What is Scalping

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Originally Posted by TheDirtyDigger

I bought some Ult BB's before Christmas for $88 from Big W and got around $200 each for them on eBay BUT I started all my auctions at 99cents and there wasn't a shill bidder in sight.:)

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i did that too however started the price at the price i paid for them $99 from target

i sold 8 the highest going for $191 and lowest for $146 made about $550-600 all up however 70% of it would've been respent on transformers or nikes on ebay

5 of the 8 the people picked up from me and all of them were older women buying them for their own kids/grandchildren so i didn't feel so bad about it

but i also grabbed 5x 2008 BB Deluxes from Big W and sold em to board members at cost so im not all bad :p:)

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Originally Posted by griffin

I essentially agree with the first two (I pretty much said the same thing in my own posting above before reading yours), but the third is a bit subjective.

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Aye, I definitely can see where you're coming from. But I do think even though it is subjective it's a very important aspect. The law itself has to judge on many things which are inherently subjective. I agree we may disagree on detriment but I think it's very important to acknowledge it b/c it is the root cause of this discussion and any apprehension that the community as a whole has to scalpers.

In the US, as you noted, there has always been an extraordinarily righteous defence of scalping. It is very heated and I think that in itself is indicative of the fact that there is some underlying detriment. And any sidestepping of that b/c it is merely subjective avoids one of the core reasons for why this isn't just topical to TF fans but the broader community.

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Originally Posted by jaydisc

I think the term is used way to loosely.

Personally, I see very little different between:

1. Target, who buys toys from Hasbro at a certain price, and marks them up for profit.

2. An independent seller, that buys toys from Target at a certain price, and marks them up for profit.

3. A collector, that buys toys from anywhere and resells them 10 years later to pay for his child's education

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I think there are distinctions in that. An company is incorporated w/ the purpose of becoming a business to generate a profit. In it's course, it benefits many stakeholders and serves as a gatekeeper to maintaining the efficiency and integriy of our economic system.

By no means are companies moralistic vehicles. They have the capacity for dastard deeds and I don't think any of us would contend otherwise. However, that said many company's these days are increasingly sensitive to their moral compass as it not only affects their brand and market position, but it damages their bottom line. So to assert that they are faceless vehicles of profiteering is not a sustainable argument.

From major retailers, we are provided w/ a regulatory framework that governs the operations of the retailer. Scalpers on the other hand do not. They unlike retailers are selective about what they prey on. They only chase down items they can sell at a profit. Retailers offer a range of products. Scalpers only want the one product they can generate a hefty return for.

As for category 2, I have no dispute about being that constituting a scalper. Category 3 I think is very different. The person sold their collection years on to fund their child's education after having enjoyed what they purchased for its primary purpose. It's a TF toy. The fact that they later sell it on for value is not of their own making. They are simply profiting from forces beyond their control - not forces they are trying to control. They have had the pleasure of those toys - the primary purpose they bought those toys for. When they sell them, they should be entitled to. Scalpers do no such thing. They horde the toys for the purpose of manipulating the market mechanism.

As Digger rightly points out, we live in a capitalist society. That though does not mean we do not have community standards, that we do not have the right to exercise judgement and opinions as to what consitutes acceptable behaviour and what does not. Scalping is viewed with ire because it is behaviour that society as a whole regards as exploitative.

And whether or not you want to view it through the lens that society does, I don't think we can argue that pricing via constricting supply is predatory and exploitative. I think to stand behind the line of capitalism and rely on it for justification is insufficient. I think we as human beings are still capable of determining our own values and our own course of actions.

Certainly consumers are partially responsible but ultimately, as I contended above, sellers retain the final power. They exercise to their discretion the way and method in which they want to sell and the consumer is dependent on that. That is why ACCC laws exist, it is a recognition of the power imbalance between consumers and sellers. So I don't absolve consumers entirely but I do hold a seller to a higher degree of responsibility as they are ones at the heart of the act in the first place.

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Originally Posted by jaydisc

Now, am I a scalper for that? Should I not be able try to regain some of my shopping/hunting costs? Shouldn't I be able to recover those costs from those completely willing to pay (parents too busy to shop?) as opposed to my board brethren? I didn't constrain supply. I didn't mark up exorbitantly.

