances have responded to excess demand by driving up prices significantly.

This indicates they are not "artificially" limiting supply -- the only reason to do so would be to maximize economic value. As for "artificial scarcity" I think its a bit of a misnomer. It implies that the manufacturer COULD produce more of a given product and sell it at a lower price if they wanted. For many of these artisans that's not the case. James Dufour recently introduced the Guerrilla because he had under-utilized machining equipment that would sit idle while he was doing fine polishing and finishing work on Wolfmans. So he designed a razor that could be produced on the machines and did not require the same finishing, and priced it accordingly. This seems to be a textbook case of a successful business responding to market demand -- product line extension.

Seems to me that if James were artificially restricting his supply, he'd charge $800 for a Wolfman and limit the production to what he can personally produce per year. Instead he has done the opposite.

The only artisan, and i'm using that term very loosely, who i feel does this is Joe from Italian Barber. With a razor like the baby smooth, with its fluctuating price and supply confuse me. Why one batch is $90 and the next batch is $40 but they are the same materials and same limited supply doesn't make sense.

I think with wolfman the amount of hand finishing required for his wolfman razors takes a lot of man hours and he doesn't trust others to do the work for him so he does it himself thus limiting the supply. The UAG is a less finished more readily available alternative and even then demand is outpacing supply but perhaps that will change in a month or two once people realize they aren't going anywhere.

With bufflehead the guy has a job and a family that are way more important to him than making soap. It's a hobby and he likes to share it with others. The fairest way to do that is to release it and give everyone equal access in their attempts to get a tub. No favorites, no special deals, etc. I think while making soap might be easy it still takes time and creating and blending fragrances takes even more time. People are comparing him to B&M and Wills full time job is making soap so it's like comparing apples to oranges. God forbid the guy behind bufflehead wants to do anything else with his free time when he's not working or taking care of a kid like go to a bar for a drink or something as opposed to using that time to make soap.

Thanks for the tip on increasing customer demand. Let me make sure I understand the business model for this. Instead of making enough soap to meet demand, one should reduce production and sell less than the market demands. That will increase demand for the products. Then in a nefarious and self-serving fashion, instead of taking advantage of that demand by increasing production or raising prices, one simply continues to sell far less than possible (on purpose) at the same price, so that demand will remain high. Hmmm. Can you explain how a company profits from that?