The Hype Ate My Cash Flow: My Cautionary Tale About Volume and Being an Idiot...

 

There's a moment in every group buy where you look at the numbers and feel like a genius. The interest form has four thousand million responses. Discord is vibrating so hard your phone sounds like your Mrs handbag. Reddit threads are full of people posting "shut up and take my money" under renders that haven't even had physical samples yet. You sit back, crack your knuckles, and think: this one's going to fly off the shelves.

And then it doesn't.

Not during the group buy, mind you. The group buy goes fine. People commit, money changes hands, the dopamine flows. No, the problem arrives later, months later, when you've confidently ordered a generous amount of extras because surely, surely, all those interest form respondents will come flooding in when it's finally sitting there, ready to ship, no waiting, no gamble. The group buy sales told you that. Right?

Except they don't. They've moved on. And you're left standing in a warehouse, surrounded by boxes, doing the kind of maths that makes your accountant quietly update their CV whilst loading a gun and trying to get behind you without you noticing.

Interest Forms Are Free. My Warehouse Rent Isn't.

Here's the dirty little secret nobody talks about enough: filling in an interest form costs nothing. Zip. Nada. Zilch. Zero.

It takes five seconds to do (don't many things...).

It's the commitment equivalent of liking an Instagram post. "Yeah, that looks cool," you think, ticking the box while half-watching a YouTube video about someone else's keyboard sound test and stuffing your face with enough food to add on ten pounds and lose 3 years off your lifespan. Then they close the tab and never think about it again.

But you, the vendor? You've taken those numbers and built a spreadsheet around them. You've projected numbers, sales, revenue, and that dirty word in this hobby: profit... You've emailed the manufacturer with quantities. You've done that dangerous thing where you let optimism override experience, and experience was trying very hard to get a word in edgeways (much like me when my wife forces me to go to Mulberry or LV to look at handbags).

The gap between "I want this" and "I'll buy this right now, today, with actual money from my actual bank account" is not a gap. It's a chasm. It's the Grand bloody Canyon. Its the difference between Everest and Olympus Mons. And at the bottom of it is a pile of unsold inventory and the shattered remains of that amazing spreadsheet cash flow forecast mixed in with the little bit of dignity I have left.

The FOMO Paradox

But thats not the really twisted part. The thing that made your product desirable in the first place was, at least partly, the scarcity. The group buy had a deadline. There was a window. Miss it and you're out. That urgency, that now-or-never energy, is rocket fuel for sales.

Then you put it in stock, on the shelf, available whenever. And something weird happens. The urgency evaporates. The product hasn't changed. Same board. Same keycaps. Same quality. But the feeling around it has changed completely.

It's gone from "I need to grab this before it's gone" to "oh, that's still there. Maybe at payday." And "payday" becomes "maybe next month" becomes "actually I've just seen a new IC on Geekhack and..." and suddenly your product is the keyboard equivalent of that gym membership you keep meaning to use since new years resolutions in 2021. Still technically available. Still technically desirable. Just not desirable enough to actually open the wallet right now. Its exactly like that six pack of abs I'll have one day.

FOMO is a hell of a drug. And whilst the withdrawal symptoms are brutal for the vendor, the customer barely notices.

The Shelf of Quiet Desperation

So now you've got stock. Lots of it. Sitting there. Not moving. Or moving, but at a pace that makes continental drift look like a speedway where all the drivers are on meth.

Here's what people outside the business don't appreciate:

Stock isn't free just because it's already been paid for

Every unit on that shelf is capital that could be doing something else. It's warehouse space you're paying rent on. It's cash that should be funding the next project, the one that actually does have real, proven demand, but can't happen because the money is trapped inside five hundred units of something that peaked in desirability about eight months ago.

I've said it before: dead stock is the non-running car on the driveway. Full of promise when it arrived. Still technically functional. But every time you walk past it, you feel that peculiar cocktail of affection and financial regret that only comes from pouring money into something that refuses to earn its keep.

