Making a profit on eBay

[Sir_Knight]

No supplier, distributer, re-seller, that I have ever heard of buys their items at full price at a retail outlet, and then goes to sell them at a markup to people who could just as easily buy them from the retail outlet themselves.

A product rarely goes from factory to store to consumer. It usually passes through some middlemen. What is wrong with the OP setting himself up as a re-seller if he can find the product cheaper and sell it at a price that others are selling it for?

 

[bobzills]

A lot of times I buy something and then find out thet it was being sold at a lower price somewhere else. In fact, that happened to me today. I didn’t really think that the seller was guilty of anything wrong, but I thought that it was my fault for not being more careful in checking out the prices.
there are a few stores that offer a low price guarantee, but you have to deal with the paperwork in order to get the lower price.

 

[Just_Lurking]

A product rarely goes from factory to store to consumer. It usually passes through some middlemen. What is wrong with the OP setting himself up as a re-seller if he can find the product cheaper and sell it at a price that others are selling it for?

Nothing, as long as he abides by the conditions of Catholic moral teaching. One way he can easily do this is by informing buyer’s of the Circuit City price.

Yes, middlemen are necessary. Yes, some middlemen behave morally. But that does not mean that all middlemen automatically get a pass from having to adhere to the requirements of Catholic morality.

 

[Just_Lurking]

I found the following in the book Business and Religion (see here). However, it relates to Protestant teaching:

Against Keayne stood the imposing figure of Reverend John Cotton (1585-1652). Cotton’s moral authority was preeminent. Cotton declaimed the “false principles” that had deformed Keayne’s business ethic:

1. That a man might sell as dear as he can, and buy as cheap as he can.
2. If a man lose by casualty of sea, etc., in some of his commodities, he may raise the price of the rest.
3. That he may sell as he bought, though he paid too dear, etc., and though the commodity be fallen, etc.
4. That as a man may take the advantage of his own skill or ability, so he may of another’s ignorance or necessity.
5. Where one gives time for payment, he is to take like recompense of one as of another.

---

Point 4 seems to me to point out the key difference between moral middlemen and what the OP is asking about. Moral middlemen take advantage of their own skill and ability, whereas price gouging a Wii is taking advantage of the ignorance of another.

 

[Sir_Knight]

Nothing, as long as he abides by the conditions of Catholic moral teaching. One way he can easily do this is by informing buyer’s of the Circuit City price.

Other resellers do not disclose what they pay to their supplier and that is viewed as being fine. Why should he have to?

 

[newbetx]

I don’t think the problem has ANYTHING to do with disclosure. Anyone can understand the MSRP of the Wii and any additional items. Anyone that can buy from ebay has the ability to know what it is that they are buying.

The problem as I see it is the self proclaimed “middle man.” It is one thing to have something you no longer want and sell it to the highest bidder. Or to be a ligitimate distributer of a product. It is another thing altogether to prevent someone else from buying it at the retail outlet but offering it to them at a large profit because you have the power to do so. You can call it “wise” but I call it ugly. It’s direct manipulation of supply. The fact that hundreds do it everyday doesn’t make it right. And that there isn’t a specific law against it doesn’ t make it right. There are similar laws against similar activities.

Want to make some serious cash? Buy up oil futures and resell them. Or Silver. Corner the market! If you follow the letter of the law (or the lack of one) then as long as you make money, that’s all that matters, right? (Sarcasm intended.)

 

[bobzills]

Want to make some serious cash? Buy up oil futures and resell them. Or Silver. Corner the market! If you follow the letter of the law (or the lack of one) then as long as you make money, that’s all that matters, right? (Sarcasm intended.)

You are wrong because this is also the way to lose a lot of money as was found out by the Hunts and as well many others.

 

[jjb5985]

whereas price gouging a Wii is taking advantage of the ignorance of another.

This is where I take issue. You automatically assume ignorance, people pay high prices not neccessarily because they don’t know they can find it cheaper, but because they either can’t find it locally or want the convienence of internet shopping.

