Why New Technology Always Seems To Sell Out

Posted: Sep 25 2017, 10:03am CDT | by , in News | Technology News

Why New Technology Always Seems to Sell Out
Why New Technology Always Seems to Sell Out

5 Reasons Your Latest Wanted Gadget Will Probably Sell Out

If you’re reading this article, you’ve probably spent at least a few hours in line for some “latest and greatest” gadget. If you’re unlucky, you might have waited for a few hours or showed up late, only to find that the device you were lusting after is sold out.

It’s a common thread in the tech world, from video games to smartphones. Already, pre-sales for the iPhone 8 are selling out, which marks the latest in Apple’s trend, and video game consumers are expecting that the SNES Classic system, like its NES Classic predecessor, will also be in severely limited quantities.

It seems like companies should have a good understanding of how much demand there is for their new tech products, and have high-tech inventory management systems in place to satisfy that demand. Yet, it seems like new tech is always poised to sell out. Why is this the case?

Most Likely Motivations

Obviously, the situation varies from company to company, and from product to product, but these are some of the most likely reasons why all your most anticipated new gadgets seem to sell out:

1. Legitimate inability to meet demand.

Some companies have a legitimate inability to keep up with demand. They don’t have the manufacturing power or speed necessary to produce as many items as people would like. For example, despite their near-ubiquity, smartphones are actually quite difficult to manufacture, and manufacturing shortages have been blamed for these sellouts in the past. Still, with multi-billion dollar tech companies making projections and developing products months in advance of a launch, it seems like at least some of this inability may be exaggerated.

2. Scarcity value.

It may also be that companies are intentionally withholding some products, or are stifling production slightly, in order to increase scarcity value. The laws of supply and demand suggest that limited quantities of a good will increase the price of that good; accordingly, if a new tech gadget is hard to find or get your hands on, it could make customers more willing to pay high prices, or drive up secondary market prices that lead customers to firsthand retail stores. Additionally, when people know a device is in limited quantities, they tend to want it more—simply because not everyone has it.

3. Buzz generation.

When a groundbreaking new device isn’t available for every consumer who wants one, it has a tendency to make headlines. Regardless of whether the reports are criticisms of the company’s inability to meet demand or a simple list of facts related to the event, these news stories will generate buzz, which will bring more attention to the brand and the product. It’s hard to buy that kind of publicity; instead, you let the word-of-mouth build it for you.

4. Convincing fence-sitters.

If you’re like most consumers, when a new piece of technology comes out, you’ll probably be on the fence about whether or not to buy it. Sure, it has lots of interesting new features and would satisfy your ever-growing tech lust, but is it really worth the extra money? If you realize that new products are in short supply, and you won’t have many options in getting one, it may be the final push you need to place that pre-order.

5. Loyalty rewards.

Limiting the quantities of their flagship products may also be a way to reward their most loyal customers. Only the most brand-obsessed customers, who represent the most buying power, will be willing to pay extra to get a product early, or wait in line for hours for the latest release. When rewarding customers willing to do these things, customers feel not only rewarded, but part of an exclusive club; it gives them a shared identity with the brand, and encourages them to engage even more with the brand in the future.

How to Respond

Knowing that at least part of the “selling out” phenomenon is planned intentionally as a way to increase sales and hype may convince you not to stand in line to buy the latest product, or dissuade you from placing that pre-order. However, it’s unlikely that your actions will change anything, and ultimately, you’ll be missing out on the tech gadgets you want the most. If anything, this should give you motivation to get in line earlier or pre-order sooner; you have a lot of competition to beat, and a limited inventory to work with.

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The Author

<a href="/latest_stories/all/all/68" rel="author">Larry Alton</a>
Larry is an independent business consultant specializing in tech, social media trends, business, and entrepreneurship. Follow him on Twitter and LinkedIn.




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