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Well, for me, you did scalp to a degree. Am I going to hold that against you? No. The scale of things matters as well. After all, you had what? Two sets? It is scalping but hey many of mates (and myself) do things that I'd consider morally dubious too. But its all about scale. We're not talking about a systematic scheme to profit from others.

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Originally Posted by jaydisc

Why is treating those who buy and resell TF any different from those that do the same with stocks or currency?

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It is very different. Stocks and currency are tightly regulated markets. The regulatory bodies behind these hold companies, investors and traders to account for misdeeds. Insider trading, which bases itself in information asymmetry, would be the equivalent of scalping. The market moves very hard and regulates itself in order to ensure it is efficient. Prices are signals to investors of changing demand, profitability or global phenomenon.

They do trade on arbitrages, I concde, but they're hardly predatory. They're based on market imperfections, interest rate differentials etc. And really, it is not the equivalent of scalping. You can't buy up stocks and hold onto them and sell at different prices to what the market itself is offering.

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Originally Posted by jaydisc

I think the term is used way to loosely.
Personally, I see very little different between:

1. Target, who buys toys from Hasbro at a certain price, and marks them up for profit.

2. An independent seller, that buys toys from Target at a certain price, and marks them up for profit.

3. A collector, that buys toys from anywhere and resells them 10 years later to pay for his child's education

I think many generically categorize everyone in group 2 as a scalper. It seems that you, specifically in the comments previously posted, lumped someone in group 3 as a scalper as well!

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I don't see how anyone in 1 or 3 can be classed as scalper. As much as we like to call TRU scalpers, it's just the way the corporate laws work in this country. The difference with 2, is that individuals or independent online stores (rarely though in AUS), harvest their items from 1 to limit the options of the people who would have otherwise bought from 1. 3 would never be classed as scalpers, because the items are not even currently or recently in release. Collectors originally aim to acquire items for themselves, with no immediate or short term intention to resell.
1 - retailer, small profit margin.
2 - scalper, large profit margin.
3 - collector, unintentional profit.

Boy have u started a can of worms. :p

This was actually a topic I was hoping to discuss in depth in a column I hope to start up soon btw. So you beat me to it. :mad:

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Originally Posted by jaydisc

You also say that markup to cover costs is acceptable, but unnecessary markups for no reason becomes scalping. I don't understand this. Every goods-based business is all about markup for profit.

Why is profiting off Transformers such a no-no? Why can used car lots by cheap used cars and mark them up? Why can a supermarket by cheap groceries mark it up? What makes markup on these toys so different?!?!

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Mark up is a representation of several things but one of the many things is the assumption of risk. Businesses take on risks to operate. Hence a large part of their mark up is a reflection of the risk they've taken on board in attempting to sell the product. It compensates them for that uncertainty.

Scalpers mark ups aren't that though. They are artificially entering the market, cornering it and them reaping the profits. If what they want to scalp has no value, they have a nice option of refunding it. Furthermore, they are contributing to inefficiency in the market b/c their mark up is not based on an apportionment of risk. Many prices reflect that. Scalper prices are inflated amounts that are predatory in their nature. They know the product they sell is a goldmine. That is by definition why their act is defined as scalping.

As for business practices, we have to draw a fine line here between equating scalpers and businesses. Businesses operate in a formal capacity under strict rules w/ many formal regulatory obligations. They are held accountable and have to account for the community. Scalpers are predatory and move in and out. Scalpers prey on consumers - that is how they exist. They exploit the demand for something but artificially inflating prices to above what they otherwise would be . Businesses though don't exist for that primary purpose. They are run to profit, certainly, but they can't afford to be predatory as ultimatley their brand and image is damaged.

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Originally Posted by jaydisc

Are you saying that a collector that suddenly decides to move on, possibly due to the birth of a child, or a higher interest rate on their mortgage, should be selling their toys at cost??!?!

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The Seller can do whatever they want to do with their collection - It's solely up to them. If they want to sell their toys to their Mates at good prices, so be it. If they want to scalp them off for top dollar on Demonbay, it's up to them.