Anytime I pay a higher price at one store vs. another I am not ignorant to the fact that I may be able to buy it elsewhere cheaper because I always assume if I wanted to look hard enough it’s probably cheaper somewhere. I may even KNOW its cheaper somewhere else but sense I have other stuff I’m buying at this one store, I may just go ahead and purchase it instead of having to make multiple trips. I’m not neccessarily ignorant of lower prices. Price isn’t the only thing people take into account when buying and selling and I think that’s what trips people up.

 

[jjb5985]

The problem as I see it is the self proclaimed “middle man.” It is one thing to have something you no longer want and sell it to the highest bidder. Or to be a ligitimate distributer of a product. It is another thing altogether to prevent someone else from buying it at the retail outlet but offering it to them at a large profit because you have the power to do so. You can call it “wise” but I call it ugly. It’s direct manipulation of supply. The fact that hundreds do it everyday doesn’t make it right. And that there isn’t a specific law against it doesn’ t make it right. There are similar laws against similar activities.

I like to buy low and sell high. For instance, I may buy something at a garage sell and then sell higher on the internet. I provide a service. I may pay more for something on the internet as a buyer myself even when I can get it cheaper at a garage sale because I get the convienence of automatically finding what I want and having it shipped to me without wasting gas.

That being said, I personally don’t like buying up everything locally that someone else may want and then reselling it so no one else can get a good deal. For instance, if I see something on craigslist I already have but can resell, I may choose not to get it because I figure someone else may really want it and they don’t have a lot of money.

That being said, to buy locally and resell accross the country is providing a good service. You are making something available to those who may not find it at their local circuit city (or for used items classifieds, garage sales, flea markets, etc.) due to it being out of stock as well and providing shipment to their home address which the circuit city may not do. Hence, you get paid for finding who has the item, going to buy it for them, and then shipping it to their house. You are being paid extra for the service you provide, not the good itself.

Just like retail stores may charge extra for the fact that they provide convienence and the fact that you can walk out of the store with the item the same day, internet sellers may sell for a higher price because of their added convience of not having to leave the home and finding exactly what you want with a click of the mouse. It’s up to the buyer to decide when internet or local shopping is a better deal.

 

[newbetx]

That being said, to buy locally and resell accross the country is providing a good service. You are making something available to those who may not find it at their local circuit city (or for used items classifieds, garage sales, flea markets, etc.) due to it being out of stock as well and providing shipment to their home address which the circuit city may not do. Hence, you get paid for finding who has the item, going to buy it for them, and then shipping it to their house. You are being paid extra for the service you provide, not the good itself.

I respectfully dissagree. It is not our job to “redistribute” inventory at, “coincidently” a substantial profit to ourselves. The distribution network will take care of that.

And again, I have no problem with someone providing a service to someone that can’t get to the store when the product is in. The subtle difference to me is that it isn’t a “service” when you speculate that you will get a buyer for the product. If the person said "I will, for the price of $100 go and stand in line at midnight for a Wii for YOU. Then that would be OK. There is a specific buyer that the person is representing. And, the price may be negotiable for the service. Maybe someone else would do it for $95. Now THAT is capitalism. Hundreds or Thousands of people snatching up Wii’s on speculation while hundreds or thousands of legitimate customers waiting in line will come up empty is not, IMO, fair play.

There is a difference in providing a service to others and serving oneself.

 

[Sir_Knight]

I respectfully dissagree. It is not our job to “redistribute” inventory at, “coincidently” a substantial profit to ourselves. The distribution network will take care of that.

What distribution network? If people are willing to buy from him at his asking price, the distribution network hasn’t taken care of it and he is providing something that they wouldn’t be able to have at any cost.

