December 12th, 2022
When it comes to creating hype, almost anything can go based on the massive demand in the market. The hyped product can be anything- an antique painting, a rare diamond, an autographed comic book, and even a brick with a brand name on it! Though sometimes the hype is understandable- an original painting by renowned artists like Van Gogh or a rare pink diamond is one of a kind and can be sold for millions in an auction, how do you justify the high prices for regular items like slippers, bricks, or even toys? In this article, we’ll see how some brands are so popular at the cost of others.
Irony- Take the brand Recess. It advertises ‘sparkling water’ which in general terms is nothing but drinking water with some (supposedly) nutritious additives added to it. These sell for $5 a pop. Mostly advertised to those with deep pockets, this drink sells out pretty quickly. The same is the case with those intending to buy Supreme clothing online.
Most of the products sold by Supreme aren’t that valuable at face value, they’re only valuable because they have the Supreme logo on them. Sometimes people go crazy whenever Supreme launches any branded product- what you could get for $1 in the market is sold for $1,000 or more on Supreme. This doesn’t make sense, but it is this irony that helps the brand create hype.
Drops- Supreme pioneered the ‘drop’, a limited edition product release strategy. This sales tactic became so successful that many luxury brands copied it- from Burberry and Gucci to all major fashion brands. Here, new products are launched regularly every week or month and in extremely limited quantities- the products sold usually aren’t sold again later. For customers, buying such products is considered an achievement, and helps brands get the margins they want besides having low inventories.
Resale- When the products offered for sale are so limited, there is always money to be made by reselling them. When Nike first dropped the Air Jordan 1 in 1985, they could not cope with demand. Retailers were selling the shoes for a much higher price than the recommended retail price of $64.95. Many people bought these shoes from available retailers and sold them at even higher prices. That’s how the resale economy was born.
These days, e-commerce portals like eBay and StockX have made it easier for resellers to target those who aim to buy best streetwear online or limited edition Air Jordans online.
Scarcity- The more something is difficult to get, the more valuable it becomes. This strategy has been used by brands to create artificial hype for their products so that they sell at much higher valuations. However, brands need to balance the right production levels to get maximum profit. This is a challenging task that results in high resale values.
Deadstock- Usually, unsold goods cost brands a whole lot of money- both in unrealized profits and storage costs. Here, the hype over the brand helps to sell these products at a decent profit. Many resellers see deadstock as a way to earn great profits, they buy these products when sold at a discount and resell them for a profit when the demand rises again. Resellers do this with almost every luxury brand. There are even websites that specialize in this.
High Prices- There is this tendency of rich people to buy expensive goods not for the value they bring, but for the high price it actually has. This helps them boost their social status and gives them a way to display their affluence.
Raffles- The demand for many luxury products is so high that buyers have to enter a raffle for a chance to buy it. For instance, if there are 1000 people looking to buy something with only 20 products in stock, those who win the raffle can buy the product at the stated price. The remaining 980 people keep trying every time the next drop arrives. This system can create problems too. Many people who wish to buy Kith Clothing Online or any other brand have to enter an online raffle where they compete with automated bots set up by potential resellers who try to rig the raffle.
In the end
Brands use scarcity and high prices to hype the product to crazy levels. Marketing the product this way helps brands increase profits, but there are downsides too, like the rise of resellers who try to game the system and earn more than twice the markups on these products.
However, there are e-commerce sites that help you get branded products at a price that matches reality. Visit the Best Online Sneaker Store for more details.
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