604: (Solo) What Labubu and Apple Can Teach You About Scarcity Marketing

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0:39Just head to omnisend.com forward slash founder without the E to get started. All right, now let's jump back into the show. Hey guys, Nathan here. Welcome back to another episode of the Founder to Founder podcast. These are small bite-sized episodes where I share everything I'm learning as I build Founder for the past 10 plus years and speaking and learning and networking, connecting with some of the greatest entrepreneurs of our generation. So today I wanna talk to you guys about the power of scarcity in your marketing and also in your product. And I wanna give you some examples of companies, why they are doing so incredibly well and give you some takeaways on how you can build this into your product and into your marketing to really help you boost sales, boost the value and the perception of your product.

1:31Hear the stories, learn the proven methods, and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan.

1:44Here's the thing, right? Scarcity isn't new when it comes to using in your marketing. You look at Apple. They have people camping overnight to get the new iPhone. They strategically limit the amount of iPhones, new iPhones that they put out. You look at Labubu. That's a company that I'm very, very interested in. Like how did this little doll become like this worldwide sensation and everyone is trying to get a Labubu? You know, the fifth watches created by my really good friend, Greta Van Riel. She was selling that product on the fifth of every month. And nothing proves this more than just like totally different products in totally different markets, speaking to totally different segments, how you can use this as a strategy to increase the perceived value of your product and get people to want to buy now.

2:34And also to build a cult-like following. And so the reason I want to talk to you guys about this today was it's been really interesting with Labubus. I really, really wanted one. And I got my brother to get me one when he was in Japan. And it was kind of weird because I didn't really know why. and I just wanted one because they were so scarce and I like to collect things and I thought they look kind of cool, but what am I gonna do with it? I'm not gonna put it on my bag because that's just not really me, but I like collecting things and that, that's why I thought this would be a really good episode today and it got me really thinking and reflecting and learning and looking back on these successful companies and founders that I've interviewed on how they use scarcity in particular, the drop model as a method to drive ridiculous amounts of sales in their business.

3:19So let's start with Lububu, like what makes them special? So the first thing is they're hard to find. The second thing is they're randomized in each box, which makes it fun, which makes it exciting, which makes it an experience. So you don't know what you're going to get and then they are restocked unpredictably. So if you take the combination of all of those things, that creates scarcity. That creates a buying behavior. And that buying behavior has created a multi-billion dollar company, which is really, really wild. Like Popmart, the company that are behind Laboo, they're a massive, massive company.

4:00But what has really taken off is this concept around these Laboo Boos and why everybody wants them. It's got, you know, FOMO, you know, fear of missing out, urgency and social proof. And it's got an incredible unboxing experience. Like everyone wants to unbox them. I remember I used to collect Pokemon cards. Pokemon cards were a massive thing. Everybody wanted that Charizard. But it's very, very different now because you've got social media pairing it and people are filming their reactions on TikTok. They trade with others. You know, they collect like it's a currency now. And it's not just toys, right?

4:35I talked about Greta, what she did with the fifth watches. For years, they only sell the product on the fifth of every month. They used to lock the site and you needed a special password. It was really, really clever. No one was doing it and they made buying a watch feel like an event and they had limited quantities. So the key takeaway I want you guys to have is scarcity can sometimes come off as like a bit of a marketing gimmick or tactic, but you can make it feel authentic and you can naturally bake that into your product and you can play with that. It's really about positioning your product as something that's worth waiting for.

5:12so i never forget when i was talking to greta when um we first met we became friends in the early days and i interviewed her and i asked her how'd you do a million dollars in a day and she's like well nathan like first and foremost we had a wait list of over 10 000 plus people they had 10 000 plus people waiting to buy that product as soon as the store opened so that's how it starts right It was the fifth watches. They opened on the fifth of every month and there was a wait list. So they created this buying behavior and it wasn't anything that was inauthentic. Like they genuinely didn't let people buy until the fifth of every month and they had limited order quantities.

5:54And that was how she did a million dollars in a day, which is kind of crazy. And if I think about, you know, when we've done million dollar launches at Founder, there has been some scarcity around bonuses for our programs. There has been limited time offers. These are things like live events or certain collaborations with partners that we cannot do. That's why you have to move now. That's why you have to enroll now. And I think it can be taken as this kind of fake scarcity and you don't want to do that. That's the worst thing you want to do. So when you're looking at your marketing and wanting to use scarcity and adding that as a component, think about your product.

