Summary4 min read

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.

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Transcript10 lines

[00:01]
A
It's okay not to be perfect with finances. Experian is your big financial friend and here to help. Did you know you can get matched with credit cards on the app? Some cards are labeled no Ding Decline, which means if you're not approved, they won't hurt your credit scores. Download the Experian app for free today. Applying for no Ding Decline cards won't hurt your credit scores. If you aren't initially approved, initial approval will result in a hard inquiry which may impact your credit scores.
[00:28]
B
Experian. Hey, everyone, this is Russell Brunson. Welcome to the Marketing Secrets podcast. This is a special audio episode just for my audio friends. This will not be on video and I'm in the car right now driving to the grocery store with my son, Dallin. Dallin, how you doing tonight?
[00:42]
C
Tired.
[00:43]
B
He's a little tired. It's late, we forgot. He actually got treats. He's always tired though. He's a growing boy. But he asked me a question and I said, dallin, we're gonna answer this on a podcast. So let's cue the intro music. We come back, we're gonna share with you guys something very, very important to understand about supply, demand and Christmas time. So the how are entrepreneurs like us who didn't cheat and take on venture capital were spending money from our own pockets? How do we market in a way that lets us get our products and our services and the things that we believe in out to the world and yet still remain profitable? That is the question and this podcast will give you the answer. My name is Russell Brunson and welcome to Marketing Secrets. Alright, everybody, welcome back. So Dallin came in the car and we were talking about headphone buds. And you wanna remember, do you wanna tell me, tell everybody what you told me, Dallin, when we were getting in the car about the cheap. How much cheap headphones are versus these ones?
[01:43]
C
So I was looking up how much the headbutt earbuds cost for Apple because I was looking at the iPhone X.
[01:52]
B
You'Re Talking about the AirPods that are super cool.
[01:55]
C
And I looked up on Amazon because Amazon's amazing and it says it's 850 bucks.
[02:02]
B
$850 for the Amazon headphones? He said, you can buy headphones for five bucks. And I pulled out those headphones out of my pocket because I actually love those a lot. If you don't have them, you should get them. I said, actually, these sell for a hunt, not from Amazon. And I'll tell you why. I just explained this to Dallin. So I wanted to Explain it to all you guys, who. I'm sure you understand this, but this sets up the teaching lesson I want to have here in a second. So if you look at the pods. Excuse me, 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 if you buy them and plan ahead is 150 bucks. But if you didn't, and that's like, Christmas time, and you're like, ah, my wife, my girlfriend, my significant other, my kid, they need AirPods. They've been asking for it all Christmas. And you try to buy it, you go to Apple, it's like, hey, we're not delivered till May. And you're like, what? But 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. And so they take their Apple AirPods they bought for 150 bucks, and they jack up the price for $800 at Amazon, and the people who are slow had to pay the difference. And so I was about to tell Dallin about Tickle Me Elmo, and then I said, wait a minute, we should share this story on the podcast. So, Dallin, here's the lesson I want to tell you, and everyone can listen on this. So when I was a kid, there was. It was right when Elmo came out, Sesame street didn't used to have Elmo. And I remember when Elmo came out, everyone, like, I remember being a kid and being like, elmo is the coolest. Like, he was just so much cooler than all the other Muppets, and we all loved him. And then one year, for Christmas, Christmas, they came out with this. They called it Tickle Me Elmo. So you guys have Elmo dolls now? But it's like the original Elmo one where it's like a doll and you tickle it and it'll giggle. And like, that was, like, groundbreaking 30 years ago, right? It was a little scary. So, anyway, so everyone wanted Tickle Me Elmo. And so the company that makes them, it's the loss of supply and demand. So they made so many Tickle Me Elmos, and that was it. And that's all they made. And I don't know the whole story behind it, but basically there was a lot more people that wanted him. Every kid wanted him. It was all over the news. 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. And then other people heard about Tickle Me Elmo and they, when they started talking about how there's none left and one of them sold on an auction for $10,000 then people were freaking out and people that had them were like, well, I could sell it so I can make some money. And so they would take their gifts away from their kids and to make money by selling to other people. And it was just crazy pandemonium. And so the lesson I want to teach you, Dallin, and everyone who's listening today is the power of scarcity and supply and demand. So 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 they're the high demand form, the supply is smaller. So like the AirPods, like there's a high demand for them, everyone wants them, but there's only a few left. The people who sell them can charge way more for them because they need them. So a lot of times in our businesses, depending on what we're selling, a lot of times there's not typically that built in supply and demand curve because we're selling info products or supplements or things that are kind of easy. But you can always do things in your marketing to create the illusion of supply and demand. Good example is Bill Phillips Muscle Media. When I was a kid, it was the biggest supplement company in the world. And in fact some of my buddies now used to work for them, which is kind of fun. Anyway, Bill Phillips had Myloplex shakes and his whole EAS supplement line and he had unlimited stuff, right? Like he could sell as much as he wanted. But they needed to create urgency and scarcity to get people to buy more, to increase the price, all that kind of stuff. So there's a marketing campaign that I believe Joe Polish was part of or in charge of. I don't know. I heard him tell a story one time, so somehow I know it's credited back to him, but what he did is they had two big shipments of supplements coming to their warehouse and two big semi trucks full. So they took a picture of it and then they're like, hey, we should make do like a marketing campaign around this. So they sent a sales letter back to the entire Muscle Media magazine list. They basically said, hey, we over ordered. We had two big semi trucks of supplements in the front. Like we need your help, please, like you know, buy the excess stuff so that way we can get back to normal life, whatever. And they sent the letter out and they sold a ton of supplements. And then they're like, well now we sold a bunch. Let's increase the, let's decrease the supply, therefore increasing the demand. So they took the exact same sales letter and they took the picture of the two trucks and they crossed out one of the trucks and said one down, one to go, and then changed the letter. It was like one left, one left, one left. They sent the same letter out to the same customer base. All it did was it increased or decreased the supply, therefore increasing demand. And they sold more from the second letter than they did from the first. And so that is. I want to share with you guys and Dallin when I jumped out of the car, so maybe this lesson for you guys. 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. But until then, we should go shopping for your treats. Alright, that's all I got, guys. Anything to tell everyone who's listening down?
[07:15]
C
Uh, no.
[07:17]
B
All right, that's. You heard it here first. Alright guys, appreciate you and we'll talk to you all again on the next episode of Marketing Secrets podcast. Bye everybody. Would you like to see behind the scenes of what we're actually doing each day to grow our company? If so, then go subscribe to our free behind the scenes reality TV show at www.funnelhacker.tv.