Secrets of Psychology 4 : Law of Scarcity

When that salesman says to you there is only one left and it has just been bought. You take attention and human desire takes over. You want that item now, even if you were unsure before. Miraculously the salesman manages to locate the very last item from another store!

Opportunities are more valuable and exciting when they are scarce.

  • That item that has ran out of stock
  • That concert that is sold out
  • That car that has been discontinued
  • That house that has just been sold

Human beings crave and desire things they cannot have.

Famous potatoes

Potatoes and scarcity

In the late 1700’s potatoes were not a popular food, some countries such as Russia thought they were poisonous. The Germans just didn’t value them and fed them to live stock. When Catherine the Great installed high fences around her precious potato fields there was a sudden change in perception. “What are the rich doing with their potatoes?” many cried. The people then had a strong desire for them and demanded they received this valuable food too.

Scarcity is based on 2 traits:

  1. We want to be unique and own special and coveted possessions that no one else has. We feel proud of this ownership
  2. The threat of loss. Items that are scarce restrict our freedom of choice

When we feel our freedom is being hindered and threatened we revoke and want to do the opposite of what we are being told. If something is sold out we see that as a restriction of our choice and we don’t like that. Think of that person you weren't interested in, till she or he started dating someone else. Your interest may have likely risen. This restriction and opposition even has it’s own term - reactance.


Groupon - Law of Scarcity

Groupon clearly uses scarcity in its marketing and on its website. It also uses social proof, which will be covered in a future video.

So what?

What they are losing

  • Point out what the customer is going to lose rather than gain
  • Losing £20,000 in arrears is much more potent than gaining £20,000 in different loan rate
  • Loss creates a lot of urgency
  • With an offer on a website say that NOT buying now will hinder the time to impress your friends with a new stereo you bought
  • The more you deny them, the more energy you give to your cause


  • Buy by 25th May 2014 and receive a 25% discount
  • Be true to your word and be authentic
  • If the sales doesn't end then, then don’t advertise that
  • No deadline can in a lot of situations mean no action


Limited space or numbers in stock? Then heavily promote that fact. Again, no lying here. If you have hundreds in stock don’t advertise the fact you have a finite 11.

Sold out

Having sold out signs can ignite the law of scarcity and get them to think “This is sold out, i better hurry the product i want will be too”. This will invoke the law of scarcity and jump many into action. We have all gone away to think about a purchase yet returning to major disappointment, and this plays in our favour.

Use Wisely

  • A constant monthly sale may disillusion your audience and cause lost trust
  • This is what you want to avoid at all costs!
  • Be genuine about your scarcity in your marketing. Never make outlandish untrue claims or lie for instance in the number of products you do have for sale. You are aiming for long term relationship with your customers, not short term gain


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