5 ms·

True, but as much as we HATE those guys who line up for the first Xbox360 / Wii / Playstaion 3 trying for the ebay flip, they are technically not doing evil. Th

by leelin 17y ago

True, but as much as we HATE those guys who line up for the first Xbox360 / Wii / Playstaion 3 trying for the ebay flip, they are technically not doing evil. The ebay flippers allow MSFT / Nintendo / PS3 to charge $1000 on launch day so that demand == supply, but the game companies won't do it for social / PR reasons.

codexon 17y ago
The ebay flippers allow MSFT / Nintendo / PS3 to charge $1000 on launch day so that demand == supply The only winner here is the scalper though. The customer Microsoft, Nintendo and Sony are put in a lose/lose position. The scalpers have the highest profit margin while the real fans who buy the extra games have $500+ less to support the companies that are bringing real value to the market.
- chops 17y ago
  The only winner here is the scalper though. The customer Microsoft, Nintendo and Sony are put in a lose/lose position. The customer has a choice on whether or not it's worth the purchase. To the customer who values the item (Wii/Sporting Event/whatever) over the (inflated) cost, it is a net gain, not a loss. To the person who doesn't value it above the asking price, they don't have to pay, and they don't have to get the item. I bought my Wii for an inflated price on eBay and I have no regrets about it. I have a friend who bought her Wii at an even more inflated price (almost double the asking price, if I remember correctly), and she also had no qualms about it. Furthermore, scalpers who wait in line for hours to buy tickets/game systems, and then flip it for profit are essentially providing a paid service to those who are too impatient, late, or otherwise incapable of buying said items when they go on sale, knowing that there is a limited supply that will not meet all the demand.
  - codexon 17y ago
    The customer has a choice on whether or not it's worth the purchase. To the customer who values the item (Wii/Sporting Event/whatever) over the (inflated) cost, it is a net gain, not a loss. That is too short sighted of an analysis. Too much value is being lost by unnecessary overhead. Have you noticed how overhead is something to be eliminated by every company except the middleman's themselves? With your reasoning, would it be a "net gain" for someone pay more for oxygen than you if some scalper managed to monopolize all the oxygen? There are probably plenty of people richer than you that would pay for the "true" (sarcasm) value of oxygen. Would it be a "net gain" for someone to buy up all the land and charge a million euros per square acre? Somehow, I think your answer to this question will still be yes, but I hope I've managed to convince everyone else. Furthermore, scalpers who wait in line for hours to buy tickets/game systems, and then flip it for profit are essentially providing a paid service to those who are too impatient, late, or otherwise incapable of buying said items when they go on sale, knowing that there is a limited supply that will not meet all the demand. There are plenty of people who were willing to buy it for the initial price instead of the inflated amount. The problem here is that you are using the broken window fallacy. Just because someone artificially jacked up the "demand" of an item doesn't mean that the item is really worth more. Take for example the recent housing bubble. People scalping houses forced the legitimate buyers to take out huge mortgages that they eventually couldn't pay off. If you think there was value added there, I don't know what will convince you.
    - yummyfajitas 17y ago
      House scalpers didn't force legitimate buyers to take out huge mortgages. The "legitimate buyers" (I assume you mean people who wish to consume housing) could have continued to rent. Most of the people who bought houses are also scalpers; they bought a house in the hopes that it would be worth more later. "Real estate never goes down!"
