Making a profit on eBay

[LutheranDK]

Well, I don’t know about American law, so I’m going to answer based on our laws. According to the law here (if I remember my lessons in Corporate Law correctly), people under 18 are unable to enter into any “contracts”, or buy anything in the price-range of what we’re speaking of here.
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Important addition to this, which slipped my mind earlier:

“…without the permission of parents/legal guardian”

 

[Feste_1242]

Price is supposed to be based on what has gone in to making the product and what the workers need to provide for themselves, not just what the market allows. In this case this individual is doing essential nothing except buying the thing and then selling it for 40% of the cost of the item. That seems like a high mark-up for gas-ing up the Chevy and driving to Target. Essentially he has done nothing worthy of the profit.

Price is what the seller is asking in exchange for his merchandise. It has nothing to do with what the seller has *earned; *there is no way to measure that. Buying and selling is simply trade: I have something you want, and if you give me $350, I’ll give it to you. The buyer has a choice. Nothing unjust about it.

This whole thread shows how sad capitalism is - it’s based on how much someone is willing to pay regardless if it is fair or just.

Capitalism really isn’t that bad; maybe you should learn more about it.

If I bought a Wii for $350 knowing I could probably find it in a store for $250 I’d be pretty unhappy and upset. It’s up to you to decide but consider the other person too.

Well you shouldn’t blame the seller, because it was your own fault.

So you’re judging the efforts of others to determine whether they deserve to make a profit? Dangerous ground.

Hahaha.

 

[Sir_Knight]

Where in the Catechism did you find this exception/loophole?

Recall that Jesus condemned the servant who took his master’s money and buried it but Christ praised the servant who MAXIMIZED the return on the money given to him.

 

[Peregrino]

Recall that Jesus condemned the servant who took his master’s money and buried it but Christ praised the servant who MAXIMIZED the return on the money given to him.

I seriously doubt that maximizing on the monetary return was the intended thrust of that parable…

I wonder if any of the money changers in the temple ever had the same bout of scruples as evidenced by the original poster.

Given the combination of Jesus’ comments about voluntary poverty and that the difficulty of the rich in entering heaven, I think we can at least conclude that Jesus was concerned with spiritual growth rather than economic growth. Would Jesus consider it wrong to conduct a transaction that intentionally exploits another person for their lack of knowledge?

Given Jesus’ emphasis of charity for others, would he buy the “market” argument made by many here that the other person is essentially stupid for not researching what s/he could get a Wii for?

 

[Catholic90]

Yes it is wrong and immoral. You’re abusing the situation and offering something to someone at an unfair price. You’re selling it for that price when you could tell them, “Hey you can go to X and get it for $250.” It’s not a fair practice and in my mind immoral. It’s unjust.

Pax Christi tecum.

It is up to the buyer to research the price. If someone is willing to pay the price, then there is nothing wrong with that. Store A sells shirts for $15. Store B sells identical shirts for $25. Is is wrong for Store B to do that? No - if customers are willing to pay that, then Store B can charge that. Will Store A sell more and make more money? That is what stores all over the US do every day!!

If someone has an item and asks a certain price, it is up to the buyer to research what the going rate is!

Nothing wrong or immoral. Nobody is MAKING anyone buy this Wii!

 

[Sir_Knight]

I seriously doubt that maximizing on the monetary return was the intended thrust of that parable…

I wonder if any of the money changers in the temple ever had the same bout of scruples as evidenced by the original poster.

Given the combination of Jesus’ comments about voluntary poverty and that the difficulty of the rich in entering heaven, I think we can at least conclude that Jesus was concerned with spiritual growth rather than economic growth. Would Jesus consider it wrong to conduct a transaction that intentionally exploits another person for their lack of knowledge?

Given Jesus’ emphasis of charity for others, would he buy the “market” argument made by many here that the other person is essentially stupid for not researching what s/he could get a Wii for?

Let’s take it one step further … would Jesus approve of any amount of money spent on things that we don’t need or would He recommend that we practice charity (as you pointed out) and obtain only what we need and give the rest to the poor?