And again, I have no problem with someone providing a service to someone that can’t get to the store when the product is in. The subtle difference to me is that it isn’t a “service” when you speculate that you will get a buyer for the product. If the person said "I will, for the price of $100 go and stand in line at midnight for a Wii for YOU. Then that would be OK.

Why not? With most services, the buyer doesn’t have a say in the matter. I had Sears come to my home today to fix my washing machine. I was told that the trip alone was going to cost $46 just to get a technicial to my door. I wasn’t able to bargin that price down. I either accepted it or they would not come. They pre-set the price of the service. What is wrong with him doing the same thing?

There is a specific buyer that the person is representing. And, the price may be negotiable for the service.

Why does the price have to be negotiable?

Maybe someone else would do it for $95. Now THAT is capitalism.

And if somebody else wants to go on E-bay and charge $5 less than what he is charging, there is nothing wrong with that either.

Hundreds or Thousands of people snatching up Wii’s on speculation while hundreds or thousands of legitimate customers waiting in line will come up empty is not, IMO, fair play.

Or, they could snatch up all of that and another company may come out with something better and nobody will be interested in Wii and they will be stuck with stuff that nobody will buy and they will be out all of that money. You pay your dues and you take your chances.

There is a difference in providing a service to others and serving oneself.

Please explain the difference.

 

[jjb5985]

I respectfully dissagree. It is not our job to “redistribute” inventory at, “coincidently” a substantial profit to ourselves. The distribution network will take care of that.

And again, I have no problem with someone providing a service to someone that can’t get to the store when the product is in. The subtle difference to me is that it isn’t a “service” when you speculate that you will get a buyer for the product. If the person said "I will, for the price of $100 go and stand in line at midnight for a Wii for YOU. Then that would be OK. There is a specific buyer that the person is representing. And, the price may be negotiable for the service. Maybe someone else would do it for $95. Now THAT is capitalism. Hundreds or Thousands of people snatching up Wii’s on speculation while hundreds or thousands of legitimate customers waiting in line will come up empty is not, IMO, fair play.

There is a difference in providing a service to others and serving oneself.

Just a note for anyone out there: I haven’t bought stuff at retail and resold at a higher price, but I will defend this in principle. I don’t like the idea of buying up all the good deals locally, but I’m not inherently against it either and in moderation you can do more good than harm. You can take the extra stuff locally and redistribute it to where it is scarce.

Would it be wrong to buy up every Wii and then keep them locked up in a room somewhere? I wouldn’t LIKE it if someone did that, but I can’t be against it in principle. At least resellers make it available again.

I don’t understand the difference between what you are saying is ok and what you are arguing against. As it has been point out, if the buyers don’t like my “convienence” charge, they can buy somewhere else or someone else will charge less so they take my business unless I lower my prices to match. The buyers always have the power to refuse a sale.

All that being said, I do think it isn’t a very nice (although that doesn’t mean its immoral) thing to buy everything up and then raise the prices. But to buy up a few things to make them available to others who can’t find them is arguely good. And regardless neither are wrong in principle. (although I would argue it could be when dealing with non-luxury items) Ultimately the seller can only sell back for what people will pay for it. If everyone refused to buy a wii at anything over $250, no one who was interested in making money would sell for more than $250. Therefore, buyers = the power, buyers = the price setters.

 

[jjb5985]

There is a Jimmy Akin response to that section of the CCC that was mentioned previously and to some issues in this thread.

jimmyakin.org/

 

[Caesar517]

The problem as I see it is the self proclaimed “middle man.” It is one thing to have something you no longer want and sell it to the highest bidder. Or to be a ligitimate distributer of a product. It is another thing altogether to prevent someone else from buying it at the retail outlet but offering it to them at a large profit because you have the power to do so. You can call it “wise” but I call it ugly. It’s direct manipulation of supply.

My father owns an awning business with which he manufactures and installs awnings. Retractable awnings are more complex, so he buys them from a supplier (who doesn’t install). He (and others) have an arrangement with this supplier: my father will only sell retractable awnings that come from this supplier and this supplier will not sell directly to consumers. This is how the business world works. Do you see a problem with this?

