How To Manage Unexpected Demand in Specialty

You have two options at the specialty level to manage unexpected demand:

1. Raise prices.

2. Put delivery out further.

Apple has chosen #2 for its smartWatches.

Apple Watch pre-orders cause backlog until summerApple Inc started accepting pre-orders online for its new smartwatches on Friday and demand was so high that the orders were backlogged until the summer.

No, Apple's decisions caused the backlog, not the pre-orders.  Apple might have raised prices to the point demand dropped sufficiently to match production.

The Apple Watch is Tim Cook's first new major product, and the company's first foray into the personal luxury goods market. It's also Apple's first new product line in five years, and its first since the death of co-founder Steve Jobs, who helped create many of Apple's most iconic products, including the iMac computer, iPod media player, iPhone smartphone and iPad tablet. Investors are expected to be looking to how well the Apple Watch does as a sign of whether Cook and his team are still as innovative without Jobs' influence over product design.

No, Tim Cook is making Apple small, as in pusillanimous.  It shows in his product.

 Prices then go up to $1,049 and $1,099. The high-end version, called the Apple Watch Edition and made from 18-karat solid gold, will range in price from $10,000 to $17,000

No, 18 karat is 75% gold, not solid gold.  100% is unusable in everyday products.  Personally, I like 75% gold, 22.5%, copper, 2.5% silver, AKA rose gold.

But back to the point.  In specialty, you never expand production much.  If 1 and 2 above do not do the trick, then kill the item, and do a version of the original.  This is how Ty Warner made a billion selling Beanie Babies.

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