Under-Order Momentum
Start retailers conservatively so sell-through creates a visible reorder win
- Difficulty
- Moderate
- Time to result
- ~months to results
- Steps
- 4
- Confidence
- 95%
McFarlane sometimes talked retailers down from large orders rather than maximizing the first invoice. His arithmetic shows why: if a buyer orders 75,000 units and sells 60,000, the remaining 15,000 feels like failure. If the buyer starts with 40,000 and reorders 20,000, the same 60,000 sales feels like momentum. The supplier holds some additional inventory and replenishes as demand appears. This aligns the opening order with realistic sell-through, protects the buyer from a demoralizing overhang, and creates positive evidence through reorders. It is partly expectation management, but it also requires operational responsibility: both parties must be realistic, and the supplier must be able to carry and deliver the buffer.
Origin
McFarlane explains why he reduced retailers' requested toy orders to protect their perception of a launch.
Core principles
- 01The same unit sales feel different depending on the opening order
- 02Excess inventory can make a commercially sound product look disappointing
- 03Supplier-held buffer inventory can protect the retailer's first result
- 04Realistic orders support longer buyer relationships
How to run it
- 1
Forecast realistic sales
Estimate what the retailer can plausibly sell during the initial period rather than accepting the largest requested quantity.
Watch out Optimism is not a substitute for sell-through evidence.
- 2
Set a conservative opening order
Recommend an initial quantity below an inflated request so the retailer is less likely to carry disappointing excess stock.
Pro tip Leave room for a visible reorder if the product performs.
- 3
Carry the buffer
Build additional inventory at the supplier's cost so replenishment is possible without shifting all risk to the buyer.
Watch out Do not hold more buffer than the supplier can safely finance.
- 4
Replenish on evidence
Supply more units as actual sales justify them and make the reorder visible as proof of momentum.
Pro tip Track total unit sales as well as the buyer's inventory position.
In the wild
McFarlane describes steering a retailer away from an order of 75,000 units and starting at 40,000 instead. He would hold inventory and replenish. Selling 60,000 then produces a reorder rather than leaving 15,000 units that make the buyer feel the product failed.
→ The same sales total is experienced as positive momentum instead of excess inventory.
Common mistakes
Maximizing the first invoice
A large initial order can damage the relationship if unsold inventory makes the buyer judge the launch harshly.
Promising replenishment without stock
The method depends on carrying enough supplier-side inventory to respond when demand arrives.
Is it for you?
Best for
It is best for suppliers that can replenish retailers and afford a measured inventory buffer.
Not ideal for
It is not ideal for products with very slow replenishment or supplier-side inventory risk that the business cannot carry.
From the transcript
“I know you want 75,000 units of that. But you know what, why don't we start you at 40? I'll build some inventory, it'll be…”
“You buy 75 ,and you sell 60, they're going to go, "Ah, I got 15,000 in inventory, it's not a success." If you give them…”
From the episode
#643: Todd McFarlane, Iconic Comic Book Artist — Lessons from Stan Lee, How to Make Art that Outlives You, How to Compete with Corporate Giants and Win (While Having Fun), Dealmaking Strategies, War Stories from Wall Street and Lawyer Land, Taking Responsibility for Your Life, and Why Creators Need to Smash Limits
Stan Lee