From personal experience on this topic, back in January this year I decided to get rid of all my SW Lego (some 25 pieces altogether ranging from $20 to $600 monsters). I was planning to throw them all in the bin but I was told to put some ads in the local papers for a garage sale. I did that & three mums ended up buying all of them off me for a total of $520. To me that was a profit of $520 because (as I said) I was planning to throw them all in the bin.

I know that not everyone who decides to get rid of their toy collection thinks like me but (as I said) people can do whatever they wish with their collection - it's entirely up to them.

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Originally Posted by jaydisc

You also say that markup to cover costs is acceptable, but unnecessary markups for no reason becomes scalping. I don't understand this. Every goods-based business is all about markup for profit.

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How many toy stores actually make a decent profit on Ebay? Only one immediately comes to my mind = playidia. Sure there are plenty of people who have their own smaller toy stores on Ebay but do they make enough off these toys in that it becomes their full time job? I don't consider the guy I bought my sealed BW figures off as being a scalper in the same sense that I consider playidia as being a scalper - He's not even close to being in playidia's league. To me, his prices were very reasonable & he only had some 40-50 items altogether. On the other hand, Playidia currently have 3206 items for sale. Now, wouldn't you say Playidia is the Walmart of Toy Scalping? Isn't there something wrong with that?

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Originally Posted by jaydisc

Why is profiting off Transformers such a no-no? Why can used car lots by cheap used cars and mark them up? Why can a supermarket by cheap groceries mark it up? What makes markup on these toys so different?!?!

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I guess it all comes down to supply & demand.

If you asked someone in-the-know on used cars, they would probably have a tonne of differing opinions regarding reasonable prices on buying & selling them. The same thing could be applied to real estate agents, as well as Supermarkets & all the players who are involved in putting the groceries/fresh food on the shelves (eg. Growers/Middle Men eg. Kelloggs & Cadbury/Supermarkets). Depending on which of these groups you ask for their opinion, their answers will vary widely.

But I guess with Toys & more specifically TFs, you'd have to agree that we know way too much about TFs for our own good :D. But all we are is the TF consumer. If you asked the typical TF consumer for their opinion on pricing (be it either when purchasing from Hasbro/Big W-Target-TRU/Sellers online), I'm more than positive they would give you a completely opposite point of view than if you were to ask the exact same question to someone who sold TFs or any other toys in bulk. Marking-Up prices or the extreme marking-up of prices (aka. Scalping) occurs in every buy & sell market out there & it will continue to exist for as long as consumers purchase goods. I don't think the marking-up of prices or the extreme marking-up of prices (aka. scalping) will ever stop taking place & in the long run, there's not a whole lot we can do about it. :(





I don't think I should post any more replies on this particular thread - for my own sanity. :)

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Originally Posted by Pulse

back in January this year I decided to get rid of all my SW Lego [...] I was planning to throw them all in the bin

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I'm surprised you didn't think of me. :p

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I was planning to throw them all in the bin.

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Apart from being incredibly detrimental to the environment by putting all that petrochemical product into landfill, why would you not seek to recoup cash spent or even profit (scalping to some) from disposing of these items responsibly?
I don't know of many people so wealthy that they are willing to throw money in the bin.

Boy, did this topic have a rock star's life. A quick burst, followed by a sudden death.

Glad to see there are lots of different interpretations.

FWIW, a bit of a disclaimer, for the sake of perspective. I don't want you all to think I started this topic to get your approval to start a scalping business. The software industry is treating me just fine ;)

I, sell to board members at cost. I always have, and would like to say I always will. Now, when I say cost, I'm talking current releases. If I decided to sell some of my G1s, I'm not going to sell it at cost. And I'd wager that 99% of you wouldn't expect me to.

Because I'm such a chronic hunter and group buy organiser, If I look at the amount of toys I have bought on behalf of board members, I'd wager that that number nearly totals the size of my own, obviously small, collection. I'm sure many Melbournite and some others in other states can vouch for me in that regard. The Melbourne Missionaries thread is a great example.

