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.

Quote Originally Posted by jaydisc View Post
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.