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- Lucas: So you know that feeling when you're browsing a website, you see a jacket you like, and right next to it there's a little banner that says 'only two left in this color'? Luna: Oh, absolutely. And suddenly I'm not just browsing anymore — I'm racing to checkout. Lucas: Right. That's scarcity marketing in action. And it works. But there's a right way and a wrong way to do it. Today I want to look at how brands use scarcity without crossing into sleazy territory — and why some of them are getting pushback. Luna: I love this topic because it's so tied to psychology. And I think listeners might have noticed that scarcity tactics are getting more sophisticated — or maybe just more transparent. Lucas: Exactly. And if these kinds of marketing conversations have sparked something you've actually used at work or just in how you think about ads, one way to keep this show ad-free and independent is listener support. You can head to buy me a coffee dot com slash fexingo. No pressure, just if it's been useful. Luna: Yeah, totally. It's what keeps us from having to do annoying mid-roll ads. So back to scarcity — what's the classic example you always think of? Lucas: Supreme. The streetwear brand that built its entire model around scarcity. They release new items in very limited quantities every Thursday morning at 11 AM. Once they're gone, they're gone. No restocks. That creates insane demand. People camp out, bots buy up everything, and resale prices go through the roof. But here's the thing — Supreme's scarcity is real. They genuinely produce a fixed number of units. It's not a fake countdown. Luna: And that authenticity is key, right? Because consumers can smell fake scarcity a mile away. Lucas: Exactly. And that's where a lot of brands trip up. Booking.com, for example, famously used messages like 'Only 1 room left!' or '5 people are looking at this property right now.' And for a while, that worked brilliantly. But then consumers started catching on — that room was still available an hour later. The UK's Competition and Markets Authority actually investigated Booking.com and other sites for potentially misleading customers. In 2020, Booking.com agreed to change its practices. Luna: So there's a line between creating genuine urgency and manufacturing it. And once you cross it, you risk losing trust. Lucas: Right. And trust is really hard to rebuild. So what's the alternative? How do you use scarcity ethically? Let's look at a few approaches. First, limited editions with a clear end date — not a fake countdown, but a real one. Nintendo does this well with their limited edition consoles. They announce that a special Zelda-themed Switch will be available for a limited time, and once production ends, it's done. That's honest scarcity. Second, you can use scarcity as a signal of quality, not just as a pressure tactic. Luna: Can you give an example of that? Where scarcity signals quality? Lucas: Sure. Think about craft distilleries that release small batches of whiskey. They don't scream 'only 500 bottles left!' to panic you. They say 'we produced a limited number because we aged it longer, or used a rare grain.' The scarcity is a byproduct of craftsmanship, not a marketing gimmick. That builds a different kind of desire — it's more about exclusivity than fear. And customers feel good about buying it, not manipulated. Luna: That makes sense. So the scarcity is tied to the product's inherent value, not just a random number. Lucas: Precisely. Another ethical approach is to use time-based scarcity for pre-orders or early-bird pricing. If you're launching a course or a software product, you can offer a discount for the first 100 customers or for orders placed within 48 hours. That's not artificial — you're rewarding early adopters. And the cutoff is real. Once it's gone, it's gone. Luna: I've seen that with a lot of indie creators on Gumroad. They'll say 'first 50 copies get a bonus chapter.' And I actually feel good about buying early. Lucas: Exactly. The key is that the scarcity has to be tied to something real. A limited production run. A genuine time window. A unique ingredient. Not just a fake counter that resets every time you refresh the page. Luna: So what about the opposite approach? Some brands are moving away from scarcity entirely. I'm thinking of companies like Everlane, which built its brand on 'radical transparency' — they show you the cost breakdown of every item. No urgency, just honesty. Lucas: That's a great counterpoint. And Everlane has a loyal following because their model feels respectful. But I'd argue that scarcity and transparency aren't mutually exclusive. You can be transparent about why something is limited. For example, a small-batch coffee roaster might say, 'We only got 200 bags of this Ethiopian single-origin because the harvest was small. Once it's gone, we won't have more until next year.' That's both scarce and honest. Luna: So it's about framing. The same tactic can feel manipulative or trustworthy depending on how you present it. Lucas: Exactly. And I think consumers are getting better at distinguishing between the two. A 2023 study from the Journal of Marketing found that when people perceive scarcity as manipulative, they actually become less likely to buy. So brands that overplay the urgency card might be hurting themselves in the long run. Luna: That's fascinating. So the short-term boost from a fake 'only 2 left' message could cost you a repeat customer. Lucas: Right. And repeat customers are where the real value is. So let me give you a framework for using scarcity ethically. First, always anchor your scarcity in a real constraint — production capacity, time, expertise, materials. Second, be transparent about what that constraint is. Third, use scarcity to highlight value, not to create panic. And fourth, test whether your scarcity messaging is actually driving long-term loyalty, not just one-time conversions. Luna: I want to push back a little on that third point. Isn't some level of panic okay? I mean, FOMO is a powerful emotion. And for certain products — like concert tickets — a little panic is kind of the point. Lucas: Fair point. Concert tickets are a unique case because the scarcity is real — there are only so many seats. And the FOMO is part of the experience. But even there, the best ticketing platforms are moving toward transparency. They show you exactly how many tickets are left and when they went on sale. They're not flashing fake warnings. Luna: So the line might be: if the scarcity is real, you can lean into the urgency. If it's manufactured, you're playing with fire. Lucas: That's a good way to put it. And I think the brands that have mastered this — like Supreme, Nintendo, or even Ferrari with its limited production cars — they all have real scarcity. They're not tricking anyone. And that's why their brands are so strong. Luna: What about services? Can a SaaS company use scarcity ethically? Lucas: Absolutely. One approach is to limit the number of customers you take on at a certain price tier. For example, a project management tool might offer a 'founder plan' for the first 1,000 users at a discounted rate. That's a real limit — once 1,000 people sign up, the price goes up. It rewards early adopters and creates urgency without deception. Another approach is limited-time feature access. Like, 'for the next 30 days, we're beta-testing ai powered analytics, and you can opt in.' That's a real deadline. Luna: I like that. It's scarcity of opportunity, not scarcity of supply. Lucas: Exactly. And I think that's the most ethical form of scarcity — the kind that says, 'This opportunity won't last forever, but if you act now, you get something genuinely valuable.' Not 'this thing is almost gone' when it really isn't. Luna: So if a small business owner is listening and wants to try scarcity marketing, what's your one-piece of advice? Lucas: Start with something real. If you have a product that's truly limited — maybe you only have 50 units of a handmade item — then use that. Say 'only 50 available, and when they're gone, they're gone.' But if you don't have real scarcity, don't create fake scarcity. Instead, use something like an early-bird discount with a clear deadline. That's a form of scarcity that's always honest because the deadline is real. Luna: And if you're not sure whether your scarcity is ethical, ask yourself: would I feel comfortable explaining this to a customer face to face? Lucas: That's a perfect litmus test. If you'd hesitate to say it out loud, it's probably not right. Scarcity marketing isn't going away — if anything, it's becoming more sophisticated. But the brands that win in the long run are the ones that treat their customers with respect, even when they're trying to create urgency. Luna: Yeah, I think that's the takeaway. Use scarcity as a tool to communicate value, not to manipulate behavior. And if you do it right, customers will actually thank you for it — because they got something special. Lucas: Exactly. And maybe that's the ultimate test: does your scarcity marketing make customers feel good about their purchase after the fact? If yes, you're doing it right.