What is Scalping

[griffin]

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.

[jaydisc]

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

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)?

[dirge]

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.

[roller]

on a similiar topic, what is love???

[MV75]

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)?

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.
________
Mercedes-Benz 260 D

[TheDirtyDigger]

on a similiar topic, what is love???

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

[kurdt_the_goat]

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.

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?

[Kyle]

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?

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

Andrew, I was reading your post and agreed with everything until the last sentence. 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.

[kurdt_the_goat]

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.

[Kyle]

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.