What is 'SCALPING' vs. 'RESELLING?' Who is to BLAME for Mass Produced LIMITED Collectibles?

[@DijaVlogsGames]

Good explanation, but I think the problem is not just the artificial scarcity, but the fact that the „scalpers“ artificially increase the demand. Companies try to assess demand by figuring out who is going to buy the product. When scalpers and resellers enter the market who have had no previous interest in the product it would be impossible to gauge how much to produce. That’s all assuming the manufacturers don‘t want to artificially limit supply.

[@grandgames5596]

You are on point and I truly appreciate how you're always trying to speak the closest words to the truth . You are an inspiration for this community, and you help us make better decisions for our beloved collectibles. Thank you Shawn.

[@ReservedInvestments]

You are so welcome.

[@victorysla]

Great video, Shawn!! I’m going to share this with Jimmy and Tommy!

[@ReservedInvestments]

Just make sure that Timmy, Kimmy, and Poindexter get a share too!

[@chrisl6238]

I think he missed the joke. Great comment!

[@heyhonpuds]

Ha, I didn't even notice his name till after reading your comment too

[@BoxingPrinceTV]

I don’t think ppl have an issue with someone selling their item for market price … it’s mainly that most of these ppl are buying up all the stock in store or using bots online . I think that’s scummy & have to agree

[@unstoppableExodia]

Yeah using bots to corner the market is scummy and completely different to savvy collectors buying extras on items they know could go up in value

[@proxyg4884]

I don't think I've seen hard proof of "bots" being used to successfully buy items. Ps5s for example, you just have to be lucky and fast to order them when in stock.

[@shaunludlow7144]

Was going to ask a question, but then you covered it right at the end. In Japan, due to low global supply of Bandai Gundam kits, to dissuade resellers they have been cutting open 1 of the inner bags to cut the value. What is you opinion on this, and do you think something similar could be done with other products facing similar supply issues? Btw great video as always!

[@8bitgoonies]

My two cents here, take the PS5, very hard to get at the moment, the reason is not Sony shorting the market on purpose, but a supply chain failure/chip shortage... thus making that a scalping situation correct?

[@michaelblatherwick5324]

The "toy collector community" loves to just ramrod their definition. When an item has an open order presale, where anyone can buy the item until a specific date, and then the price on delivery goes up, "it's scalping!" When demand for an 80s era toy like GIJoe goes up and prices adjust, "it's scalping!"

[@CMRetroGaming]

Great stuff as usual. I'm starting to notice more and more return-resellers, most often with new LEGO sets. They bought all of the AT-ST raiders sets when Giana Carano got in trouble then immediately tried to flip them for double the price. (MSRP $40) Once that didn't work, they returned the sets that they didn't sell to the stores before their "money back return dates." and now you can find them in most big box stores. The same thing happened this summer when the new Manadlorian Lego sets came out Specifically The Mandalorian Forge set which was a target exclusive. (Of course you can get it at the Lego store as well) but Target has not restocked yet and at one time they were selling for about $90 on ebay. (MSRP $29.99) The prices have dropped on eBay because most people believe they will restock them. But some of these resellers who bought them will return sets that they were unable to sell.

[@mattb7390]

As an LGS owner, I would have loved to have this video to show off at the release of Pokémon TCG Shining Fates. There were pitchforks galore as I price the product to market price (and even below that of my local competitors) after getting single-digit % of what I asked for. Was the shortage my fault as an LGS owner? Obviously not. Was the low supply a result of global supply/logistical issues? In part, yes. Could The Pokémon Company have delayed the release until supply was closer to demand? Absolutely! Would their shareholders have liked that when Q1 earnings reports came around? Not one bit.

[@pessithemystic]

Shawn I don’t agree with the example you gave regarding the gig tickets. Yes, in some scenarios people will no longer be able to attend and therefore CAN sell at a premium. But more often than not, I think you’ll find that people buy up tickets without absolutely no intention of going and only want to make money out of the demand. I don’t doubt the fact that if companies just upped their print runs then the scalping of mass produced collectibles wouldn’t be as much of a problem, I think you’re spot on with that. But until then, there’s absolutely no need for people to purchase several copies of a sell-out item to make a quick profit. It deprives actual fans of owning whatever the item may be and they’re forced to play into the hands of these people and pay double, maybe even triple, the RRP just to get one. I usually agree wholeheartedly with your work but I can’t with this one I afraid. Still not a poindexter though.

[@evanbailey877]

If what you're saying is true (and i know it is, because people buy up tickets all the time just to resell them outside the venue's entrance), then what Shawn said at the end of the video is the same thing. Whether it's 2 tickets just to resell or using bots to buy up 100 PS5's online, that is a person that is only buying something to resell at a premium because of demand. That is the true definition of a scalper.

