Podcast Summary: The Russell Brunson Show

Episode: How 'Tickle Me Elmo' Manipulated Supply To Increase Demand (And How You Can Too!)

Date: December 22, 2017 | Host: Russell Brunson

Episode Overview

In this episode, Russell Brunson explores the powerful principles of supply and demand through memorable real-life stories—most notably, the craze around Tickle Me Elmo and Apple AirPods. Speaking informally with his son, Dallin, Russell breaks down how scarcity can drive value and urgency, sharing both the psychology and practical marketing tactics that entrepreneurs can use to create demand for their products.

Key Discussion Points & Insights

1. Real-World Scarcity at Christmas: AirPods and Tickle Me Elmo

• Russell’s Example with AirPods

  • Russell discusses recent holiday shopping frustrations, comparing the pricing of AirPods directly from Apple versus third-party sellers on Amazon.
  • Apple sells AirPods for $150, but due to long shipping delays during the holiday rush, resellers list them for $800+.
  • Key Point: Scarcity (limited availability) leads to higher perceived value and the willingness of consumers to pay premium prices.
  • "If you look at them, they're $150 on Apple's site. But the problem is it takes like two or three months for them to ship to you... So they take their Apple AirPods they bought for 150 bucks, and they jack up the price for $800 at Amazon." (Russell, 02:18)

• The ‘Tickle Me Elmo’ Phenomenon

  • Russell retells the famous 90s holiday craze, when Tickle Me Elmo dolls sold out, causing prices to skyrocket, with some auctions reaching $10,000.
  • Scarcity created massive demand and media frenzy—parents even resold their children's gifts.
  • "And so Tickle Me Elmo started going, you'd normally buy them for like 20 bucks and they got to like 50 bucks, then 80 bucks and people were auctioning for like tens of thousands of dollars to get Tickle Me Elmo." (Russell, 03:51)

2. The Business Lesson: Harnessing Supply and Demand

• Supply & Demand Drives Value
  • When a product is abundant (high supply), urgency and pricing power fall. Scarcity (limited supply) increases desire and allows for premium pricing.
  • "When you have a ton of stuff like if there was a billion Tickle Me Elmo dolls, nobody cares and they're not going to freak out and try to buy them. So the price goes lower. But when the demand is high and the supply is small... the people who sell them can charge way more." (Russell, 04:39)
• Application to Information Products & Supplements
  • Many digital products don’t have built-in physical scarcity.
  • Russell emphasizes that entrepreneurs should manufacture urgency and scarcity through smart marketing, even when supply isn’t inherently limited.

3. Marketing Example: The Muscle Media Supplement Campaign

• The Semi Truck Story
  • Bill Phillips’ Muscle Media had plenty of supplement stock but wanted to create perceived scarcity.
  • Marketing consultant Joe Polish ran a campaign using a photo of two trucks full of supplements, telling subscribers they needed help to clear out the overstock.
  • After first campaign success, they crossed out one truck in the next sales letter ("one down, one to go"), further decreasing perceived supply and doubling down on urgency—leading to even better results.
  • "All it did was it decreased the supply, therefore increasing demand. And they sold more from the second letter than they did from the first." (Russell, 06:20)

Notable Quotes & Memorable Moments

• On Scarcity and Holidays:
  "Christmas is in December and they're freaking out, so they have to go look for other places. So they go on Amazon, they find people who had the foresight to know that people were going to not have foresight..." (Russell, 01:58)

• On Perceived Value:
  "The lesson I want to teach you, Dallin, and everyone who's listening, is the power of scarcity and supply and demand." (Russell, 04:25)

• On Smart Marketing Tactics:
  "You can always do things in your marketing to create the illusion of supply and demand." (Russell, 05:22)

• Dallin’s Role:
  Throughout, Russell involves his son Dallin, making the show relatable:
  "Dallin, hopefully when you are like 25 working in a marketing company, someday you're gonna come back and listen to this podcast episode and hear the moral of the story." (Russell, 06:48)

Timestamps for Key Segments

• [01:43] – AirPods Scarcity Example
• [03:25] – Introduction of Tickle Me Elmo Story
• [04:39] – Russell Explains Supply and Demand
• [05:22] – Creating Scarcity as a Marketer
• [05:45] – The Muscle Media Supplement Campaign
• [06:48] – Personal Closing Remarks to Dallin

Conclusion

Russell Brunson’s episode is a masterclass in using the principles of supply, demand, and constructed scarcity as marketing strategies. Through stories from both his own family and legendary product launches, he demonstrates how perceived limitations can drive value, urgency, and sales. Entrepreneurs are encouraged to employ these principles creatively, regardless of their product’s tangible limitations. This episode is packed with actionable wisdom, engaging storytelling, and a dash of humor as Russell shares these lessons for both marketers and his own son.