Question. If you had $37 million right now, what would you do? Invest it.
Wait a few years and turn into 50 million, or maybe you'd buy 12 Bugatti Chirons, or maybe you donate all to charity. Look, it's up to you, but I can tell you with absolute certainty, there is one thing you would not do and that's burn it. But that's exactly what luxury British brand Burberry used to do with their stock.
In fact, in 2017, they burned over 28 million pounds of their leftover stock. Now you really got to ask yourself why, well, it's the same reason why it's nearly impossible to get hold of a Hermes Birkin bag. And it's the same reason you can't just walk into protect Felipe and walk out with a Nautilus.
And it's the same reason why Supreme Oreos are going for tens of thousands of pounds on eBay, artificial scarcity, and nearly every luxury brand does it. It stops excess stock getting into the hands of people. They don't deem to be worthy enough.
And it also makes sure that their existing stock does not get devalued. But what is artificial scarcity? Anyone who's studied basic economics knows the relationship between supply and demand and that the less of a product there is the higher price it's able to command and conversely, the more of a product, the lower the price.
So artificial scarcity is a practice of creating a fake lack of supply to increase the value of a product. It's why the esteemed jeweler de beers artificially controls the price of diamonds by restricting their release in some market. And why we're also used to countdown timers in websites telling us they're almost running out of stock, creating a feeling of urgency.
It might seem unethical, but I actually want to show you an example of what happens when a brand stops using artificial scarcity. That's exactly what happened to Maserati in 2012, always a niche brand with its demand, never outstripping supply. The exotic Italian brand decided to go mainstream, releasing all manner of new models, designed to appeal to everyone, not just the ultra wealthy.
And did it work. The simple answer is no Maserati continues to post massive losses. And the CEO of FCA Maserati's parent company admitted the making the brand mainstream was a massive mistake.
Meanwhile, in a factory just 25 minutes away, Maserati competitor Ferrari was pursuing a very different plan. Ferrari decided that in 2013, they were going to sell fewer cars. The result was that within their first year of pursuing this policy, their profits were up by 5%.
And last year they posted record profits of 699 million euros. Now, at this point, I probably should inform you, the Burberry has announced that they're no longer going to be burning excess stock instead they'll either be donating it or reselling it now, knowing what you know now, do you actually think that's a mistake on Burberry's part? Go ahead and drop a comment down below.
I'm super intrigued to hear guys opinion. Now I know that those are some extreme examples of scarcity, but as a business owner, scarcity is one of the most powerful tools in your arsenal. Now, as some of you guys know I've been running my agency IAG media for four years at this point, and I can honestly say that at the beginning, there was no scarcity because really I used to take anyone on and use to offer any sort of service, but especially over the last two years or so, where I've been able to scale the agency to a hundred thousand dollar months, profit scarcity was one of the most important tools that I used and not some sort of unethical scarcity scarcity in the way that Ferrari and the tech Felipe does it, where they go, I'm going to increase my prices and I'm going to work with just a few select clientele.
And whenever I get on a discovery call, clients have already spoken to my CMO. They've watched my case study. They know that we are a boutique agency that works with a select few clients and the result clients feel lucky to work with me and not the other way round and while, although it is artificial scarcity, you know, I could bring on more employees, lower my prices and work with more clients.
I would much rather be Ferrari with my agency than Maserati. Now, if you want to learn more about sales, how I operate my agency high, go about hiring, delivering such incredible results on my channel. I have hundreds of videos, live sales breakdowns, 45 minute long videos, talking with my team about what we look for and how I hire in company culture.
I do full report breakdowns and show exactly how much I'm making per month, what businesses it's coming from and what goes into those businesses. So if you want to peer behind the curtain and see how I run an insanely profitable agency using the same tactics that Burberry and Ferrari do whole without burning a single coat, make sure you subscribe, leave a comment down below, letting me know. Do you think Burberry made the right decision and I'll see you guys in the next video.