6:28Think about how it's uniquely placed and how you can position in the marketplace where it is something different, where it does stand out. and perhaps you do genuinely only have limited order quantities. When I think about one of our students, Lily Lou, she created a pet hair resistant loungewear brand and she had a limited order of stock. She genuinely launched the product. She only could afford a limited amount of stock. So she had a low amount of MOQs and then she built up hype and then off one TikTok video, boom$6 ,000 worth of product sold out then she's like okay well then this is the drop model so she did limited orders and that drop model it's really really powerful so one thing to think about is when everyone has access and the opportunity to buy there's no reason for them to buy right now but when they have a limited time and there's a scarcity element to it where the product is positioned in a way that if you don't buy now, you might miss out, then that's what gets people excited.

7:36That's what's really, really fun. But like I can't stress enough, you don't want to make this a fake scarcity marketing type gimmick because that doesn't feel good. That feels deceitful. And that makes the customer feel really crappy. That's really, really important. So when we look at Popmart or the Fifth Watchers or Lilly's brand, you had to act now. You don't know when it'll be back in stock and you want it more because it's rare. And I think that's the big marketing takeaway and the marketing sales psychology part of it is you want it more because it's rare. I really, really wanted to get a Black Labu-Boo.

8:15Now I didn't get it, so that wants me to keep buying because that's the rare one. So they've built in all these psychological triggers where it's not only they have limited drops, but when they do have limited drops, you don't know whether you're going to get the rare one and they only produced a small amount of that rare one. You don't know what you're going to get. So it's a whole experience. It's a whole mystery. Same with Pokemon cards. It's very, very, very clever. Now, the next thing to think about and another great lesson when I think about Lububus is when it's paired with community, that's when it works best.

8:47So this is something that Greta and Lububu understand so much deeper is the community element. There are people trading the boo-boos online. The fifth watches used viral loops. So basically, as people shared the special waitlist code, it allowed more people to get on the list, which is really, really clever. So during a certain time period, they opened up the store where you could buy the watch or during the other days of the month, you could sign up to the waitlist and you could get yourself higher up on that waitlist to be notified if you shared the wait list with other people and you got points.

9:25So it's got that viral loop component, which was absolutely genius. Same with Labubu, right? They're traded, they're shown off, they're discussed. There's a culture around it. You know, everyone wants to get that black rare one. So the key takeaway here is scarcity without community is also a missed opportunity. So you wanna lean into the buzz, lean into the chatter, lean into the culture. Now, here's where a lot of brands mess up. It's perhaps they do the drop model or they do something around scarcity, but then they restock too quickly or they extend the window or they train their audience to expect more.

10:04So what makes Labubu very, very special is their uncertainty. You know, they just launched this new kind of doll thing. And like my brother showed it to me and I'm embarrassed to tell you guys this. My brother's like, oh, there's this new doll thing. It's like 100 bucks, 120 bucks. and I just got engaged and it holds this ring and I was gonna put the fake ring that I gave to Miriam and all this kind of stuff. And I was like, all right, I'll get it, why not? Like, I don't know whether it will sell out or not. So I just bought it. So it's that uncertainty that I have trained me to buy. And that's kind of really, really, really, really clever, right?

10:38So that unpredictability builds anticipation. Same with the fifth watches. You could buy the watch on the fifth of every month for five days, no more, no less. it was exactly five days. Then the doors shut. So that consistency made people trust the scarcity. They trusted that it was real. So the key takeaway here is if you break your own rules, your audience will stop trusting you. You will lose faith. Another great brand is like Supreme and they have fun with it as well. Like I never forget, they sold this brick just for a joke and people actually tried to buy it because it was just funny. This is where you kind of have that unpredictability you know throw some salsa dancing into the mix around the products that you're launching or when they're dropping but like make it scarce don't go crazy so what can we learn from la boo boo and the fifth watches and lily's brand one of our students that i mentioned it's that scarcity isn't a gimmick and whatever you do don't create fake scarcity what you want to do if done right it creates urgency it builds community it adds perceived value and it really positions your product in a really really strong way and it makes people feel something it makes that buying experience so much more fun than just the product itself and at the end of the day that is what great marketing is all about so if you want more help on the marketing side growing your e-commerce brand we have so many next level trainings live workshops and an amazing community of like-minded people that are all trying to grow their e-commerce brand to selling physical products online.

12:18So you can get a 14 day trial for just$1 if you go to founder.com forward slash membership. All right, guys, I hope you enjoyed this one and I'll see you in the next episode.