 

[Caesar517]

I respectfully dissagree. It is not our job to “redistribute” inventory at, “coincidently” a substantial profit to ourselves. The distribution network will take care of that.

If you buy something and sell it in a different location, then you are the distrubution network, or part of it.

And again, I have no problem with someone providing a service to someone that can’t get to the store when the product is in. The subtle difference to me is that it isn’t a “service” when you speculate that you will get a buyer for the product. If the person said "I will, for the price of $100 go and stand in line at midnight for a Wii for YOU. Then that would be OK. There is a specific buyer that the person is representing. And, the price may be negotiable for the service. Maybe someone else would do it for $95. Now THAT is capitalism. Hundreds or Thousands of people snatching up Wii’s on speculation while hundreds or thousands of legitimate customers waiting in line will come up empty is not, IMO, fair play.

What you are describing is a personalized, no-risk deal. unfortunately, that is also time consuming. What’s wrong with having a service ready before someone agrees to buy it? WalMart does it all the time. Walgreens can have the same products ready for me at a different price. All that is before I even know that those products are available.

There is a difference in providing a service to others and serving oneself.

The beauty of capitalism is that it lines those two up. Farmers don’t grow food to feed people, they grow food to sell it and make money. In the process, people have access to food. Same thing fos Wiis.

 

[Just_Lurking]

This is where I take issue. You automatically assume ignorance, people pay high prices not neccessarily because they don’t know they can find it cheaper, but because they either can’t find it locally or want the convienence of internet shopping.

I assume that, in the case of the Wii, there is a very reasonable likelihood of ignorance. But I believe that this can be handled by the seller stating in the eBay ad that the Wii is available directly from Circuit City for $250. If that is done, then it is certain that any transaction that still takes place is in conformity with the requirements of Catholic morality.

 

[Just_Lurking]

Other resellers do not disclose what they pay to their supplier and that is viewed as being fine. Why should he have to?

Sysco has a moral business model - they buy at slaughterhouse quantities, and sell to food service businesses at much smaller quantities.

Price gouging a Wii has an immoral business model - buy at full retail price, and sell at $100 markup to people who don’t know about the availability of the Wii at Circuit City.

Sysco is not taking advantage of the ignorance of the buyer, and so they do not need to disclose the price they pay. However, the slaughterhouse does disclose this price to the USDA anyway, and the USDA publishes this daily in a meat price report. The fact that Sysco still stays in business despite the public availability of this price information provides proof that their business model is moral, and they are not taking advantage of the ignorance of the buyer.

The Wii price gouger will most likely (not certainly, but most likely) be driven out of business if the information about the Circuit City price is made available to his buyers. This is exactly why his business model is immoral, and why he must disclose his price information to meet the requirements of Catholic morality of not taking advantage of the buyer’s ignorance.

Then, should the buyer be willing to pay $350 for the Wii anyway, there is no harm in disclosing the Circuit City price. Thus, in all circumstances, disclosing the Circuit City price is the moral course of action.

 

[jjb5985]

Sysco has a moral business model - they buy at slaughterhouse quantities, and sell to food service businesses at much smaller quantities.

Price gouging a Wii has an immoral business model - buy at full retail price, and sell at $100 markup to people who don’t know about the availability of the Wii at Circuit City.

Sysco is not taking advantage of the ignorance of the buyer, and so they do not need to disclose the price they pay. However, the slaughterhouse does disclose this price to the USDA anyway, and the USDA publishes this daily in a meat price report. The fact that Sysco still stays in business despite the public availability of this price information provides proof that their business model is moral, and they are not taking advantage of the ignorance of the buyer.

The Wii price gouger will most likely (not certainly, but most likely) be driven out of business if the information about the Circuit City price is made available to his buyers. This is exactly why his business model is immoral, and why he must disclose his price information to meet the requirements of Catholic morality of not taking advantage of the buyer’s ignorance.

