Subject:
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Re: No really - a rational discussion of people selling via eBay?
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Newsgroups:
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lugnet.market.theory
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Date:
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Wed, 19 May 1999 02:54:06 GMT
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Viewed:
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2042 times
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Frank Filz wrote in message <37419C9C.3D6D@mindspring.com>...
:WHat I find objectionable (and what I think most people are actually
:complaining about) is hoarding not scalping. I think it is wrong for
:someone who has big pockets to go into a market and buy up all of
some
:item, and then turn around with one's effective monopoly and jack up
the
:price.
I can understand this argument and I think that it is the strongest
one to make.
But I don't think that it is strong enough in this case.
There is no way that anyone, including the owner of TLG, has a
monopoly on
certain Lego sets. These durable goods create a very competitive
secondary
(previously owned)market - competitive that is with the primary
(not-previously
owned) market. If monopolizing a given Lego set is the only way that
someone
can be a scalper then there are no scalpers on ebay. Just look at the
identies
of the people on ebay selling Technic Space Shuttles. There is no
monopoly there.
:I have no problem with someone who discovers some old sets lying
unsold
:in an obscure place, who purchases them, and then puts them up for
:auction. They are performing a real value add service. I also have no
:problem with someone deciding they no longer need an item they had
:bought, and re-sell it. I have no problem with someone who has 6
season
:tickets to a venue because they usually invite friends to use up
those 6
:seats, who then re-sell some of the seats when they aren't using them
:all. I also don't have a problem with people like Todd who buy a ton
of
:sets and break them down to sell parts, again, there is a value add,
:which costs the seller significant extra effort. If the effort was
low
:enough to be able to sell individual pieces at a price which wouldn't
:drive people away, and all that, Lego wouldn't sell sets. They would
:sell parts packs and idea books. And we would all be much happier.
:Unfortuanately, it is almost always cheaper to sell complete kits
:because there is a real cost for each part number caried in the
catalog,
:and each transaction.
I would be very surprised if it were really cheaper for TLG to sell
pieces
rather than sets. I think that sets generate more interest than do
bulk parts.
That extra interest results in more sales that more than compensates
for
the increased costs of producing sets. The extra cost of bulk piece
sales
is in the extra cost of handling both sets and separate parts. No
matter
who's right on this it is not the main issue in this thread.
:I wonder how many of the parts packs Lego sells
:are actually created to increase the production volume of those
parts,
:or some other economic reality, rather than altruism.
Given that TLG's profits are off sharply, I hope for all of our sake
that they
are not offering any products out of altruism, or we'll all be using
MegaBloks
soon. Companies may do altruistic things, but selling products
altruistically is
not one of them. Remember that infamous quote from Adam Smith,
something
like, "it is not out of benevolence that the butcher and baker supply
our needs
but out of a concern for their own self interest." (admittedly a very
loose
paraphrase)
:Of course some of the problems with collectible toys could be
resolved
:by the manufacturers and retailers running the auction. Of course the
:hoarders might still buy up all the toys and then turn around and
:re-auction them one at a time.
But that is almost what is happening. Manufacturers don't auction off
large
volumes of durable goods because as soon as they did so if they were
charging abnormally high prices then early purchasers would turn
around and
compete with them. Manufacturers of large volumes of products sell at
posted
prices because it is more efficient than trying to auction off a few
packages out
of hundreds of thousands at a time.
:One problem with "free market" economics is that there is no such
thing
:as a "perfect" free market, ...
Free market economics is not a discipline it is a philosophy. All I am
talking
about here is just basic supply and demand. No matter how regulated or
unregulated, how perfect or imperfect a market is, the forces of
supply and
demand work the same way.
: ... except possiby in very small, specific
:markets, which however are still large enough to support multiple
:producers.
Well, actually very small, specific markets are the most prone to
imperfection.
EG, monopolization in the beef industry in America was much more of a
problem when everyone was only supplied by a few local butchers,
before
refrigerated rail cars could ship beef around from places where
carcasses
were plenty to places where they were not.
That is what makes ebay so great, more sets are available because the
internet is able to create a larger market and even out the supply.
Sets that
TLG sold only in certain countries are much easier to get now than
before
ebay. And as Mike said, the large size of ebay with lots of potential
traders
attracts both buyers and sellers.
DJ Zorn
To locate scans of official instructions
for discontinued sets only go to:
http://www.kl.net/scans/
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