9 Companies With Products Whose Demand Beats Their Supply: 24/7 Wall Street

By 24/7 Wall Street: It is not unusual for companies with highly successful products to run out of inventory. Oftentimes, companies scramble at the last minute to meet an unexpected upsurge in demand. Some analysts also suspect that companies "create" shortages to boost interest in their products among consumers and the media. Rumors emerged that Apple did this with both the iPad and iPhone, though this has never been proven. Apple's success has been so spectacular that it doesn't matter whether the shortages are planned or not.

The problem with product shortages will get worse for some companies because of the Japan earthquake. Several car companies have already slowed production because of the dwindling availability of parts. Honda and Toyota each expect some of their plants to be shut down for weeks. Several firms that make components for consumer electronics like the iPad will need to close their doors for a while as well. It will not be a public relations stunt if iPad 2 shortages begin anew in the next month.

The duration of manufacturing interruptions in Japan may not be announced until the end of the spring. Companies, however, face these types of challenges all the time. Mattel was unable to sell entire lines of toys when it was discovered that manufacturers in China had covered them with lead paint. Regional oil shortages happen when hurricanes shutter refineries.

Customers rarely care about why they cannot buy the products and services they want. They are not usually in a forgiving mood, and that should worry companies facing potential shortages. A consumer may buy a competitor's product or may decided to skip the purchase entirely.

24/7 Wall St. examined how companies such as BMW and Lululemon Athletica stumbled when faced with product shortages. The companies did a poor job estimating product demand, probably costing them revenue. Sales were further hurt by the news of the shortages.

Below is a list of nine companies whose products barely touched the shelves before getting snatched up, based on 24/7 Wall St. research. Check out 24/7 Wall Street for more information.

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9. Rip Van Winkle Bourbon

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The small-scale Kentucky bourbon does not mind testing its customers' loyalty. Van Winkle sells only 7,000 cases each year, enough to let consumers whet their whistles and little else. Bottles of "Pappy Van Winkle" bourbon are notoriously hard to find, and because it sells out so quickly, many liquor store owners keep bottles behind the counter rather that waste shelf space. An added bonus of low production, the owner adds, is never having to worry about being stuck with large inventories in the case of financial downturn. See more information at 24/7 Wall Street.

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The small-scale Kentucky bourbon does not mind testing its customers' loyalty. Van Winkle sells only 7,000 cases each year, enough to let consumers whet their whistles and little else. Bottles of "Pappy Van Winkle" bourbon are notoriously hard to find, and because it sells out so quickly, many liquor store owners keep bottles behind the counter rather that waste shelf space. An added bonus of low production, the owner adds, is never having to worry about being stuck with large inventories in the case of financial downturn.

See more information at 24/7 Wall Street.

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Comments

[Bera Na Liva]

09:34 PM on 04/14/2011

Geeze! 24/7 Wall Sreet?!? You must be in operation and (gasp!) surviving under the belief that most Septics are a gullible bunch (not withstanding their reputation in many parts of the world that they are)!

Over two thirds of the products mentioned come from corporations with logos emblazoned and warm remarks. I sincerely hope that this has nothing to do with the fact that Rip Van Winkle Bourbon, Lulemon Athletica and Squinkies are small entities by comparison.

Where are their logos and where is an image of ... say ... and actual bottle of Rip Van Winkle Bourbon (that glass of whatever could be anything) ... an actual visible view of what Lulemon Athletica gear looks like (is it a bird?) and ... how come ... the 'Target' logo is patently obvious when it's the Squinkle that is the source of the story?

Nothing to do with who takes out advertising space in your rag ... eh?

[SalesmanForLife]

04:34 PM on 03/24/2011

AUDI baby! Lululemon, love love it.

[StopMakingSense2]

02:45 PM on 03/25/2011

There are some cool Audis but their track record for staying screwed together is near the bottom according to JD Power if you put any stock in that..

[julianmaba]

01:28 PM on 03/24/2011

Have owned three BMW's, then tried a couple of Japanese brands. I plan to go back to BMW as they were a more enjoyable ownership experience overall (fun to drive, excellent build quality). My Japanese cars were as reliable as the BMW's (which is to say - very good), but were quite dull in comparison. Not sure if it will be a 3 or the new 5 Series.

[jackdaniel58]

03:35 PM on 03/24/2011

135i

[jazzypaul]

05:59 PM on 03/24/2011

I drove a 135 and loved it. Nice and compact, plenty of power, comfortable and lots of personality. I'm a fan. Not that I'll ever be able to own one, but it was a fun afternoon nonetheless.

[Mondayboy]

11:17 AM on 03/24/2011

If you build it and build it well, they'll come!!

[EinChicago]

10:38 AM on 03/24/2011

I think the writer mixed up his facts. There's no shortage of Toyota Prius cars on lots, if anything there is a glut of them unsold. However, it's after you buy a Toyota and take it on the highway that it starts to fly off things at an unconrollable rate of acceleration with nio brakes. Silly writer.

