Site Reform Proposal

comments

In an attempt to correct recent issues experienced by our clients, I've spent the last week or so considering alternatives to our current sale process. Before I go into my report on this matter, I'd like to revisit our mission here at CD, which is to make as many puzzles as possible at the highest quality and lowest price.

Price and availability have an inverse relationship when it comes to individual collectors. With higher price comes greater availability to those with the means to pay that price...and vice versa. Since maintaining the lowest price possible is part of our core concept, I have always chosen to keep prices as low as possible.

This brings us to the heart of the issue: we are unable to meet demand without increasing prices to shift that demand. While we are always working to increase production, it's very difficult to scale this type of work and maintain quality. We could put out more work at the expense of our quality, but that destroys the core of what we do and I will not consider that option.

Therefore the matter must be addressed within the assumed framework of demand exceeding supply. This brings clarity as there are now a finite number of options:

  • Make fulfillment arbitrary by introducing chance (lottery-type solutions)
  • Increase prices until supply meets demand (auction type solutions)
  • Optimize the current system (site and communication solutions)

I have chosen the last as it is most in keeping with our values. Therefore I am proposing the following changes to our operation:

  • Institution of a five-minute hold when items are added to the cart.
  • One copy per customer limit during the first 24 hours after release.
  • Short descriptions and tentative wood choice/pricing published as early as possible on the Upcoming page (currently implemented).
  • Blog post of photos, descriptions, and firm prices 24 hours in advance of the update.
  • All site work to be completed 24 hours prior to the update to minimize the possibility of update issues.
  • Golden ticket program: Three to five randomly selected orders per update will receive a Golden Ticket with their order. This ticket is non-transferable and has a 12 month expiration period. Only one ticket may be possessed at a time. The ticket allows the recipient to pre-reserve one item from an upcoming release.

While I am committed to these changes I would like to address other possible solutions I considered. I do believe that listening to customers is the best way to run a business, after all, it is they we serve. Therefore I am listing below the alternatives I have identified along with the pros and cons as perceived by me.

I will be posting this blog to Facebook and encourage collectors to weigh in with their thoughts. Should an obvious consensus emerge I am open to adjusting our methodology.

Alternate Solutions

MEMBERSHIP

Provide early access? Membership would give a limited number of early access tickets? Order fulfillment by lottery?

    Pros:
    • More equitable distribution
    • Selling memberships bolster site revenue
    Cons:
    • Higher administrative overhead
    • Higher cost of item acquisition
    • Makes it unlikely anyone would be able to acquire all the items they want
    • Stifles growth of customer base by requiring buy-in to participate
    • Increased prices for no added value, violating our principle of charging for the item and only the item


    AUCTIONS

    Reverse Auction - items posted at 150% of list price, price decreases by 5% every day until it reaches 100% of baseline.

    Regular Auction - add all items to the marketplace and they sell for what they sell.

    Pros:
    • Easy to administer, does not change fulfillment (reverse auction)
    • No rush to buy, customers don't have to be at the site at an exact time
    • Increased revenue
    • Well-heeled customers still able to acquire what they want
    Cons:
    • Less equitable distribution
    • Disenfranchises customers of lesser means
    • Higher administrative overhead for fulfillment (regular auction)

    PRE-ORDERS
    • post upcoming items for sale during a given window and peg production to number of items sold.
    Pros:
    • No rush to buy
    • Known demand
    • Equitable distribution without affecting the cost of acquisition
    Cons:
    • Prepayment becomes a debt, which I prefer to work without
    • Fewer overall designs released
    • The higher risk associated with production errors in large batches
    • Potential for missed deadlines and corresponding worker stress/customer dissatisfaction
    • Sets possibly unreachable paradigm of attempting to meet demand
    • Potential for the site to have no available stock since it's all sold via preorder


    OTHER FACTORS / CREATIVE SOLUTIONS

    Split the release:

    • Release some, release the rest via dutch auction on the marketplace?
    • Release some with a small number of second chance tickets by lottery with an upcharge for the administrative load?
    • Reverse auction with increasingly large tranches of items? For instance, every time price decreases another 10% of inventory becomes available with a guaranteed amount available at the list price?
    • Half normal release followed by half at regular auction?
    • Etc...