      - codexon 17y ago
        "House scalpers didn't force legitimate buyers to take out huge mortgages. The "legitimate buyers" (I assume you mean people who wish to consume housing) could have continued to rent." The cost of renting went up along with the boom and unsurprisingly went down with the bust. Everyone was forced to pay more except for those who already owned a home. Where do you think the leasers got their homes? Do you think that they wouldn't raise their prices when other options were priced much higher? "Most of the people who bought houses are also scalpers; they bought a house in the hopes that it would be worth more later. "Real estate never goes down!"" Hindsight is 20/20. During those economic conditions, you could either rent overpriced accommodations, or you could take out a mortgage with a lower % interest than how much homes were appreciating yearly. This was a ponzi scheme where the timing of the bubble was controlled by the financial giants' tolerance for risk. If you did not join in this fiasco, you risked losing purchasing power compared to everyone else. This is equivalent to you putting your money in a 0% interest account while everyone else puts it in a 5% interest account. I am willing to bet that the majority of the people here did not know when the bubble was going to burst, including most of you who are now saying that "those dumb speculators shouldn't have bought a home back then" (see how this is bad for liquidity if you can't buy a home for 3-4 years?). Scalping is also theoretically bad for the market. The market is not optimal when buyers are paying the maximum amount. In such a condition, you have decreased liquidity as buyers are forced to buy less since everything costs most of their money. You might just buy food and shelter, and try to be self sufficient on everything else. This is not conducive to a vibrant economy. The market is optimal when sellers are selling at their minimum amount. The ideal market thrives on competition. Liquidity is increased and you have incentives to use the extra money to drive other sectors of the industry. Take for example text messaging. It doesn't even cost 10 cents per message, and people would even pay 20 cents per message. But does that mean a text message is truly worth that much? Absolutely not! The phone company has lost that much interest into improving their existing services rather than trying to extract as much as they can from their consumers. Artificial scarcity only helps businesses/scalpers take advantage of the consumers.
- leelin 17y ago
  The only winner here is the scalper though. Even if true, we only say that after the fact when all the risk in the trade is gone and the profits banked. The trade could have gone badly and wasted the scalpers' time and money. If I remember correctly, there WAS a console flip fiasco in Boston (PS3 I think), where the scalpers who waited in line all night didn't wind up profiting. Edit: first link I found, probably many others... (http://kotaku.com/gaming/ps3/some-scalpers-give-up-return-ps3s-to-stores-224386.php http://kotaku.com/gaming/ps3/some-scalpers-give-up-return-ps...)
  - codexon 17y ago
    The problem with that assumption is that everyone already knew that consoles were being sold below cost and the scalpers knew they were in high demand. In the example you just pointed out, Sony just lost market share from that because the scalpers took those consoles away from legitimate gamers who may have even switched to the wii or xbox. And since we all know that the profit is mostly from the games, not the console, this was a lose/lose situation for Sony, the consumer, and in this case, the scalper.
- losvedir 17y ago
  The customer who wants to be among the first to get the console but doesn't want to wait in line is also a winner. You have to think of the value people assign to their time. The console flipper simply converts the price of the console from ($300 + 10 hours) to ($500). Think of it as the ultimate owner hiring the person to wait in line for $20/hr.