 

[Sir_Knight]

I’m still waiting for an answer to my real-life question …

And what determines what a “fair” price is? I have two items in front of me. Item “A” has a SUGGESTED retail price of $49.95 and it cost me $33.33 to get. If I sell it at the SUGGESTED retail price, that will represent a 50% mark-up and a gross profit of $16.62. Item “B” has a SUGGESTED retail price of $29.99 and it cost me $15.00 to get. If I sell it at the SUGGESTED retail price, that will represent a 100% mark-up and a gross profit of $14.99.

Are those prices fair? They are the SUGGESTED retail price for the items. On item “A” I’m only making 50% while on item “B” I’m making 100% but the dollar amount that I’m making on item “B” is smaller than the dollar amount that I am making on item “A” even though the percentage is greater.

Are those prices fair? Who decides and what is the basis for that decision?

 

[Just_Lurking]

It is up to the buyer to research the price. If someone is willing to pay the price, then there is nothing wrong with that. Store A sells shirts for $15. Store B sells identical shirts for $25. Is is wrong for Store B to do that? No - if customers are willing to pay that, then Store B can charge that. Will Store A sell more and make more money? That is what stores all over the US do every day!!

If someone has an item and asks a certain price, it is up to the buyer to research what the going rate is!

Nothing wrong or immoral. Nobody is MAKING anyone buy this Wii!

So I guess the question boils down to which is a better source of moral teaching - the business practices of US stores, or the Catechism of the Catholic Church?

 

[Just_Lurking]

I’m still waiting for an answer to my real-life question …

According to the IRS (see here):

Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.

Interestingly enough, these are exactly the conditions from CCC 2409 - hardship and ignorance.

So the Catholic Church is teaching that a seller who charges more than the fair market value is acting immorally. I assume that the same applies to a buyer who pays less than the fair market value.

 

[Sir_Knight]

According to the IRS (see here):

Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.

Interestingly enough, these are exactly the conditions from CCC 2409 - hardship and ignorance.

So the Catholic Church is teaching that a seller who charges more than the fair market value is acting immorally. I assume that the same applies to a buyer who pays less than the fair market value.

Okay, let’s apply what you said to the opening post. Who is to say that the $250 that Circuit City charges is the fair market price and the $350 that Gamestop.com charge is to much and that it isn’t the other way around with the $350 that Gamestop.com charges being the fair market price and the $250 that Circuit City charges being less than the fair market value? And how is that determination made?

 

[goofyjim]

I may be joining this late but what could possibly be wrong with making a profit on ebay? That’s what the business is there for. Or are only corporations allowed to make profits?

 

[Just_Lurking]

Okay, let’s apply what you said to the opening post. Who is to say that the $250 that Circuit City charges is the fair market price and the $350 that Gamestop.com charge is to much and that it isn’t the other way around with the $350 that Gamestop.com charges being the fair market price and the $250 that Circuit City charges being less than the fair market value?

Hypothetically, suppose that $350 is the fair market value. Then there is no reason not to inform the buyer of the Circuit City price in the eBay ad. More realistically, suppose that $250 is the fair market value. Then the only moral course is to inform the buyer of the Circuit City price in the eBay ad. Either way, the proper course of action is clear - the seller should mention the Circuit City price in the eBay ad.

And how is that determination made?

The determination is made by making sure that both buyer and seller have a reasonable knowledge of the relevant facts, which include the Circuit City price. What’s so hard to understand about that?

The immorality comes from the seller taking advantage of the buyer’s ignorance. And all it takes to comply with the Catholic Church’s moral teaching is for the seller to inform the buyer of the extra information he already possesses to level the playing field. Then whatever price they both agree to will be acceptable.

 

[Sir_Knight]

If you tell your customer of a lower price elsewhere, nobody will buy from you at the higher price and if the lower price is below the fair market price, then you will be driving people away from the fair market price to a lower price; which, by your own reasoning earlier, is also wrong to have them buying at below the fair market price.

 

[strugglingalong]

If you tell your customer of a lower price elsewhere, nobody will buy from you at the higher price and if the lower price is below the fair market price, then you will be driving people away from the fair market price to a lower price; which, by your own reasoning earlier, is also wrong to have them buying at below the fair market price.

Well then by all means keep the truth from them to insure they will buy from you and find a softer pillow to help you sleep at night.

Pax Christi tecum.

 

[Sir_Knight]

Well then by all means keep the truth from them to insure they will buy from you and find a softer pillow to help you sleep at night.

