By Lauren Chircus, Fellow at Insight Data Science
Recently, Tindie decided to remove the Backorder feature on the site based on the premise that the Waitlist feature is a more effective method of driving product sales.
How the Waitlist feature works:
1. When a product is out of stock the user will see a large button that says “Join Waitlist” instead of “Add to Cart.”
2. The user can then enter their email and desired quantity to join the waitlist.
3. The seller will be notified that someone joined the waitlist.
4. When the product comes back in stock, all people on the waitlist will receive an email letting them know!
Overall, the Waitlist feature is a very strong driver of sales. Since first introduced:
- 10.3% of all Waitlist requests led to a sale
- 16.3% of Waitlist requests for products that came back in stock led to a sale
- 2% of Waitlist requests for products that came back in stock did not lead to a sale because by the time the buyer visited the site, the product was out of stock again
- 36.7% of all Waitlist requests are for products that are still out of stock
Moreover, product sales surge the day that they come back into stock. You can see this effect for the 322 products that have come back into stock since November 1, 2014 in the graph below:
In this graph I’ve designated day 0 as the day a product comes back into stock. In blue we have the number product orders relative to that day, and in yellow we have the number of product orders resulting from Waitlist requests relative to this day. (Note: the total quantity of products sold is actually higher – this is just the number of orders and doesn’t account for the quantity in each order).
In the graph, we can see that orders spike the day a product comes back in stock. In fact, number of orders drops off exponentially as the length of time following when a product comes back in stock increases.
Perhaps many people prefer to wait until a product comes back in stock to buy it, as a result there is pent up demand. Alternatively, social media hype could drive product sales when they come back in stock. The effect of both of these could result in an exponential drop off in orders per day.
In conclusion, relatively few buyers prefer buying a product on backorder, while the Waitlist feature and transitioning a product from out of stock to in stock drive sales. Also, make sure you let the community know when it’s back in stock by posting on the forums where they hang out, Reddit, or Twitter!