by leelin 17y ago

codexon 17y ago

The ebay flippers allow MSFT / Nintendo / PS3 to charge $1000 on launch day so that demand == supply The only winner here is the scalper though. The customer Microsoft, Nintendo and Sony are put in a lose/lose position. The scalpers have the highest profit margin while the real fans who buy the extra games have $500+ less to support the companies that are bringing real value to the market.

chops 17y ago
The only winner here is the scalper though. The customer Microsoft, Nintendo and Sony are put in a lose/lose position. The customer has a choice on whether or not it's worth the purchase. To the customer who values the item (Wii/Sporting Event/whatever) over the (inflated) cost, it is a net gain, not a loss. To the person who doesn't value it above the asking price, they don't have to pay, and they don't have to get the item. I bought my Wii for an inflated price on eBay and I have no regrets about it. I have a friend who bought her Wii at an even more inflated price (almost double the asking price, if I remember correctly), and she also had no qualms about it. Furthermore, scalpers who wait in line for hours to buy tickets/game systems, and then flip it for profit are essentially providing a paid service to those who are too impatient, late, or otherwise incapable of buying said items when they go on sale, knowing that there is a limited supply that will not meet all the demand.
- codexon 17y ago
  The customer has a choice on whether or not it's worth the purchase. To the customer who values the item (Wii/Sporting Event/whatever) over the (inflated) cost, it is a net gain, not a loss. That is too short sighted of an analysis. Too much value is being lost by unnecessary overhead. Have you noticed how overhead is something to be eliminated by every company except the middleman's themselves? With your reasoning, would it be a "net gain" for someone pay more for oxygen than you if some scalper managed to monopolize all the oxygen? There are probably plenty of people richer than you that would pay for the "true" (sarcasm) value of oxygen. Would it be a "net gain" for someone to buy up all the land and charge a million euros per square acre? Somehow, I think your answer to this question will still be yes, but I hope I've managed to convince everyone else. Furthermore, scalpers who wait in line for hours to buy tickets/game systems, and then flip it for profit are essentially providing a paid service to those who are too impatient, late, or otherwise incapable of buying said items when they go on sale, knowing that there is a limited supply that will not meet all the demand. There are plenty of people who were willing to buy it for the initial price instead of the inflated amount. The problem here is that you are using the broken window fallacy. Just because someone artificially jacked up the "demand" of an item doesn't mean that the item is really worth more. Take for example the recent housing bubble. People scalping houses forced the legitimate buyers to take out huge mortgages that they eventually couldn't pay off. If you think there was value added there, I don't know what will convince you.
  - yummyfajitas 17y ago
    House scalpers didn't force legitimate buyers to take out huge mortgages. The "legitimate buyers" (I assume you mean people who wish to consume housing) could have continued to rent. Most of the people who bought houses are also scalpers; they bought a house in the hopes that it would be worth more later. "Real estate never goes down!"
    - codexon 17y ago
      "House scalpers didn't force legitimate buyers to take out huge mortgages. The "legitimate buyers" (I assume you mean people who wish to consume housing) could have continued to rent." The cost of renting went up along with the boom and unsurprisingly went down with the bust. Everyone was forced to pay more except for those who already owned a home. Where do you think the leasers got their homes? Do you think that they wouldn't raise their prices when other options were priced much higher? "Most of the people who bought houses are also scalpers; they bought a house in the hopes that it would be worth more later. "Real estate never goes down!"" Hindsight is 20/20. During those economic conditions, you could either rent overpriced accommodations, or you could take out a mortgage with a lower % interest than how much homes were appreciating yearly. This was a ponzi scheme where the timing of the bubble was controlled by the financial giants' tolerance for risk. If you did not join in this fiasco, you risked losing purchasing power compared to everyone else. This is equivalent to you putting your money in a 0% interest account while everyone else puts it in a 5% interest account. I am willing to bet that the majority of the people here did not know when the bubble was going to burst, including most of you who are now saying that "those dumb speculators shouldn't have bought a home back then" (see how this is bad for liquidity if you can't buy a home for 3-4 years?). Scalping is also theoretically bad for the market. The market is not optimal when buyers are paying the maximum amount. In such a condition, you have decreased liquidity as buyers are forced to buy less since everything costs most of their money. You might just buy food and shelter, and try to be self sufficient on everything else. This is not conducive to a vibrant economy. The market is optimal when sellers are selling at their minimum amount. The ideal market thrives on competition. Liquidity is increased and you have incentives to use the extra money to drive other sectors of the industry. Take for example text messaging. It doesn't even cost 10 cents per message, and people would even pay 20 cents per message. But does that mean a text message is truly worth that much? Absolutely not! The phone company has lost that much interest into improving their existing services rather than trying to extract as much as they can from their consumers. Artificial scarcity only helps businesses/scalpers take advantage of the consumers.
leelin 17y ago
The only winner here is the scalper though. Even if true, we only say that after the fact when all the risk in the trade is gone and the profits banked. The trade could have gone badly and wasted the scalpers' time and money. If I remember correctly, there WAS a console flip fiasco in Boston (PS3 I think), where the scalpers who waited in line all night didn't wind up profiting. Edit: first link I found, probably many others... (http://kotaku.com/gaming/ps3/some-scalpers-give-up-return-ps3s-to-stores-224386.php http://kotaku.com/gaming/ps3/some-scalpers-give-up-return-ps...)
- codexon 17y ago
  The problem with that assumption is that everyone already knew that consoles were being sold below cost and the scalpers knew they were in high demand. In the example you just pointed out, Sony just lost market share from that because the scalpers took those consoles away from legitimate gamers who may have even switched to the wii or xbox. And since we all know that the profit is mostly from the games, not the console, this was a lose/lose situation for Sony, the consumer, and in this case, the scalper.
losvedir 17y ago
The customer who wants to be among the first to get the console but doesn't want to wait in line is also a winner. You have to think of the value people assign to their time. The console flipper simply converts the price of the console from ($300 + 10 hours) to ($500). Think of it as the ultimate owner hiring the person to wait in line for $20/hr.