[StopMakingSense2]

02:42 PM on 03/25/2011

The crazy company I work for put their territory managers in them. Lousy road cars. When I have to drive one I feel like I'm in a penalty box.. Not for anyone who likes cars.. I'm surprised some are pushing 150k with the original batteries and few major problems. Fortunately they will improve with each generation. We're still in the Model T era of electric/hybrids.

[MIMom]

08:31 AM on 03/24/2011

Ah, it must be nice to have all that disposable income...{sigh}.

What the heck is a squnkie anyway? Also, you couldn't use a pic of Pepcid for your blurb on J&J? Your picture makes no sense.

[sf girl]

04:12 PM on 04/08/2011

I was going to write the same thing about the baby gel picture instead of a Pepcid one. I guess it was too much effort to find a picture of Pepcid...

[RButler]

06:00 AM on 03/24/2011

What's so funny, is that the American consumer thinks he/she is 'choosing' products.  Uh, uh.  They are 'choosing' you.  The advertising and marketing has selected you.  Did you really think pet food commercials were designed for your cat? 
 
I know. I know.  You're different and special and you have specific needs just like the million other 'different' purchasers of the same think you 'chose'.   

[Deleuzian Nomad]

11:19 AM on 03/24/2011

Nice point about the illusion of choice....

[Pectin]

02:43 PM on 03/26/2011

Did you really think that no one is aware of it but you?

[RButler]

10:36 PM on 03/26/2011

Not after looking at many comments on this article. 

[osofar]

05:34 AM on 03/24/2011

Nothing even comes close to the performance of my 1992 Value Van bookmobile. And nothing gets more envious looks as my 1986 Mitsubishi van, whose middle seats can swivel backwards. Talk about manliness, talk about sexy, talk about being a babe magnet!

[osofar]

05:31 AM on 03/24/2011

They left out the most important item where "demand beats their supply", weapons of war. Ooops, my mistake, there is always plenty of weapons for killing people.

[SwingingFromCenter]

04:30 AM on 03/24/2011

BMW or bust.  The only other brand I'd ever consider is Audi.  Those of you talking about how they're overpriced?  Sour grapes at not being able to afford one.

As to the Prius...I can't remember the last time a week went by that I wasn't stuck behind one doing 10 miles under the speed limit on the interstate or that wasn't pumping the brakes trying to charge its battery.  Prius owners cause me a lot of road r.age.  They can all fall off a cliff.

[netzwerg]

05:06 AM on 03/24/2011

I am a BMW guy too, for 30 years or so already.
I don't think they're overpriced either, they're worth every €, especially their 3 and 5 series.

The new 535d Diesel Touring is just über awesome.

[MIMom]

08:47 AM on 03/24/2011

Boy, aren't you a charmer?

[zenrunner]

02:50 AM on 03/24/2011

ah, God bless LuluLemon pants on women! Hideously pricey, but they do the most amazing eye-popping things to the female backside!

[Nec V20]

01:19 AM on 03/24/2011

How many of those products are made in the USA?

Apple? Don't make me laugh.

If anything this was a sad reflection of the reality of America.

I would suggest that everyone reading this take a look around just one room of their apartment/house. never mind what it says on the logo, take a look at how many things that you possess have "Made in USA" on it.

Of a hundred items, if you have more than three or four then you are a true patriot.

[netzwerg]

05:12 AM on 03/24/2011

My lawn-mower is made in USA, but it's a piece of cr@p, 2 times the engine needed to be replaced due to piston jamming in 3 years.
Definately my last lawn mowers made in USA, sorry.

[emak]

09:14 AM on 03/24/2011

Interestingly enough quite a bit of BMW operations are in the USA

http://www.bmwgroup.com/e/nav/index.html?http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/unternehmen/unternehmensprofil/standorte/standorte.html

R&D
BMW Group Designworks, Newbury Park, USA;
BMW Group Engineering and Emissions Test Center, Oxnard, USA;
BMW Group Technology Office, Palo Alto, USA

Production
Spartanburg plant (USA)

The reality is NO major brand is entirely 'Made' in the country of origin anymore, this goes for US, Germany, Japan, etc.

[fleaba]

11:15 PM on 03/23/2011

Lululemon Athletica almost $100 for a pair of yoga pants...are you effing kidding me.
They are cute, but not that cure.

[fleaba]

11:18 PM on 03/23/2011

I mean..cute, not cure. sleepy.

[AWL]

01:38 AM on 03/24/2011

Yoga is most fun done naked.

[barneylee]

10:44 PM on 03/23/2011

You might want to add Dry Fly Wiskey

[DoneDeal]

09:55 PM on 03/23/2011

Question: How many of these "American" companies PAY THEIR FAIR SHARE OF TAXES for all of the protections afforded them ????????