Toy Profiteers Take to eBay

Discussion
Dec 02, 2009
George Anderson

By
George Anderson

It’s not illegal to buy a product and then turn around and
sell it at a substantial premium on eBay. Of course, being a legal activity
doesn’t make it right. This year, once again, popular toys for the holidays
are being bought up by the opportunistic for resale to shoppers willing to
pay more.

A report by Wales Online found
Go Go Hamsters are being bought for around £9.95 each in stores and legitimate
websites and then resold for up to £60 as supplies dwindle.

Gary Grant, owner
of The Entertainer chain of toy stores and chairman of the Toy Retailers
Association in the U.K., said, "Since late
September, these toys have just caught everybody’s imagination and are selling
for vast amounts of money. In some cases it is the speculators that are causing
the shortages by buying six, eight or 24 at one time. This is restricting
the numbers available to genuine customers. And they are buying them to put
them straight on eBay at inflated prices."

Some shops in the U.K. are placing
limits on the number of hamsters individuals can buy to try and keep the
unscrupulous from cornering the market.

The supplier of the Go Go
Hamsters is telling consumers not to worry, saying more are on the way and
will be in stores in time for Christmas.

"People are seeing the products listed
as out-of-stock on websites, but that is going to be changing on a daily
basis. We are rushing around every day making deliveries,” said Jon Diver,
managing director at Character Options. “People
should not panic. There will be plenty of opportunities for consumers to
find stock at general retailers.”

Discussion
Questions: Does there need to be a law to prevent the buying up of popular
toys that are then re-sold at much higher prices on websites such as eBay
or is this a healthy supply-and-demand principle at work?

Please practice The RetailWire Golden Rule when submitting your comments.

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13 Comments on "Toy Profiteers Take to eBay"


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Steve Montgomery
Guest
11 years 5 months ago

While you may not like the entrepreneurial spirit of someone buying toys (and other goods) at retail and reselling them on eBay, it is not illegal nor should it be. If the items in question were not toys, and if we were not approaching the gift giving season, would this even be a news item? I don’t think so.

If retailers want to prevent people from buying up the supply, they can easily limit the purchase quantity. Yes, there are always those that will then go to multiple stores and others that will find ways to circumvent the limit, but this type of action would show that the retailers are trying to ensure everyone gets a chance to buy the item.

David Livingston
Guest
11 years 5 months ago

These eBay sellers are taking a big risk so there is no need for any laws restricting the commerce. Not everyone will be making a profit. Somebody will have a garage full of toys in January and no one to sell them to.

Doron Levy
Guest
Doron Levy
11 years 5 months ago

There is neither a law, nor a need for one, but I can tell you that major toy retailers are keeping strict tabs on what products are going on eBay. There is a good chance (and this comes from my internal LP contacts in the toy world) that brand name, sealed toys sold on eBay are stolen. This can come from either internal or external theft at the store level. If someone has Zhu Zhu Pets for sale and Walmart, TRU, Target and all other retailers are sold out, red flags pop up in my mind. This won’t prevent customers from purchasing these toys but it is cause for concern for merchants. I think we are going to see a banner year for shrink (and not in a good way) and most of the product will be fenced online.

Ryan Mathews
Guest
11 years 5 months ago

It is–and should be–a free market. If your child can’t live without electronic hamsters and you have the cash, you ought to be free to overpay for them if you want to. On the other hand, you may ask yourself why Jr. has a fondness for robotic rodents in the first place.

James Tenser
Guest
11 years 5 months ago

The key fact missing from this story: How much volume is accounted for by this re-sale activity?

Certainly it may be troubling to see one’s popular branded toy item marked up on eBay. But unless it adds up to big money, it may not be worth the time and attention of manufacturers.

Worth considering is that the holiday season is only a few weeks long. Any fad items purchased for speculative purposes but not sold by Dec. 24 are likely to remain property of the speculators–or be sold later at close-out prices.

An exception may be taken in the case of collectibles, like the Beanie Babies toys that may be largely responsible for the rise of eBay circa 2000. Readers will recall how secondary market speculation created a little market bubble for a time, that is now quite deflated.

Gene Detroyer
Guest
11 years 5 months ago

The fact that this is an issue is bizarre. This is free capitalism at its truest. Those folks who are reselling have taken the initiative to collect their inventory. They have gone to many stores, spent time locating the product and paid for it. It is their energy and most of all their risk. If someone wants to pay $60 for a $20 item, the difference becomes the value of the service that the original buyer is selling.

But more importantly, this is how capitalism should work. The same people who take the risk get the reward. Unfortunately, the system has evolved as we’ve all seen into lots of rewards and no risk for managers and lots of losses for those who have risked their capital–the stockholders.

If I was a Hamster hoarder and seller, I would have some concerns on being stuck with inventory in this new season of the perhaps rational shopper.

Bernice Hurst
Guest
11 years 5 months ago

This story (Nervous retailers, slow economy fueling holiday toy shortage) suggests that any shortages are self-inflicted wounds with nervous retailers under-stocking for fear of being over-stocked. I don’t think there has ever been a time in the history of the world when a speculator didn’t find a way to speculate. There is no sense at all in wasting time trying to pass a law agin it.

Herb Sorensen
Guest
11 years 5 months ago

It doesn’t matter whether it is a good idea or bad idea, or who wins. It is none of the government’s business. How could this question even be asked in a “free” society?

Forty years ago, my job required me to scan the Federal Register every day, for anything that might impact my employer. One of the first things I noticed was that a very large share of all proposed regulations were thinly disguised efforts by one business or group to disadvantage another business or group. And all in the transparently phony interest of “protecting the citizens,” who were quite uniformly being screwed.

It is simply not true that “business” is pro-free-enterprise. That should be the role of our elected representatives. There is obviously a lot of confusion on these matters, that lie at the heart of our freedom, and society.

Craig Sundstrom
Guest
11 years 5 months ago

Yes, I can just see it now: some do-gooder (read: busybody) representative finds a hapless family in his/her district who is too poor to afford a mechanical hamster for their dying little John or Jane, and proposes “J’s Law”…so this will never happen again!

Please, no. And I’m happy only 7% of RWers fell for it.

(The real question is: if these are really worth so much, why are they selling for so little?)

Paul R. Schottmiller
Guest
Paul R. Schottmiller
11 years 5 months ago

It would certainly be ironic if retailers wanted to pass a law to limit someone from buying something, marking it up, and then reselling it.

Might explain many of the people that line up and sleep out for “door busters.”

Ed Dennis
Guest
Ed Dennis
11 years 5 months ago

Purest form of capitalism. However, one must remember the Bass Brothers of Texas. They attempted to corner the silver market and drove silver prices to an all time high, but got caught with tons (literally) when the bottom fell out. Remember, you only make a profit when you sell. There has to be a fool on the buy side to make this work–don’t blame the seller!

Andy Prach
Guest
Andy Prach
11 years 5 months ago

There’s no risk for the eBay seller with their money. Sure it took some legwork and time. If the item doesn’t sell, they’ve got 90 days from purchase to get their full refund from the store they got ’em from.

Kai Clarke
Guest
11 years 5 months ago

This is capitalism at its finest. As supply dwindles and demand increases, pricing should be going up. By purchasing these products, in anticipation of this event, entrepreneurs are managing the marketplace for profit. This is what should be done and eBay allows for this to occur. It is simply an easy way for this to occur, given the limited access on many toys, and the minor limitations that eBay offers.

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