Then, should the buyer be willing to pay $350 for the Wii anyway, there is no harm in disclosing the Circuit City price. Thus, in all circumstances, disclosing the Circuit City price is the moral course of action.

Jimmy Akin has commented on this and I think it would be good for everyone to read that. I wouldn’t say he settled it once and for all though as I’m sure this debate can continue.

What if the retail price was $250, but all Circuit City’s (and other electronic stores) sold it for $150 given many places charge less than retail, and the ebay seller sold it for $250 (after purchasing for $150) knowing virtually all electronic stores sold it cheaper. Would he still be required to disclose that info or would the fact that he’s not “breaking retail” (and certain stores may charge retail if only a minority) change anything?

 

[newbetx]

Originally Posted by newbetx forums.catholic-questions.org/images/buttons_cad/viewpost.gif
The problem as I see it is the self proclaimed “middle man.” It is one thing to have something you no longer want and sell it to the highest bidder. Or to be a ligitimate distributer of a product. It is another thing altogether to prevent someone else from buying it at the retail outlet but offering it to them at a large profit because you have the power to do so. You can call it “wise” but I call it ugly. It’s direct manipulation of supply.

My father owns an awning business with which he manufactures and installs awnings. Retractable awnings are more complex, so he buys them from a supplier (who doesn’t install). He (and others) have an arrangement with this supplier: my father will only sell retractable awnings that come from this supplier and this supplier will not sell directly to consumers. This is how the business world works. Do you see a problem with this?

Of course not. And you know it. :tsktsk: I never EVER said that the legitimate business’ aren’t entitled to their profit. There is an end of the chain between supplier and customer.

Your father is the end supplier of the service/product. Do you think your father would object if when showing up at a cutomer’s house or business, the neighbor came over and said… My friend here wants your product but I want to make some money. So since you are here I will act as an intermediary. You will get your price and I’ll take a “service charge” of $1000 from your customer.

Will your father be happy? Maybe. He got his profit. The customer? “Well what the heck. My neighbor comes over and does this same ‘deal’ with all my suppliers. He’s only trying to make a profit and what’s wrong with that, right? I’ll just have to pay the price because he’s there.” (Sarcasm of course.) Please. The neighbor inserted himself imporperly in the stream of goods for ONLY his self interest, NOT the convenience of the customer.

We can not object to ebay sellers whose business resides there and put items up for bid. IF they are the end supplier of the product. I.e., the “retail outlet”. They bought at wholesale and sell. Fine. And they are an approved seller of the product. Not like the Camera sellers that sell you a “new” camera that the company (Nikon, Cannon, etc.) won’t recognize as a legitimate retail outlet and not honor the warranty.

I will continue to state that if one takes advantage of a shortage (or manipulates supply, even by ONE unit, to create a shortage) to profit unreasonably, then it is immoral. There is not argument with the fact that Wii’s are in short supply. Otherwise, there wouldn’t be this profiteering going on. There are over 1300 on ebay right now. While it is not “organized” and therefore not regulated, it is still forcing up prices by taking advantage of the ignorance or hardship of another.

There is only ONE reason that you plan to do this. There is a market. A big one. A bunch of people have been trying to get a Wii from the retail outlets for 18 months. And they are always “out.” You are taking advantage of the **hardship **of these people. NOT providing of a “convenience” for those not wanting to drive to the local retail outlet.

Calling an alligator a “puppy” does not change the true nature of the alligator.

 

[Coder]

A circuit city near my house has them in stock for $250. The going price on eBay for a Wii is about $350.

My dilemma is whether or not it is wrong for me to try to make a profit when I would probably sell a Wii for about $350 to a person who could buy the Wii Bundle for the same price and get more items.

I don’t see the logic in worrying about that dilemna but ignoring the dilemna that you are marking it up $100 from a store price.

Solution: offer it for $300 + S&H.