Pax Christi tecum.

You are not understanding the entire concept of how middlemen work in business and the fact that there is no such thing as price – price is whatever somebody is willing to pay for something. When I go to Sears, they do not tell me what Wal-Mart is selling the same item for. Nor should they either legally or morally. They are charging me what they believe is a reasonable amount. If they charge me too much, they will make less sales. Their goal is to find that price will will maximize their profits.

As I pointed out earlier, Jesus praised the servant who MAXIMIZED his return on his master’s money but condemned the servant who failed to show a return.

 

[strugglingalong]

As I pointed out earlier, Jesus praised the servant who MAXIMIZED his return on his master’s money but condemned the servant who failed to show a return.

Jesus was using money as an analogy. He wasn’t teaching capitalists how to do business. That’s good to keep in mind.

Pax Christi tecum.

 

[Sir_Knight]

Are you saying that Jesus used as an analogy something that would not apply to the example itself? That would be a bit misleading and not something that one would expect from the “Great Teacher”.

 

[strugglingalong]

Are you saying that Jesus used as an analogy something that would not apply to the example itself? That would be a bit misleading and not something that one would expect from the “Great Teacher”.

No I guess you’re right but he’s not advocating injustice obviously and it is not just to maximize unlimited profits. Obviously everyone wants to make a profit.

I still see a problem with having to hide details of the deal. If everyone is okay with profits then you should be able to tell people: I bought it for x and will sell it for y. It seems problematic when you have to hide details as part of the deal. Charity is absolutely necessary in all things.

Pax Christi tecum.

 

[Sir_Knight]

I still see a problem with having to hide details of the deal. If everyone is okay with profits then you should be able to tell people: I bought it for x and will sell it for y. It seems problematic when you have to hide details as part of the deal. Charity is absolutely necessary in all things.

The problem lies in the fact that people may only see the difference between the two numbers – not taking into account various fixed costs such as franchise fees, delivery costs, processing fees, etc. All of that has to come from somewhere and it comes from the profit made on the sale. Additionally, some of these costs come directly from the item being sold (delivery is a percentage of the price, processing is a percentage of the price, etc.) but other costs (such as franchise fees, advertising costs, etc.) require a certain number of items to be sold just to cover those costs and break even.

Without knowing all of this information, a customer may think that the mark-up is too high when in reality, a person might be just breaking even if all of the facts are known and most customers are unwilling to sit down for 10-15 minutes and have the entire cost structure explained to them.

PS: You also have to factor in your time. If you are in sales, this is your source of income and in addition to just covering your costs, you need to generate a income for yourself. Just as if you had a hired worker and were expected to pay him/her a fair wage for the work that is being done in comparison to similar work, one should expect to draw at least the same salary for oneself from the sales generated.

 

[melensdad]

No I guess you’re right but he’s not advocating injustice obviously and it is not just to maximize unlimited profits. Obviously everyone wants to make a profit.

I still see a problem with having to hide details of the deal. If everyone is okay with profits then you should be able to tell people: I bought it for x and will sell it for y. It seems problematic when you have to hide details as part of the deal. Charity is absolutely necessary in all things.

Pax Christi tecum.

I’m really confused by this whole conversation.

Going away from Ebay and the Wii why not look at “hybrid” cars and cars with high fuel economy ratings.

The Toyota Prius is currently commanding prices of roughly $1000 above the “manufacturers suggested retail price” and even lightly used Toyota Prius cars are selling for more than they cost new.

Are the people who are selling these cars ‘hiding’ critical details during the selling process? I don’t think so. We have a long tradition of buying and selling cars at “market price” in this nation.

Back to Wii on Ebay or at Circuit City . . . they may be for sale at Circuit City , but they are almost never in stock at Circuit City! Selling a Wii at ‘market price’ on Ebay is no different than selling a car in your driveway at ‘market price.’ That said there may be some people who intentionally take advantage of other people when selling Wii video games, but that is no different than the few bad people who take advantage of others when selling cars. The bad actions of a few people should not condemn the honest practices of the many. The few people who are ‘duped’ because they don’t do their homework are not justification enough to condemn the ‘fair market price’ of goods, which is not set by a manufacturer but rather is set at consumer level who choose to pay higher prices because the demand is simply higher than the supply.