The Philosophy of Overstock

With the upcoming launch of MCC TCG Overstock, I wanted to take some time to write out my thoughts and philosophies around our Overstock inventory management system here at CREO, as well as hopefully answer some FAQs.

Reminder:

MCC Collector's Edition is live: Aug 18

MCC TCG Overstock is live: Sept 22

What is Overstock?

Overstock is any inventory that is available to immediately Ship from Stock. This is in contrast to our primary business model of preorders, in which customers back a project prior to manufacturing starting.

Overstock inventory is available in our warehouse, and will ship out within 2-3 business days of your order being placed.

How has Overstock changed over time?

As background, we offer a 100% cancellation policy for any preorder, between the time it is placed and when the product is shipped out. This is unusual for a company with a preorder business model - most preorders are non-refundable and final sale.

However, this has always felt like the right thing to do to us - people’s situations change, and we never want a customer to feel regret about supporting a preorder.

Originally, Overstock started as just these refunded/cancelled units - after the preorder ends, we immediately begin manufacturing based on the quantity of units sold. If an order is cancelled, we still have the inventory, so we offered this for sale as Overstock once the original product began shipping.

We quickly realized that the demand for Overstock far exceeded our expectations - with one of our first ever Overstock sales selling out in <4 mins.

In hindsight, this makes sense - the nature of randomized trading cards means that people typically want to come back and buy more to try and complete the set, or have more cards to trade.

Additionally, we’ve heard from members of the community that ideally, they would want access to our products indefinitely. We call these ‘evergreen’ products internally. This is a bit of a misnomer as this isn’t strictly possible because of licensing terms and deal lengths, but it is possible to increase the amount of inventory printed to allow easier access to products for the everyday customer. 

Because of this, we’ve started to lean more heavily into Overstock inventory to try and match and satisfy the demand over time.

Benefits and Risks of Overstock

However, any Overstock comes with its own sets of benefits and risks:

Obviously, having more inventory available for customers to purchase is a plus for everyone involved - us as a company, the customer who can buy directly from us rather than a 3rd party, and our creator partners.

However, Overstock is inherently risky - we are paying for inventory that we have not yet sold, and taking a risk that it might not sell over time. This risk profile directly increases as we scale the % of Overstock that we produce.

We’re also learning what sells and what doesn’t - we’ve noticed that a non-randomized product like a Game Box has a much lower sell-through rate than a randomized product like a Booster Box. Once again pretty obvious in hindsight, but incredibly valuable to learn.

Finding the balance of having enough inventory to satisfy returning customers, while not having too much inventory that we end up having units sit in our warehouses indefinitely, is the delicate balance that we are trying to dial in.

For MCC TCG - we’ve scaled our Overstock inventory slightly higher once again. This increases our risk, but also decreases the potential opportunity cost of selling out too early, and also gives our customers the best chance to get a product at retail price.

We’re also hoping that this will avoid the need to do the logistics cartwheel which is rolling Overstock access, which was a byproduct of previous limited availability Overstock products.

Overstock Product Design

Another interesting thing to consider is the design of the products themselves.

Fundamentally, we want the initial preorder to be as large as possible - the size of the Overstock is a percentage of the original sale, so the total size of the project is capped by the size of the initial preorder volume. Before you ask - we aren’t able to share the specific %, as this varies by project and is covered under contract NDAs.

However, if customers know that they can just wait for Overstock rather than supporting the preorder, many will choose to do so, therefore shrinking the size of the project overall.

In general, we want to lean away from the FOMO model and towards making our products as easily accessible as possible. However, we need to balance this with rewarding early backers of a preorder to make it worth their while (and patience!).

Things We’ve Tried

We’ve experimented with a few different ways of addressing this - with the currently live Civil Draft project, we have an exclusive Booster Pack featuring unique alt-artwork 

This has echoes of the original HCTCG product, which came with a free slabbed card with every order.

However, including something free in every order is difficult, as it compresses the margins of the project - it’s a linearly scaling cost that increases with every additional order.

We’ve also tried having unique products that are only available for sale during the preorder period - for example, typically Collector’s Edition cards are a preorder exclusive. 

Finally, we’ve also experimented with having a fundamentally different product in the original preorder, vs the Overstock. This is the case with the MCC TCG - the original preorder was the only way to get signed cards in the randomized booster boxes, and the Overstock will not include any signed cards. 

Compared against a free product added to every order, this works better from a unit economics perspective, as the cost is essentially the same between the two different products. Which in turn, lets us offer a better deal to our creator partners. However, we’re expecting this to somewhat negatively impact the volume of Overstock sales, and this strategy also comes with its own logistics pretzels we need to solve by tracking two different sets of SKUs, which dramatically adds complexity to all areas of the supply chain.

To be completely honest - we aren’t sure what works best, and we’re still continuing to experiment and iterate over time.

Final Thoughts

Overstock is a concept that has huge potential to benefit our partners, and our business. However, it’s one that requires careful consideration and planning to execute accurately.

The goal is always to make it worth your time to support a preorder, be able to offer the best deal to our creator partners, and set the product line up for success long term with returning customers.

As always, let me know your thoughts! Join the conversation in our discord at discord.gg/creocards.

Thank you for your interest in my words, and support on our projects - still feels like a dream that I’m able to work on this company every day and I’m eternally grateful.

- Luke Chesney
Founder, CREO