[@paulcarlcards9050]

Ever since I stumbled across your channel, I've been devouring every video you've made and ordered every book you've recommended that I could find. In one of your Q&As, you mentioned that you subscribe to a lot of other KZbin channels, including Alpha Investments. I'm a big fan of Rudy's perspective too when he does the more financial/technical videos (like yours). I'm curious if you have any other KZbinrs similar to yourself or Rudy that you'd recommend. I love listening and learning while I work. Thanks for all your hard work on your channel.

[@powerlifting1012]

I scalped 22 of penguinz0 godslap comic books. I hope that the more he releases and the more fans of his comic books there are, my comic books should pop off.

[@mindfultruth5117]

Great points! Something i never thought of. Hopefully other collectors get to watch this video to further educate themselves and lessen the saltiness too when they miss out.

[@Clay3613]

You're forgetting the people who go to the stores early and buy out the whole stock of products. Oftentimes these collectibles will never be restocked by the retailer in-store.

[@ReservedInvestments]

And whose fault is that? The manufacturer. You just proved demand, but forgot supply...

[@FooPanda]

@@ReservedInvestments Counterpoint: Many stores put in place purchase limits that are not enforced. For example, Series 5 Amiibo Cards lauched on the 5th, with Target limiting how many a person could buy. This was unevenly enforced, with people walking out with well above the prescribed limit. Target is at fault.

[@nyc10ken]

Shawn, great video. I see you have a Rolex as the thumbnail yet you used other lower end collectibles as examples to discuss. In your follow up video, I would request you discuss the differences of these collectibles vs the luxury high-end collectibles (Rolex, Hermes etc). Also as far as who to blame is not so cut and clear, I would also consider the government debasing the currency with overprinting and handouts as another factor. If theres no demand for the products then the companies wouldnt need to limit supply.

[@ParallelUniversity]

It is almost impossible to get a new model steel Rolex at regular retail price. They are limited in production and everyone buys them up and resells them for twice their original cost

[@happyb6443]

It could alternatively be argued that for a given demand level, and a given production run, the producer declared an artificially low MSRP … and/or the retailer failed to disregard this artificially low MSRP (and put them up for sale at a price that was too low). Artificially low MSRPs trick consumers who can’t afford certain items into thinking that the item is within their affordable price range … and then when they can’t buy it at the MSRP, they feel like they were cheated of something that they “deserved”. In this case, the producer is to blame (as well) since they were trying to have their cake and eat it too.

[@Odinoian]

Very good content. I've always considered limited as a sales tactic, just like 3 for 2 in your local grocery store. It's suspicious how limited things are even though gaming is as big as ever. And I see your point but I still HATE SCALPEEEEERS!! 😂

[@splugereport]

I agree 100% and we just add that when people buy out every ticket and then double the price that's annoying and maybe unethical but it's the way unregulated markets operate. It's the reason so many failed Wall Street folks love collectibles! Just look at all the attempts people have made over the years to buy out certain magic cards just to raise the price. If you have the capital it can work! Sadly a lot of the Timmy's don't really have enough to do that and instead just have a basement of chilling reign ;)

[@dsmith3112]

I think this analysis is wrong. Consider the following scenario: Let's say Nintendo makes exactly one hundered limited edition consoles, and there are exactly one hundered people who organically want one, i.e. who want one to actually play with and enjoy it. And let's say Nintendo is charging a price that each of the buyers would consider fair and are willing to pay, and that matches the price of similar items sold in different contexts. One can say that Nintendo has exactly met demand in this case. Now lets say someone who has no interest in actually using the console steps in and buys up 50 of those consoles. That person has now artificially bottlenecked the market and is forcing the people with organic interest to pay an inflated price, even though theoretically there are exacly as many units available as people who want them. In other words, without the "scalper" there would be no problem. One can spin this further and think about how the demand level will react to the inflated price. Most likely some people will not be willing to pay, so the scalper will end up sitting on some unsold units, while some people will go without. The scalper will have to make up for this by squeezing the more affluent buyers. Nintendo could of course respond to this by making more units. But if they did so, then they would end up having produced surplus units that no one truly wants. This would be a non-optimal outcome, as these units would end up in landfills, i.e. amount to wasted resources and a surplus toll on the environment. In other words, the presence of the scalper is forcing either an overproduction of goods, or a scenario where some people will go without, and hence preventing the optimal outcome, which is producing exactly the number of units that matches demand. Any way you spin this, it is the scalper who artificially introduced a market deficiency here. By the way, we saw this play out nicely with the toiletpaper "shortages". There was never "not enough toiletpaper" for everyone

[@heyhonpuds]

Christ man give us two paragraphs at least

[@dsmith3112]

@@heyhonpuds Fixed it. Didn't know it was possible.

