Limiting sales to create profit

BY MATTHEW D. MOHR

One strategy for increasing short-term sales quickly is to have “limited time offers.”

Limiting the time of availability of a product leads to a sense of urgency with buyers. The strategy usually works well, especially in retail environments. A good strategy can also lead to higher profits. When shopping with my daughter recently, she purchased some new makeup which was being sold under the approach of a limited edition. I asked my daughter why she would want to buy makeup which would be only available for a short time. She informed me the company limits production so you feel more unique, then about the time it’s customers would be finishing what they bought, the next limited edition is released. In essence, the cosmetics company created perpetual buyers of it’s products by having continual limited edition sales, plus the relative exclusivity or appearance of restricted supply allowed the sellers to charge a much higher price while insuring continued sales volume.

Terry Redlin, the great artist from Watertown, S.D., established a huge business and generated great wealth through the release of limited edition prints of his artwork. At one time collectors essentially waited in line for his next print to be produced and sold. An active market for his artwork still exists. Redlin art is hung throughout the world due to the use of this limited edition sales strategy.

Perpetuating this strategy takes a very strong marketing group and the creative insight to produce new products over time to insure perpetual sales.

The strategy is a sophisticated enhancement of the old marketing notion of “flavor of the month.” Just about any business could use this approach to market its product as long as the creativity exists to keep it going. PB

Matthew D. Mohr CEO, Dacotah Paper Co. mmohr@dacotahpaper.com