Using MV75's definition, I am also a speculator. The best example of this, is that I am buying 2 x City Commanders, one to enjoy, and one to recoup the cost of the other's enjoyment. I apply a lot of this philosophy to my collecting, although I've yet to reap the rewards. Look for my next topic on that topic ;)

Anyway, my personal collecting styles is that while I am a completist, I try to keep all duplicate molds MISB. I also predict that one day, I will sell most of those MISB figures to pay for the loose figures that I will keep, play with, display and adore. I certainly expect to take advantage of the benefit of time, and I expect to profit off of these figures. At least that's how I rationalize it to girlfriend :D

Am I a scalper? I say no. Do you?

I don't think anyone would ever call you a scalper. Me tho, that's another story. :p

Jaydisc, why are you so hell bent on trying to bring retailers into this?

It's not like the average joe can go and buy the toys directly from hasbro. You have to buy them from a store unless you are buying on the same scale the stores are. What are you going to do with 1000 case assortments? Plus are you creating employment like the stores are?

The difference is that a store will not buy them all for itself. Can't find it? Go to another store. Too dear? Go to another store.

Now as for scalpers, they deliberatly create a shortage, thus a monopoly.

Plus you then have to fight over others for bids. Stores don't auction their goods typically at a store front.

I don't know why I even have to explain this.
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Ford India History

Scalping is more of a subjective assessment of a person in a certain situation, rather than an objective simple designation that covers all scenarios. It's more of a mentality by the individual or corporate body, that allows most of us to label someone (or some company) as a scalper. That scalper mentality is when a person (or company) charges more for a product or service because of added demand, often created by them in the first place, rather than charging the same price that covers their own standard profit margin reguadles of how much stock they have.
Retailers, even the big two (Coles and Woolworths) have a scalper mentality when it comes to their competitive behaviour. They will drive out the competition, and then raise their prices in their newly created monopoly. We wouldn't necessarily label them as scalpers, but it is the same principle, and technically they are scalping by taking advantage of their 'market position'. Generally though, stores like Target and Kmart, will have a national pricing structure, that covers their expenses and profit margins (usually about 40% on top of wholesale), and you can usually find the same price in any of their stores, no matter what their market position is.

The same applies to individuals. How an individual sells a particular item or toy, is how they will be perceived by others. If they have in their hands a rare item or their 'market position' is that they have a monopoly on that item, selling it for more than a reasonable profit margin would make them act like a scalper. It is difficult to draw a line on what exactly makes someone a scalper or not a scalper, but the way they operate and are perceived by the marketplace, is what labels them as a scalper. Some people might not seem like a scalper to everyone, but in a lot of cases it is easy to label a toy dealer as having a scalper mentality.

An example I noticed yesterday while browsing Robotkingdom - they sold out of their first batch of Animated Leader Cases (one Megatron, one Bulkhead), which they priced at US$105. The huge demand, which they even note on the page itself, has enticed them to raise the price on the next batch to US$114 (their wholesale price wouldn't have changed). They would have been making a significant amount of money off the original price, but now added an extra chunk of profit to each sale. That's scalper mentality. They don't need to be selling them at US$114, but because they are one of the first dealers with those toys, they are taking advantage of the demand while they can.
It might be argued that it is just the balance of supply and demand, but if the same happened at Target or Kmart or any department store chain that sells TFs, they'd never raise their prices on the next batch.

That's the difference between retailers and scalpers - the price doesn't fluxuate with demand at retail stores. Us consumers/collectors can rely on prices at retailers, but not with scalpers.
I guess one way of classifying a scalper is reliability of their pricing. If it is by auction or has unpredictable pricing due to demand, they are more likely to be a scalper.

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Originally Posted by MV75

Jaydisc, why are you so hell bent on trying to bring retailers into this?

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I've brought retailers into this, as I think we apply a double standard in a few cases, and I'm using them to illustrate a few of those.

I think that the term scalper is varyingly used to describe these four types:

1. (our favorite) Someone who reduces supply in order to increase demand and prices. This is clearly a scalper to me.

