What is Scalping

[TheDirtyDigger]

Despite everyone's (highly) subjective opinions, the hard truth is that this is a capitalist society we all live in and any seller can charge whatever the market is paying.
If obsessed consumers are willing to spend three times or more of the retail amount on a luxury item like a child's toy then it is to the good fortune of the seller.

[jaydisc]

Pulse, thank you for your kindness and I'm all about helping out my mates as well, as I'm sure many can attest to (though please don't )

Also, I'm happy to not change your opinion, and I'm very glad that your opinion has been added to the mix here.

I'd still like you to answer the specific questions I directed at you in response to the comments you linked to:

I don't know how some scalpers can do it. By Scalpers, I mean the ones who have amassed an amazing collection over the years (which began in 1984) & then one day decide to sell them all for as much as possible.

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??!?!

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?!?!

[STL]

Boy have u started a can of worms.

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.

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?!?!

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.

[Pulse]

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??!?!

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.

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.

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?

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?!?!

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 . 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.

[STL]

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

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

[TheDirtyDigger]

I was planning to throw them all in the bin.

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.

[jaydisc]

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

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

[STL]

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

[jaydisc]

Despite everyone's (highly) subjective opinions, the hard truth is that this is a capitalist society we all live in and any seller can charge whatever the market is paying.

Yes another great point. BMW is a very high margin business... as is Apple. Should they only be limiting themselves to make a few bucks? Apple is an even better example as if you compare them to any one else in their sector, they get CONSIDERABLY greater margins. Apple negotiates ruthless deals with Asian flash manufacturers for their iPods/iPhones and because they are buying in SUCH quantity, they get a much better price and reduce market supply, forcing competitors to pay higher prices! Yet, this is fair and acceptable business.

I think one of my key questions here is:

Why do we consider this market different? What are the DIFFERENTIATING characteristics??