Sep 14, 2017 4 Min READ

Create Artificial Scarcity to Catapult Your Conversions
Chad Rubin

Chad Rubin is the co-founder and chief executive officer of Skubana, a multichannel e-commerce software the enables brands to unlock growth by unifying their back-office operations.

4 Min READ
Create Artificial Scarcity to Catapult Your Conversions


We’re all about helping you increase your conversions so you can start earning more money in your business. One timeless marketing strategy that increases sales and conversions across the board is scarcity. Scarcity alone is responsible for a 226% jump in sales in one test. We don't ignore the data, so we built the option create scarcity on your sales channels so you can increase the demand and get that conversion.

Painting the picture

You are scrolling through your Amazon search results, looking for the perfect toaster. Your old one broke about a month ago, but deciding which one to get has been hard. There are so many options! Do you want a two slice or a four slice? Do you want one that fries eggs on the side? How about the one that creates a perfect English breakfast muffin?

It’s decision time! that you think about it, you don't really need a toaster. You can come back to this later. Amazon will always be there for you.

You begin to close all your tabs when you see it. The almost perfect toaster you've been going back and forth on. The price is good. The reviews are in the solid 4.5 stars. It makes toast. And, there are only 3 left! Suddenly, having toast on demand seems incredibly important. You hit that buy button and get on with your life.

How scarcity increases conversions

In the case of the toaster, the conversion from uncertain would-be customer to excited buyer was triggered by scarcity.

The buyer was procrastinating because their options seemed limitless. The seller introduced the idea that they weren't by hinting that the buyer wouldn't be able to get what they wanted later,  because it might no longer be there. So, they had to make a snap decision.

While most of us love to believe we buy based on rational facts and specs, purchase decisions are driven by emotion. That's why we keep going back to certain brands even though other companies make arguably better items. By tapping into the buyer’s emotions, we can create more conversions.

The scarcity principle is a well known phenomenon, studied by both psychologists and economists. The fear of missing out on what we want counteracts the ‘I need to think about it’ instinct.

When something is scarce, it immediately becomes more attractive because our perceived value of it increases exponentially. It all goes back to the famous 70s cookie study. Researchers divided 12 identical cookies between two jars. They put 10 in one and 2 in the other and checked which jar the participants wanted a cookie from. Most wanted a cookie from the jar with the 2 cookies. Scarcity made those cookies more attractive.

Product scarcity drives conversions by threatening to take the item away from you for good. This sudden fear of not getting what you want pushes you into a decision. But, actual scarcity isn't great for your bottom line as it decreases the level of customer service you offer. So, how do we capture the conversion driving emotion without sacrificing our service quality?

Using Extensiv to create scarcity

Smart e-commerce businesses can use artificial scarcity to increase sales and actually help customers make purchase decisions. Because scarcity is such an important selling technique, we built in the option to mirror it right in the Extensiv Order Manager (formerly Skubana) so you can increase demand and get that conversion without actually running out of key items.

Sellers can chose how much inventory to show for each item on each platform and use scarcity to encourage potential customers to hit that buy button instead of waiting.

For example, you can set your Amazon account to always show a set inventory number. For example, you can set certain items to stay at 5 units no matter how many units you have, until the inventory actually drops to 5 units. At that point, the customers will begin to see the true value, eventually going down to zero. You can set this across categories or get really granular and give different items specific numbers.


And, to make sure you don't actually run out of stock, you can set up solid reorder rules so the system knows when it's time to place that next product order.

Selling is a competitive business and e-commerce companies are often fighting David on one side and Goliath on the other. You need a competitive pricing strategy, effective branding, quality goods, optimized descriptions and a sprinkling of luck! Tapping into the desire to act by triggering urgency can help you increase conversions and even out the playing field for your multi-channel e-commerce business.

Using artificial scarcity wisely

Creating artificial scarcity is a well known and widely used sales tactic. And, as with any other powerful tool, you need to use it wisely. Most of us don't like being deceived when trying to buy something. At the same time, we accept the fact that sellers use a number of closing tactics to create a sense of urgency and actually trigger the sale.

This conversion dance is a necessary and important part of the buying and selling process because without it, most buyers will keep on procrastinating until their need is so desperate they buy the first thing they see.

You've probably heard the old saying, “don't go food shopping while you are hungry.” But, you've probably done it anyway. The way you shop when you are starving and when you are stuffed are two extremes.

When you are starving, every single food item you see seems incredibly attractive. You can see yourself eating all of it, probably before you even make it to the car. So, you make some poor choices and end up with shopping bags full of snack food. On the other hand, when you are full, food doesn't seem that interesting. Yes, you know that this is your only chance to do a big shop this week but the food will still be there when you come back. Plus, this bag of kale and bunch of bananas will probably be enough.

These extremes aren't good for buyers or sellers. What we are all aiming for is the happy middle where the buyer makes the conversion based on some research without procrastinating themselves into complacency.

As sellers, we have a duty to our customers to make the buying process easier, less stressful and more enjoyable. Using artificial scarcity correctly can help you increase conversions while improving the customer experience! Trigger urgency and make scarcity work in favor of your multi-channel e-commerce business.

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