2. Someone who takes advantage of reduced supply and increased demand in order to increase prices. Now, when we are talking about a TF seller that does this, we call them a scalper. However, we accept that gas stations, supermarkets, and a bucketload of other business do this to us every day. As many illustrated, this is standard supply & demand. In the case of TF, it's scalping. I find this double standard fascinating.

3. Someone who acquires stock of Transformers from one avenue and marks them up for profit. Usually this involves an improved or differentiated distribution scheme. Now that might be a nationwide retail chain or an eBay dealer. I don't see a problem with those eBay dealers that get their stock from retailer's sales. They are adding an online delivery mechanism, and providing a shop-from-home experience. These things have value. Granted, I personally am not interested in the premium associated with them, but others are. I have brought retailers into this discussion as I fail to see the difference between the two situations, assuming that the non-retailers markup is fair (not 1. or 2.).

4. Finally, there is the collector or speculator who finally gets the opportunity to cash in. Unfortunately or fortunately, that is the nature of antiques or collectibles, and I think using the term, scalper, to describe anyone in this sector is just ridiculous.

So Im down with definition 1. I think definition 2 is accurate, but the double standard annoys me, and I object to 3 and 4.

Now, finally, the last point of hypocrisy that I'd like to raise, is based on Griffin's beautifully topical definition and example. Thank you Griffin! To me, this shows that we can lump Robot Kingdom (and most likely BBTS for that matter) into description 2. While they are not creating the shortage, they are truly taking advantage of it to increase prices.

Now I shop at Robot Kingdom, and as long as I, or anyone else aware of this situation, is to continue shopping at Robot Kingdom, I think they are as much a contributor to the rise and prevalence of scalping as those raising the prices. I wonder how many of the I-Hate-Scalper types will have the integrity and consistency to put their money where their mouth is and no longer shop there (or BBTS and most other online resellers for that matter)?

My issue is #1, really. #2 bothers me when it's a retail chain that drastically overcharges for exclusivety (TRU are the main culprits locally), but I wouldn't call that scalping.

#3 does provide a service, and I'm happy to pay someone a decent finder's fee if something would be otherwise unavailable to me for whatever reason. #4 also provides a service, in that they stockpile stuff and make it available later.

I don't object to (say) Robotkingdom charging stupid prices for early Animated figures, because they're not forcing people to pay more than they should - just pandering to impatience. I'm not saying it's "right", but I don't object since they're not trying to corner the entire market, but taking their cut as an early entrant.

on a similiar topic, what is love???

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Originally Posted by jaydisc

Now I shop at Robot Kingdom, and as long as I, or anyone else aware of this situation, is to continue shopping at Robot Kingdom, I think they are as much a contributor to the rise and prevalence of scalping as those raising the prices. I wonder how many of the I-Hate-Scalper types will have the integrity and consistency to put their money where their mouth is and no longer shop there (or BBTS and most other online resellers for that matter)?

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Ok, well said for everything, but for the quote above, you're only "contributing to the problem" if you buy those particular figures. Just wait, unless people are so cashed up and need them a week earlier than retail, then that's just sad really, because when everyone else has theirs, there is nothing special about the one they paid an extra $60-80 for. :D
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Mercedes-Benz 260 D

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Originally Posted by roller

on a similiar topic, what is love???

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Paying an extra $60-$80 for a figure to get it a week earlier.

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Originally Posted by griffin

An example I noticed yesterday while browsing Robotkingdom - they sold out of their first batch of Animated Leader Cases (one Megatron, one Bulkhead), which they priced at US$105. The huge demand, which they even note on the page itself, has enticed them to raise the price on the next batch to US$114 (their wholesale price wouldn't have changed). They would have been making a significant amount of money off the original price, but now added an extra chunk of profit to each sale. That's scalper mentality. They don't need to be selling them at US$114, but because they are one of the first dealers with those toys, they are taking advantage of the demand while they can.
It might be argued that it is just the balance of supply and demand, but if the same happened at Target or Kmart or any department store chain that sells TFs, they'd never raise their prices on the next batch.