[@ReservedInvestments]

You cannot compare a daily use item like toilet paper to collectibles. NO ONE needs to buy a Nintendo Switch Lite or an Amiibo. People need to use toilet paper unless you want to use an alternative method to wipe...which I am not naming here...

[@dsmith3112]

@@ReservedInvestments 😅

[@dsmith3112]

Thanks for answering. I enjoy your channel.

[@bsilver9963]

Not sure I follow the logic of this. If I buy up seats that have a limited/fixed availability due to no fault of the supplier/venue, with the intention of reselling them at a profit, I'm probably a scalper. But if I buy up items that have limited availability due to the supplier intentionally limiting supply, with the intention of reselling them at a profit, I'm now considered a "reseller" and am off the hook because the supplier could have prevented this situation? Isn't this just shifting 100% of the blame to the larger offender? Am I not contributing to/compounding the supplier's manufactured scarcity? Do I really get a free pass taking part in this because someone else created the situation? Another problem is going to be that everyone's "line in the sand" will be different. I might have no problem buying an extra Switch to hold onto and make a few bucks, the guy next to me will find nothing wrong with buying the palette as it rolls out onto the floor. Is 99 Switches ok? 50? Please explain.

[@BenSchmerler]

Since you brought up the bots, I'm curious as to your opinion of Best Buy gatekeeping PS5s behind their $200 membership program. That seems sketchy to me in the sense that they know that bots are beating their ordering systems, so instead of dealing with it they are just profiting from it.

[@heyhonpuds]

This is a concept I've already grasped, and I've seen first hand people getting their knickers in a twist at the mere mention of it.

[@espeonage4096]

I am struggling with this topic a lot and I want to thank you for that. It makes one think. It might help to specify "blame" in this context. Blaming "fault" on these resellers, who we often refer to as scalpers, for the situation we entered in the Pokémon TCG market is shaky, I agree. It's not their fault that the production and allocation of product is so limited. However, they are manipulating demand by distorting the supply that consumers perceive. I blame them for that. They are using every means to cheat the system (just as you said, via bots etc.) to make ridiculous ROIs. I blame them for that. They are poisoning the togetherness within collectibles communities with said practices. I blame them for that. and much more... A dude, who buys three boxes and flips two of them.... well, drop in the ocean, who cares. A dude, who bot-empties stores, corrupts supply chains or simply goes to a store at 6am only to empty out entire shelves from toys with the intent to flip it with an insane profit.... I reserve my opinion to call them a-holes.

[@foresthill538]

Great perspective on scalping. It's just a part of different markets. It's an opportunity to make money off of the psyche of people who consume. Limited items produced = perceived scarcity from the buyer and demand usually increases from the buyers that feel like if they don't act now they won't get their hands on said limited items. Scarcity creates a feeling of urgency if you are a collector and/or consumer of a host of different hobbies.

[@desklaser]

The manufacturers are absolutely to blame yes, but the resellers hoarding massive amounts of stock are still massive assholes that are artificially manipulating the supply even more.

[@ReservedInvestments]

You just defined the collectibles market in a nut shell. Only in this case, Nintendo can make more special edition Switch Lites while ignoring trying to produce factory sealed vintage NES games. Both products are being hoarded though…

[@unstoppableExodia]

Could not agree with this video more. Nintendo is very selective about what items it rereleases and how they try to keep everyone happy but resellers aren’t creating the shortages, they’re just positioning themselves to be able to take advantage of it when it is no longer available through the primary market. Just this week I’ve noticed a change in the supply side of the equation. At the same time that a certain electronics boutique started cracking down on customers ordering multiples of a particular limited edition game Nintendo has out of nowhere announced they’re doing a second release of the animal crossing switch console and the Metroid dread amiibo with preorders being open immediately after being announced. Does that mean Nintendo could be trying to take a stand against resellers? Are they maybe copping some heat from customers over having to pay a big premium for items they missed out on

[@teetoo3790]

Cool explanation.

[@Frank-ro5bp]

What your saying here about artificial scarcity is exactly what Rolex do.

[@ReservedInvestments]

Hence the thumbnail.

[@gigiizzy5651]

"Resellers" of this type are involved in predatory unethical behavior. They are a 3rd party that contributes NOTHING to the chain of production. Instead, they create artificial demand that makes it harder and more expensive for the actual end customer from getting a product. By suggesting the solution is "printing to demand" you are asking is for the company to take the risk of overprinting a product and completely devaluing it from a collectors stand point as well. This reminds me of the same argument that is constantly made in the housing market, but it has been proven that simply "Building more houses" doesn't work. Raising interest, and sanctioning Taxes and regulations does. And maybe it's time for stores to actually enforce purchase limitations and for these scukbags that go around emptying shelves to get taxed for their sketchy source of income.

