Totally about to go all economics meets business meets makeup on youse and I’m not even sorry. Don’t worry it’s makeup related. I just figured I’d put my revision to some use this week. (Liverpool University, you proud?). I’m going to attempt to break down the idea behind why celebrities in particular will sell ‘limited edition’ ‘collabs’ ‘limited stock’ all those type of selling situations that make you think ‘if I want it, I’ll have to get it now’. I’ve done it, I’ll hold my hands up, but I’m going to give you an insight into WHY they sell that way and hopefully HELP you SAVE some pennies.
Disclaimer: this post considers the affect of selling based on limited availability and the impact it has on a brands ability to effectively sell a product range. This obviously is not always a main factor when celebrities or brands choose to sell in this way. Often it can work as a quick and effective method to improve social awareness of themselves or a celebrity may have a personal affiliation to the brand in question. Moreover, if a large brand asked you to endorse their products you’d see it as an excellent opportunity!
Products that tend to be offered on a ‘limited edition’ basis are products people want not need. It’s a product that will have an associated price point and each individual consumer will consider whether the price offered is a price they are willing to pay. In technical terms does the marginal cost of purchasing one product give you an appropriate marginal benefit per product from its use. This thought process and consideration can occur when someone purchases any type of product. More often than not if the product is either a) considerably expensive b) a new product not previously considered or c) similar to products a consumer already owns, the length of time spent considering the purchase will increase as at the time there’s more factors to consider compared to buying the same mascara you always buy for example.
As mentioned, consumers need that extra time to sometimes make purchasing decisions. If you’ve ever purchased a product with limited availability you know there’s not always that time to debate over whether it’s worth it or not. Normally you would be in a purchasing situation where you buy a product or not, with the implication that if you change your mind the product is there for you to purchase at a later date. In this situation you have to either buy it or never have it. This makes you more likely to decide to purchase the product because that implied ‘later date’ option has been removed. Starting to see how for a company this is an effective way to sell a product? This NEED for a product and having the element of buy now or buy never will pretty much ensure that a limited edition sell will be fully subscribed to. Ever heard of MAC struggling to sell a collab range? Nope, didn’t think so.
I started this post by saying that I intend to save you some money. In a situation you may be more likely to consider that end factor ‘purchase later’ even though the option doesn’t exist. If you could purchase it at a later date would you be likely to? It’s new, it’s desirable, will it still be desirable in a few weeks, a month or so down the line? That’s what you need to consider. Purchasing a limited edition product isn’t a bad option but you need to be sure you’re doing it for the right reasons otherwise you’re going to end up with a collection of products you use once or twice and then regret or see something you like MORE that the money could have gone on. In economics and business this is referred to as an ‘opportunity cost’. It’s the thing you forego by having another. When you opt to purchase a limited edition item the monetary value of the opportunity cost may be higher as a brand can opt for higher prices. Why? There’s a limited supply, demand for this good will easily outweigh the supply available, the business will have no concern about left over stock. They can therefore opt for a pricing technique called price skimming, charging an initial higher price. Playing on the rarity of the product so that the people willing to pay the most money will get the product. From the business’ point of view is a wise way to maximise profit.
With this blog my aim is to help you fully consider the options. I’ve done this myself. However, it wasn’t a ‘limited edition’. But choosing to purchase a new product as soon as it was available probably cost me around £20 I didn’t need to spend. But I know people who spend more than that easily for limited edition products, and he knows who he is.
Laura Lee Los Angeles Cats Pajamas eyeshadow palette. American based brand. I’m from the UK. Can we guess what mistake I made? What my lack of patience caused? If my mum’s reading this she will be so smug. I purchased the palette the day it was released, as I’ve mentioned in previous posts Laura is one of my favourite youtubers so naturally when she created a makeup line I was keen to try it. I knew this wouldn’t be a limited edition product but two things came to mind. Firstly, she mentioned worrying about having stock to satisfy demand and secondly, what would the delay be to get this product in the UK or a makeup website that delivers in the UK; such as Beauty Bay. I knew I would be able to purchase the product but I didn’t know WHEN. I really didn’t want to be waiting months to get my hands on this so I purchased it from her website, paid for palette, paid for shipping, paid import taxes. This cost me probably around £65. I’ve just checked what her palette retails for on Beauty Bay thinking it would be around £40/£50 it’s £35! *heart breaks for my bank account*. I don’t regret purchasing this product I use this on the daily, but being so keen to purchase a new product may cost you more money than it needs to. I’ll take the fall, I’ll own up to that mistake. Hopefully you guys won’t be in my position!
Final piece of advice from yours truly. What do most people do before purchasing a product? Consider the quality, consider how long it’s going to last. You really can’t do that with a new product, no one has used it. Youtubers get makeup products around its release date, it isn’t always the most reliable source of information if those reviews aren’t available on launch day. One way to judge the quality of your own accord? Ever seen Kylie Jenner’s snapchat story before she releases a product, what does she do? She SHOWS you, swatches, wear tests, if you’re debating buying a product in this industry the brand will ALWAYS publicise it up to the launch date, consider the quality shown in those pictures/videos. Snapchat/Instagram are great platforms for seeing glimpses of products before they are actually released, if you’re interested I suggest you do a bit of social media digging!
I hope you guys liked this post! Figured I’d do something a little bit different. To be completely honest this is always something that bugs me when I see launches with limited stock, I fall into the selling technique and I know other people do. Just make sure you’re getting what you want not what you think you want because it’s rare! Hoping the New year is treating you well. Someone send me some revision techniques or motivation techniques!
Rebecca Jayne xo