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You can't really compare a single, online store with Target/Kmart. Customers don't expect them to raise their prices in response to demand because they have a reputation of not doing that - so they simply couldn't even if they wanted to. In all likelihood they also couldn't respond fast enough anyway (the lack of movie figures on shelves, and don't they all put their orders in months in advance?). An online small business can change prices in response to demand because they have no one to answer to. But, when raising prices they run the risk of people going elsewhere online (easier than getting in your car and driving to another shop to save a few bucks). Also the risk that like now, the toys hit retail locally - and the general risk that they put up the price to a point where demand says f**k you! (BBTS thundercracker not withstanding!). Consideringy leader megatron went for 350 to some moron in the states just a week before RK had them in stock, $5 US per leader is not scalping in my book!

The leader megatron, and voyager starscream i bought from them recently cost me less than what they'll retail for in Australia (and was early, and was shipped). Even at $114 it's better value. Sure it has a lot to do with the exchange rate... but, they deal with an online marketplace where oftentimes the price works out better than local retail - that's their business model. If they sold at those prices to HK people only, where the prices are probably ludicrously marked up, then you could say they're scalpers. Even then, they're obtaining them from hasbro direct, so they're not creating the demand themselves.

Should i point out that you can get a Leader Bulkhead shipped from RK for less than Kyle was offering in the sale forum the other day? :eek:

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Originally Posted by kurdt_the_goat

Should i point out that you can get a Leader Bulkhead shipped from RK for less than Kyle was offering in the sale forum the other day? :eek:

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Great, now even my name is being thrown into this. :o

Andrew, I was reading your post and agreed with everything until the last sentence. :eek: Very "smart" comment but I don't believe that's a fair comparison. Considering that RK is a shop with a shop account to order Bulkhead from the HK distributor of Hasbro directly, while my friend does not have such an account and we get ours from various secondary sources.

If you do the math, RK's price of US $54.90 is good but you still have to add on the shipping. In the case of Bulkhead, considering my friend gets his from another retailer similar to RK who charges more than RK, the total we offered at US $80 (which we stated "postage included", and we always use registered airmail) was actually not that bad. Why not mention the fact that a number of other toys we offered in my thread (total + postage) were lower than RK, sometimes even before they add on their shipping? Examples such as Music Label Soundwave, Rumble/Frenzy earphones and the Revoltechs?

My friend can only offer what's available to him from the street or his own sources. We certainly cannot be responsible for what deals other people are offering. If what we have is lower than other people then great! If what we have is not lower than others then there's not much we can do about it.

I might as well use this post to talk about the CC kit situation as well. A week or two ago, another fan asked me how come RK is offering the CC kit at below the RRP of US $77 offered by TFSource and BBTS. All I know is that, if you are an online retailer, and you aren't selling at the RRP, then you aren't getting yours direct from the source FansProject. And I have no idea where else you're going to get your kits from.

Sorry mate, i didn't mean to slander or offend you. I agree your price is still good. I just bought it up cause the discussion was on the leader toys. The real point i was trying to make was that they only raised prices by a bit, compared to say this - Masterpiece Voltron for the low low price of $395. Of course this is never likely to sell but it's not stopping him from trying!

Perhaps a better example to illustrate, would be the awesome prices you got for the music label Soundwaves. Well below retail in japan, lots of people were quick to snap them up. No one accused anyone of scalping because they were all happy with the price. But, your friend wouldn't have offered it unless there was a margin for him, however small. So technically he's a scalper? No one cares about scalping unless the price gauge is huge and the desire for the toy strong enough to force them to buy it. I don't think you can accuse RK or you/your friend of scalping considering you/they are still offering a good deal relative to what's available.

Disclaimer: Paul at figuresdirect.com.au is a great guy and when his prices are right, a great place to shop at.

Scalping: Make what was originally available at local retail, disappear, and sell at high price.

Not Scalping: Make what was originally not available at local retail, available, and sell at low price.

These are only my own opinions, of what I believe. :o

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Originally Posted by kurdt_the_goat

So technically he's a scalper?

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So you were asking if my friend is a scalper, based on your own technical definition? :p

hmmmmmmmm a tough debate that im sure we will be discusing long into the twilight years.


Now im sure we'd all like to hear from 'Pete' and 'HeroicDecepticon' on this topic, over to you Lord Zed