What is Scalping

[Rampage]

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.

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

[STL]

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.

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.

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 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.

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.

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.

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

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.

[griffin]

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!

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.

[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.

[MV75]

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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