Wednesday, September 30, 2020

Good Guys Versus Bad Guys (Update)

Dubious Quality VB.NET Advisor Garret Rempel sent a perfectly clear response about why retailers don't want to screen out the bad guys at product launches. 

Garret reminds me of myself, if my IQ was 50 points higher and I lived in Winnipeg. 

Here's his email:
Speaking as someone who has built ordering portals and managed teams and clients on those projects, there's a few considerations as to why many ordering systems don't work to thwart bad actors from buying up limited stock.

From a technical perspective it can certainly be done - or at least done well enough to thwart individuals from purchasing large quantities. Preventing 1 person from ordering 1000 units for resale is easy, preventing 1000 people with the same idea from making a quick buck by reselling a single unit is much, much harder.

But there are forces pushing against implementing those technical solutions too.

1) Creating barriers to ordering is a risk. Captchas, account registration and validation, unit limits, uniqueness checks - anytime you add a hurdle to a process you will lose some percentage of customers, and you increase the risk that a problem with that process will unintentionally prevent some customers from placing an order.

2) Sales are sales. When you have a limited quantity you have a fixed cap on how much money you are going to make, and one purchase is equal to every other purchase.

3) It costs time and money to invest in building protections. And this cost will come out of the margin on the items being sold with no increase in revenue (and risking a potential decrease in revenue - see point #1) to offset that cost.

4) A quick sell-out equals hype and can help understand, and potentially event drive demand. If you can measure how quickly a pre-order sells out (and how successful resellers are), that information may help you scale (and fund) your future production.

5) Lost sales are unquantifiable. Although a quick sell out can understandably result in customer frustration for the latest and greatest, the customers that are pre-ordering are the ones who are probably the most loyal and will get the product anyway by whatever means they can. Customers that aren't eagerly pre-ordering are unlikely to be impacted. So you can't really measure what possible future sales you might have lost as a result of selling out quickly.

It's a tough sell to get a customer to pay for a feature that will only reduce the money they make in the short term by making a business case that it will increase future profit when you cannot measure or quantify what that future increase will be.

TLDR; It sucks for the consumer that gets temporarily edged out if they have been eagerly anticipating a product release, but building protective countermeasures costs money for no measurable gain.

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