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Retail Store Scalping Wii Consoles on eBay
C0rinthian writes "ArsTechnica reports that the games retailer Slackers has been keeping their stock of the Nintendo Wii off their store shelves, and is instead selling the system on eBay for $400-500. (A $150-$250 markup)" This follows their look at the other side of the coin: why some retailers insist on Wii Bundles.
Nintendo doesn't want them to, but they have to be very careful about cutting off shipments or Nintendo could get busted for price fixing.
Ummm, price fixing is setting an artificially high price. If anything, Nintendo is dumping (selling below cost to gain market share).
In this case, the MSRP is much lower than market price. So why not charge the market price? That's capitalism.
Honestly if they're only making just below $4 I can't blame them for requiring bundles. In the article it says they're losing money if a customer uses a credit card but even if they don't you have to wonder how they can keep the doors open.
I kind of feel a little bit bad for small games stores right now even if I'm just a consumer with no real vested interest in making the prices higher.
In a capatilist society it should be possible to buy any item, no matter how rare, with rarer items being more expensive. Should we blame retailers for doing what economic theory expects them to do? When supply is low and demand is high price should rise until supply = demand.
2. Why doesn't the stores sell it for more than MSRP? The "S" does stand for "Suggested"
1) Because it makes MSRP effectively a price floor. Stores have little incentive to undercut each other if they're already making zero profit or a loss on the sale (still beneficial to sell em to get people through the door where they'll buy games and accessories).
2) Thats exactly what they're doing...selling em on eBay above MSRP.
Huh? You can go to any Best Buy or WalMart and buy a Wii that's not in a bundle. Or at least you could until they ran out of stock for the Christmas rush, but I'm sure if you stand around on the day they get their resupply that they'll sell you one in the regular retail box, which is nothing but the the console, one Wiimote, and Wii Sports, just fine.
Gamestop seem to be notorious for its bundling policies, but then again I think Gamestop is one notch up from a guy selling electronics and Persian rugs out of the back of a van.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
My guess is that the going eBay price has just drastically dropped because right now chances slim that it's going to make it to your doorstep by Xmas morning.
It's not dumping. It's well known that Nintendo makes a profit on every Wii sold at the MSRP.
Raw capitalism yes-- but not friendly capitalism. Raw capitalism will maximize profits but might cost nintendo a lot of good will.
For example- Sony pissed me off in 2001 and I have not bought another product from them since. So their short term gain resulted in probably $20,000 to $30,000 in lost sales.
Nintendo has been managing their market for a looooong time.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
What's up? Is their a particular component that is hard to come by or has a real low yield? To date, Nintendo's sold 12 million Wii's. That's a pretty strong demand for consoles. I'm not saying it's neverhappened, but I've never heard of a console selling over 10 million in its first year. Heck, the XBOX 360 has been out for two years and the Wii surpassed it in half hte time. If I'm right about the history of console sales, then the question I'd ask is: "What reason would Nintendo have to think they needed say.. double the amount of Wii consoles available?"
"I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)
"I have to buy a console and games? Boo hoo!"
Wow. Way to miss the point. Okay, here's a metaphor to help you comprehend the idea: Let's say you want to purchase an HD-DVD player. They sell for $200, but demand is high, so you cannot find them. Suddenly, you find one but it's $400 and comes with Gigli, Eps. 1-3, TMNT 3, King Kong, White Noise, and Deuce Bigalow.
Boo hoo.
"I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)
Yes, the "S" does stand for "suggested". It stands for suggested the same way cousin vinny "Suggests" you pay him back in a timely manner, or the way a mugger "suggests" you hand him your wallet.
I am all for Slackers selling them for the max profit. Price controls dont work. They hinder the market and cause problems. Just ask those in the south that needed their roofs fixed or needed generators after a hurricane.
Since price controls went into effect, it did two things. First it forced retailers to maintain artificially low prices for items such as batteries so that they ran out too quick. Instead of the price of a D cell jumping to say $6 each that would make a person say "hey, maybe I only need enough to get me through this by conserving my light" instead the first few bought all they could carry, forcing others to go without even if they had enough in thier hands to run thier light constantly for 3 months. So instead of alot of people getting what they NEEDED, you had a few greedy bastards that bought extra leaving others without. Generators? cant charge extra even if they had to be shipped in special(which costs more $$), so vendors didnt go through the hassle of getting the extra units down there. Why sell at a loss? They maintained the normal (inadequate) flow of materials because there was no monetary incetive to do otherwise. Once again, people went without.
Second, out of state contractors didnt have an incentive to travel to work, leaving the locals under-covered for construction workers. Instead of companies packing up and coming down with a "hey, due to teh demand, this is what it costs because of the demand, my travel expenses, etc." they were told by the gubment "you cant charge any more than the regular rate." so they said "psssh... screw that, I'll stay here instead of travelling down there to help and lose money." years later many roofs still had blue tarps because of the backlog. Even if somebody WANTED to pay more to get it done sooner, they couldnt (in theory).
They need to GTF outta da way and let the market decide. They'll make thier cash either way.
Retailers will charge no more than the market will bear. Nintendo wont see any less sales even if this is allowed. If the retailers cant move the units at $500, they'll drop the prices down until they DO move. Eventually the pricing will settle out and they'll sell briskly and at a reasonable amount. Eventually once production increases to match demand, or demand drops, they will be back to where the vendor wants them to be.