Why Sellouts are our Goal

snapster went on a bit of a rant said

I thought maybe I'd make this more formal someday but then it probably wouldn't get done. So here's a forum-quality attempt (which means it rambles on a bit):

Years ago I made a slide that defined the term "Deal" to venture capitalists. I was having many stupid conversations; and, at the time, I hadn't realized it was the audience. I wanted a stronger talking point of what our company philosophy was. Deal vs. Discount basically. My slide said something like: a deal is an offering at a lower price to a subset of those who would want it.

So, by my definition, the key requirement of a deal was that demand outstrip supply. Now, having come up with the daily deal business model, I would of course talk about how time limits can effectively create ambiguity that a business could use to their advantage. If many people bought an offer in a short time period then assumptions are very likely correct that the offer was a deal. Do it again and again and you become a deal site. However, my point here to you is more precise: until the last unit is sold, you cannot define whether you have a deal or a price drop.

Why does that matter? Price drops might be enjoyable good entry points to buy a product, but they are inherently prone to future price drops. Market clearing price is what I was after -- in fact building a platform to achieve market clearing price is still what most excites me. A platform where price drops are announced is just a retailer. Retail is boring. Amazon bought my business and it became (to me, I'll qualify) a boring retailer.

When you see a sellout occurring on a product, we've done our job. Market clearing price was realized. When you see us offer a smaller quantity event, it is because we found the deal quality to make up for the quantity. And hey, we're small so let's have some fun and show how we want this platform to work. But, be assured we're still not entirely happy. These small quantity deals can be enjoyed for the day, but they don't help us grow and build a better market clearing platform.

So again, if a single person wants one afterwards, the offering was a deal. However, most of the time, the sizes of closeouts available to us are larger than our existing audience can handle. We can't price large quantity deals low enough to get enough people in on the same day. To do this better, we have to build over time. We want a bigger audience to be able to participate and sell out of these potential larger deals. Be assured, right now these opportunities are out languishing in the marketplace without buyers.

Basically, know that we enjoy our sellouts as sort of interim goals. If we have a ridiculously small quantity, know we are pained but also proud to have locked in the true definition of a deal to our audience. Help us grow and we'll use that negotiation power to your advantage on larger deals. (not to mention other mediocre sites & fun to be had)