$5M+ Monthly Sales From Building Demand Through Scarcity

Date

Nugget Comfort is still on a 2 week backorder delay (this has improved from their 2-4 weeks delay earlier this year). I want to say despite this delay; however, I actually think it may be because of this delay, their sales continue to increase.

Nugget Comfort generated just over $4M in sales in June, which grew to $4.7m in July, and $5.5M in August. And still, I see no Facebook Ads or Google Ads for them. 

As I spoke about in other articles, Nugget Comfort has built up demand for its product. The fact that you cannot just go get their product makes you want it more. Back in 2020, they had a lottery for an opportunity to purchase one of their 60,000 units available. Over 200,000 people signed up for this lottery. For all of 2021, their products have been on backorder for 2-4 weeks.

My bet is if there were no backorder for their products, they would see an initial boost in sales, but over time, interest would die down. I do not know if they are intentionally keeping their items on backorder but it is a fascinating mindset the consumer is put in when a company is showing that demand is so high for their product. 

Barriers To Purchase

This is the opposite playbook from Amazon. Amazon wants to remove every barrier possible from the consumer making a purchase. But what if you do put a few barriers up for a consumer to get your product? Such as they have to be invited for the opportunity to purchase it? Or you must pay an initiation fee to gain access? Or you must wait a certain time period before you can get the product?

It is risky, as consumers may just go look for other similar products that do not have these barriers. But if you have a product that your consumer can not easily replace with a competitor, putting up artificial barriers can boost interest and long term sales for your product/brand (think of those long lines to get the new Apple iPhone, or when Nike drops a new shoe).

Instagram

Since the end of July, Nugget Comfort has grown their Instagram following by 2% to 427K followers. In July, Nugget posted 14 times. In August, they increased that to 21 times.

In July, Nugget was tagged 725 times. In August, they were tagged 1,034 times. It is too early to see if there is a correlation between their Instagram growth (and tags) and their sales. However, this is a trend I will continue to follow.

Email

In August, Nugget sent me 5 emails (they sent me 4 in July):

August 6th (11:11am): Argh, mateys! Tis time for a pirate Supernow-Nugget class

August 12th (10:01am): The More You Nugget

August 18th (2:45pm): Double the Double-Brushed Fun

August 19th (11:04am): Today is the day!

August 25th (12:19PM): Sandcastle is Back!

(click on the link to see the email)

FOMO

I stated it before in previous articles, but Nugget uses fear of missing out (Fomo) to drive sales. They often are releasing new colors, bringing back old colors, and retiring current colors. They give you limited opportunity to purchase the items.

On August 18th, they sent out an email alerting their customer base that they would be releasing two new colors the next day. On August 19th, just before the colors went live, they sent out another email saying the products would be available starting at Noon eastern. Highlighted right below that was a disclaimer: “Due to limited quantities…”.

Nugget has stayed consistent and trained their customer base that they do sell out, that they do retire colors. They do not just cry wolf. So when they say “limited quantities”, their customer base knows they must take action now or they truly may not have the ability to purchase that item if they wait. 

As you can see with their email on August 25th, they brought back the Sandcastle color (a color they previously had retired). This is a pattern that I see Nugget doing. Run a color for a certain period of time, retire that color, and then 6-12 months later, they bring that color back. 

Building Demand through scarcity

Nugget is a fascinating case study on building demand through scarcity. It is easy to get sucked into the trap of discounting products to generate more sales. However, this is a cheap way to generate sales and the tactic usually ends with the consumer always expecting discounts from you. So how can you generate sales without discounting? Generate demand through scarcity. 

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