The worst bit? You can't even be angry at the product. It's good. Well designed, well made, well received by the people who actually bought it. The problem isn't the thing. The problem is that you made too much of the thing because a load of people on the internet said they wanted it and you believed them.

Rookie error. To be expected when you start out. Except I've been doing this long enough that "rookie" doesn't cover it. Let's call it an "optimist's error" and move on before I need more therapy.

Noise OR Signal?

The fundamental mistake, the one I keep having to tattoo on my own forehead, is confusing noise for signal.

Noise is Discord hype. Noise is Reddit threads with three hundred comments saying "WHEN???". Noise is interest form numbers that look like a phone number. Noise is exciting and loud and everywhere, and it makes you feel like you're sitting on the next big thing.

Signal is someone typing in their card details. Signal is a completed checkout. Signal is money in your account in exchange for a product.

Everything else is just people talking. And people talk a lot. Especially on the internet. Especially about keyboards. I should know; I'm one of them. I've filled in interest forms for things I had absolutely no intention of buying. We all have. It's the hobby equivalent of window shopping, except the shop owner is counting heads through the glass and ordering stock based on how many noses got pressed up against the window. S'not clever...

An interest form is not an order. A Discord react is not a deposit. A Reddit comment saying "this is endgame" is not a purchase. And if you run your stock levels based on any of those things, you deserve what's coming. Which is boxes. Lots and lots of boxes.

The Lesson...

So what's the actual takeaway I'm trying to give you through all this waffle? It's not complicated, but it is painful to accept and I wish I had this 6 yrs ago when we started:

Be conservative with initial stock. Order what the group buy data tells you, not what your ego wants to hear. Tighter initial runs, faster re-orders on proven winners if possible. That's the formula other industries use.

Treat interest forms as what they are: vague expressions of curiosity, not commitments. Discount them as influences on your decision heavily. Make yourself believe its a quarter of the number you see. Then discount it again.

Remember the FOMO cliff. The moment something becomes readily available, it loses the urgency that drove half the original interest. Plan for that drop-off. It's just human psychology sadly that we have to chase the next thing.

Cash flow is king. Capital tied up in slow-moving stock is capital that can't fund the things that will actually grow the business. Every unsold unit is a missed opportunity.

Learn from mistakes. This is my lived experience. Its the kind that shows up in your accounts and your stress levels in roughly equal measure. Try to use it and learn from it. If you do manage this please teach me how because I've got no clue how to actually make it a reality.

 

I'd love to tell you I've solved this completely. That I've developed some foolproof system for predicting exactly how much stock to order. But I haven't. Nobody has. The best you can do is get slightly less wrong each time, and resist the siren call of hype when it's singing its loudest.

Which brings me, with the comedic timing of a man who writes an entire fire safety manual and then sets his own kitchen ablaze, to DCS Olivetti. Because I have...

And I need you to really take this in...

Just done the exact thing I've spent this entire post telling you not to do. The group buy numbers came in. They were fine. They were not, however, anywhere near the MOQ that we were aiming for. So what did I do? Played it safe? Ordered a meagre number of extras?

Nope.

I ordered three hundred percent extra stock on top of what the group buy sold. Thrice the units. Eyes wide open, fully conscious, having just typed several thousand words about why this is a terrible idea. I looked at the spreadsheet, looked at this blog post draft, looked back at the spreadsheet, and thought "yes, but Olivetti though." Fucking idiot.

There is no better cautionary tale than the man who writes the warning sign and then walks straight past it. I am that man. The sign is very well written. I walked past it anyway. Dumb fuck is what you are thinking. You are right.

But the IC was fulll. But the Discord was buzzing. But the interest form numbers were beautiful.

The warehouse will also be full. For a long time. With Olivetti. That bit's less beautiful. (maybe go buy something to clear up some space and make me feel better?)

But at least the keyboards are lovely. Even if there are rather too many of them.