[Steven Wagenheim]

A lot of people ask me this same question whenever I offer something at a limited amount.

If X number of people get it, won't there be saturation?

This is a common question, and I guess if you are new, it's understandable.

So let me put the saturation myth to rest and show why scarcity, while certainly a good motivator for making sales, isn't even necessary.

Let's say you're selling a product revealing a niche and providing supporting products such as articles, reviews for products and so on.

Let's say the main keywords for the niche get 10,000 monthly searches and there are only 100,000 competing sites.

Let's compute the KEI.

(10,000)/(100,000)X 10,000 = 1,000

Now, a good KEI is anything over 100.

Let's say that 200 copies of this product went out and all 200 people used it. We know this doesn't happen, but let's say 200 additional sites went up.

Our new formula is now:

(10,000)/(100,200) X 10,000 = 998

With 200 units sold, our KEI dropped by 2.

2.

To get the KEI to drop to 100, we need to do some Algebra to figure out
how many competing sites we'd need first.

(monthly searches)/(competing sites) X monthly searches = KEI

We need to get competing sites on one side of the equation.

So we first multiply both sides by competing sites.

We then get:

monthly searches X monthly searches = KEI X competing sites

Now, to get competing sites alone, we divide both sides by KEI.

We now get:

monthly searches X monthly searches / KEI = competing sites.

Now, let's plug in the numbers in order to get competing sites:

(10,000) X (10,000) / 100 = ?

? = 1,000,000

So, if we start with 100,000 sites and need to get to 1,000,000 sites to
drop down to a KEI of 100, we need to sell:

900,000 copies of this product and EACH person has to put up a site.

And even then, this would be a viable niche to tackle.

So as you can see, saturation is a myth and so is scarcity as far as a
real incentive for buying something.

Nobody really has to limit the number of something. It is simply done as a
marketing tactic but has no real basis in any kind of reality.

[stacyfox]

Gee, Steven, you'd think we were all math wiz's or something I haven't seen that many numbers since Algebra!

Actually, that was a very good post and I appreciate it. It made me look at competition a whole new way.

I'm glad you are taking the time to offer up some of your pearls here.

Stacy

[jbolte1976]

Thanks for that post Steven. You brought some things to light for me. Like how KEI is calculated. It seems it would be pretty difficult to actually saturate a market. Offering a limited number probably does a lot in instilling a sense of urgency in potential buyers.

Jason

[aryaman2008]

Wow,how much calculations you have done to work out something on internet marketing.Thanks for the useful post.Frankly,i never realized that so much maths is involved in assessing the situation also,in internet.However,i do agree that saturation is a myth as every year i have been cautioned about it,but the situations are getting better.

[aakay4u]

Great post.You seem to have done your maths really well.Most of the people are not aware of this.The basic principle is the same as in any other business to succeed.However,nice to learn how KEI is calculated.