The use of artificial scarcity in marketing is a tactic employed by sellers to create a sense of urgency around their products, pushing customers to make purchases for fear of missing out. This strategy makes sense in a crowded marketplace where everything is infinitely available, and there are many alternative products. When a product stands out, especially due to its apparent scarcity, customers tend to value it more. This practice is evident on Amazon during Black Friday sales, where time-limited and quantity-limited deals are offered, often resulting in increased inventory movement.
However, artificial scarcity has negative consequences, especially when looking at the creator economy. When customers buy books or courses from an expert in their field, they are not purchasing an easily replaceable commodity; rather, they trust that creator to deliver something unique and valuable. Digital copies of these products are inexpensive to create, but when sellers use artificial scarcity to limit access, it damages relationships with customers. It leaves customers feeling manipulated and erodes trust in the seller, impacting future transactions with them.
Using artificial scarcity can also lead to inefficient use of resources, encouraging people to buy things they do not need or cannot afford, resulting in digital waste. It also causes impulsive purchases that customers may regret later, damaging the reputation of the seller in the community. In a global community, employing artificial scarcity can disproportionately affect people with lower incomes.
Burning relationships for short-term financial gain is never a good idea, especially when one is part of a community that thinks in decades. Artificial scarcity can create short-term financial gains for sellers, but in the long term, it can have far-reaching negative consequences.