[@ReservedInvestments]

Most of these individuals do pay taxes on the profit made. So I’m not sure what the point is here…😳

[@mtfan]

Sony has actually started going direct-to-consumer with PS5 sales, offering them to people with existing PlayStation Network accounts via email promotion, so people who actually play have an opportunity to buy one at retail price. I think the hoarders have hurt Sony’s bottom line on software sales because the units simply weren’t making it into the hands of those who will use them.

[@extremegamercollector425]

FACTS!!! Great Video

[@bstoker9468]

Great video, thank you man

[@TOSStarTrek]

Mass Produced Scarcity. They are shorting the market to make sure they sell out.

[@ricardoblikman2676]

And I though Scalper referred to scaling like : john: "Damn all toilet paper sold out" scalper "I got some for you sir $100 a roll", John "100 bucks?!!!!! man you take the scalp of my head! i cant afford that for a sht there roughly 80 pieces of paper on a roll!"

[@pedsky]

Hey Shawn, do a video about NFTs!!!

[@ReservedInvestments]

Already did…

[@miatakid2]

It the artifical bottle neck of supply cause by the reseller that is why their hated.... in your story two of three got a product but in real life two went without do to the greedy nature of the first. That's why the hate is put on the reseller . It's all go back to the retro quote hate the game not the player

[@PotbellyPunch]

To be fair Nintendo did not have any history of continuing production of these limited edition systems until recently with the animal crossing switch bundle. In most cases in the past and even as recent as the Pokemon red/blue Nintendo new 3ds systems these systems were very limited and ended up gaining tons of value. Now I think anyone considering these should be wary of Nintendo's interest in continuing production.

[@ReservedInvestments]

The pandemic is what caused the continual production of the Animal Crossing system.

[@PotbellyPunch]

@@ReservedInvestments Curious about the logic behind that - did they see the bundle as being more attractive or somehow easier for them to produce than a basic system? My first thought would be that the animal crossing version requires a separate process to create so why not simplify and only produce the basic unit if the concern is volume of production?

[@pmera]

@@PotbellyPunch More attractive, definitely. People were going crazy for Animal Crossing... And that special edition doesn't even bundle the game! So they get people to buy the console AND the game separately. Evil geniuses!

[@AlexWoahWTF]

Great vid, too many Timmy's out here

[@creed5]

lol on the switch lite dialga/palkia design. I see this with the Pokemon Company regarding the limited set of "Champions Path" which was supposed to be a limited holiday set but they reprinted it in 3 waves

[@KeyKiller74]

Sony, Nintendo & Microsoft can't make millions of consoles a day you know you get a limited supply every month per store. Most people know the second market demands big bucks for them around the holiday's.

[@Dinnye01]

I had hoped for this topic for a long time :)

[@mlcash9]

Scalping is illegal and reselling isn't that's a big difference everyone forgets

[@Cookiedon15]

Thanks for covering this topic. I have a different take on the subject: For me, a reseller is someone who goes to, say, Alaska and buys ice from an ice vendor and finds a better market in Las Vegas to sell the ice. A scalper buys up the ice from the reseller and sells it at a premium. Of course, my anecdote doesn't consider the correct definitions of reseller and scalper. I say to just not buy from the person selling at a premium if you feel its somehow wrong.

[@nexiamania]

10th!

[@MarkFillmore]

I hear you on all this buddy - but I still don't like it.

[@mattstrott753]

This sounds like something a scalper would say. 🤣 Just kidding. Keep fighting the good fight educating the ignorant.

[@aaroncopeland5964]

I think a lot of production shortages happen for the simple reason that they don’t want to end up like Atari in the 80s, where they overproduced and undersold. They’d much rather keep the production numbers low and sell all that they make, and then they can start another run if they need to. On another note though, I’ve argued with people who have snatched up sealed copies of Xenoblade Chronicles 2 early in the year because they saw the prices going up and up, my point being that with it being a current system, there’s nothing stopping Nintendo from producing more of that game at any given time. I don’t think I’ll ever understand why someone would want to take a gamble like that where the supply numbers are so subject to change.

[@ArmandoMartinez-vs6eb]

It's the fault of the consumer/collector for not jumping on it on the drop day and buys into the FOMO and is left w/ no option but the secondary market.

[@chrisl6238]

MARKET MANIPULATORS !!!!!!!

[@ReservedInvestments]

The manufacturers? Yes, they are manipulating supply, hence manipulating the market.

[@chrisl6238]

@@ReservedInvestments Yes. YEESSSSS !!!!!