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The Customer-Funded Business: Start, Finance, or Grow Your Company with Your Customers' Cash by John Mullins

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6Sell Less, Earn More: Scarcity and Flash Sales Models

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Scarcity models, of the five types in the book, are perhaps the most ingenious of all and the most difficult to pull off successfully. As we'll see in this chapter, though most of them generate lots of customer cash, some have been difficult to make profitable over the long term. Scarcity models are nothing new, of course, because purveyors of high-end designer apparel and other luxury brands have been “doing scarcity” for years—you won't find Prada or Gucci on every street corner. Even eligible singles sometimes use scarcity tactics—“Really sorry, I can't make it on Friday,” they tell their suitors—to make themselves more appealing to the mates they covet.

But Zara, the Spanish fashion apparel chain, took the scarcity idea to new heights and, in so doing, defined a new model. Unlike most sellers, which seek to sell as much of everything as they possibly can, in scarcity models sellers actually restrict what is available for sale, in time and in quantity. When it's gone, it's gone. And there won't be any more, either! The implication, of course, is that “you'd better buy now, or you'll miss your chance!”

Zara, as every young fashionista knows, does just that. It follows “who's wearing what” on stage and on the fashion runways—even on the streets of London or La Coruña, ...

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