Monday, November 23, 2020

How do you maintain a shortage?

                                               Diastema comiferium grown by Ingrid

How do you maintain a shortage?


            Supply and demand.  High demand --- raise the price.  High supply --- lower the price.


            What every business tries to do is raise the price as high as possible to stay in business for the short term and the long term.


            If your product is perceived to be priced too high relative to the competition, sales go down, so you lower the price in the short term to sell your inventory.  If you must lower your price below your cost, then in the long term you go out of business.


            But we want to study the example of very limited supply and no competition. The sales price can be very high to satisfy the select few who are willing to pay the high price. (Hot Plant)


            If somehow the supply can be increased, what to do?


            My previous advice was: “The obvious marketing plan is to have 10 for sale but have a thousand in the back greenhouse.”


            If I have 100 pots per week that can be sold for $10 each, what are 1,000 pots per week worth?


            A plant buyer never knows how much it costs to produce the plant nor how many you have, only what they are willing to pay for it.

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