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Isn't that a standard arbitrage mechanic? They're providing a service by storing and stocking items that the general market has decided are not worth producing
by analognoise 7y ago
Isn't that a standard arbitrage mechanic? They're providing a service by storing and stocking items that the general market has decided are not worth producing more of, and people are willing to pay more for certain odds and ends.
It would only be predatory if the items were produced in insufficient quantities on purpose to specifically make money on the arbitrage mechanic, which isn't sustainable for any serious business who wants to maintain its reputation.
It seems like a valid strategy, and I'm failing to see how it's predatory. Could you elaborate?
- reaperducer 7y agoThe problem is when it becomes absurd. A few years ago one of the big dryer sheet brands sold an adhesive bar that you stuck to the inside of your dryer. So instead of throwing a dryer sheet in with each load you just changed this bar every six months. It sold for about $7 in the supermarket, until it was discontinued. Then the only place to get it was Amazon, where thanks to crazy algorithmic pricing it ended up being over $1,400 the last time I checked.
- lotsofpulp 7y agoThe supply curve shifted, and hence the price moved along the curve. If the demand curve also shifts due to the new price being too high, then the price will once again go down. The solution already exists, without any outside forces. If the seller prices too high, they won’t sell, and if they want to sell, they will have to lower their price.