December 22nd, 2007
Retail Store Accused of Scalping Nintendo Wiis on eBay
By Michael Santo
Executive Editor, RealTechNews
Reports have surfaced around the web that a retail store in the Midwest, Slackers, is selling its allotment of Nintendo Wiis for a premium on eBay. Ars Technica broke the story but, in fact you can see a completed auction here, and the description of the store here. In the auction, the Wiis, which have an MSRP of $249, sold for $399.
Although Nintendo has gone to the extreme of working with GameStop to give out “rainchecks,” it’s still unable to keep up with demand. It’s also gone so far as to discourage retailers from bundles. And although it’s not unusual to see someone trying to flip something on eBay, a retailer doing so is uncommon, and frowned upon.
However, unless contractually required by Nintendo to sell the consoles at the MSRP, there’s little Nintendo can do to alter the practice, except perhaps stop alloting systems to Slackers.
On their website, Slackers responded to the allegations on Friday. Their statement, on their front page, says, in part:
Slackers is a small, 11 store chain in Missouri and Illinois selling music, movies and games. Slackers prides itself on its commitment to its customers, and offers great products with great service at a fair price. We are not big box, and our customers like that. They like that they get friendly, knowledgeable service when they come into our stores.
However, being small has its disadvantages. Unlike the big box retailers, we do not get an “allotment” from Nintendo. Rather, like all small independent retailers, we must buy our product from distributors. Since November of this year, the total number of Wii systems Slackers has been able to acquire from distributors this holiday season is 44 units – that’s it.
Does Slackers’ sell Wii systems on eBay? Yes. This holiday season, Slackers has sold a total of 5 Wii systems on eBay at a price of $399.99, while a couple units remain in stock.
We Say: The post goes on to indicate that the total profit from each eBay sale is less than $75. And while some will call this scalping, others will say it’s capitalism at its finest. What do you readers think?
SomeDumbGuy says:
I think that the shortage is most likely artificial to begin with, and if someone is dumb enough to pay 25% or more above MSRP then “There’s a sucker born every minute.” is as true now as it was when the phrase was coined by P.T. Barnum.
December 22nd, 2007 at 3:13 pm
Joe says:
Slackers is probably paying above retail for these from their distributor — the real profiteer here (and what’s wrong with a little profiteering, anyways? It’s not generators during a hurricane we’re talking about, it’s a GAME CONSOLE.). They should get what they can for these. And it’s stupid to say the shortage is artificial. Nintendo has left at least a billion dollars in sales on the table because they can’t meet demand over a year after introduction. The Wii is a lot more popular than anyone thought it would be. Everyone should quit being paranoid.
December 22nd, 2007 at 9:52 pm
Mike says:
I doubt that it’s a fake shortage to be honest, according to the latest figures on their production, they’re building 1.8 million a month worldwide. (60,000/day). they’re just selling like hotcakes. I hear that you can still find them in more rural areas, but nearly impossible in the big metro areas. I got lucky when I got mine in Phoenix Metro area. The shipment at my local electronics store was 40 units, and they were gone in 20 minutes, I got the 2nd to last 1.
December 23rd, 2007 at 6:25 am
Sean says:
Yeah, there’s no artificial shortage here. If a producer intentionally builds less than there is a demand for, they do it to be able to charge more per unit. Nintendo has not altered its price since introduction. Which suggests it’s not doing this on purpose. It doesn’t have to anyway if Wiis are selling for $400, Nintendo could charge that and possibly still sell every unit.
December 23rd, 2007 at 8:46 am
Steve says:
Its funny because I got a Wii at a Gamestop about 2 months ago without any problem whatsoever. I simply walked in, paid $249.99 and walked out with a sweet game console. I didn’t even realize there was a shortage until I had friends over who had spent hours waiting outside of that very same Gamestop last week only to be turned away as the last one was sold to the person in front of them.
December 23rd, 2007 at 9:30 am
Dave says:
Actually Nintendo has doubled their planned production twice since they released the Wii; They had planned on it being a hot seller, but they had no idea that it would be as much more popular than the other consoles as it apparently is - a couple of months ago I read an article saying they were outselling the XBOX360 22 to 1.
FYI, the shortage is clearly not artificial to drive profit as evidenced by the fact that - of the Big Three - Nintendo is the only one making a profit on the hardware at the base price.
Sony loses hundreds of dollars per PS3 they sell; likewise to a slightly smaller degree with Microsoft and the XBOX360. Nintendo, however, takes home about $60 every time they sell one at the MSRP, so they have no need to worry about driving up demand. In fact, they could drop the price to $199 and still be making $10 per box.
December 23rd, 2007 at 12:59 pm
OfficeDespot says:
Arbitrage, baby. Nothing wrong with making some $$$ off of disparate differences between separate markets.
At least they’re being honest about it. 5 systems sold on ebay @ $75 profit per system? That’s only $375 after ebay fees, and they also probably shell out some ducats on fed+state taxes as well. Also, with purchasing Wii’s from a distributor, they’re probably paying more per Wii than the bigboxes have to. Distro has to make their cut as well. I say meh.
December 23rd, 2007 at 11:57 pm
Prozac says:
What’s wrong with making $$$ in disparate markets? It’s dishonest and disingenuine. If they want to be an etailer, then go that way. But don’t keep a few in stock to cya in case you’re caught. It’s plain o;d greed, anyway you want to dress it; neither to be respected nor admired. “Get paid” seems to be the mantra these days. It’s nothing but one big black market. So some kid can’t get a Wii under his tree because his mom can’t afford the extra $$ on line and the store’s sold out. But it’s ok, it’s just business. It’s ok, I got mine. I thought games were fun and gave a child joy. Wake up folks. Merry freakin Christmas.
December 24th, 2007 at 4:46 am
me too says:
Is there really that much difference between one product and another? Look at the gas companies and the price change because of rumors, fears, or ‘anticipated’ changes. All work within the law of supply and demand - legal for sure, but moral? Perhaps that is another question?
December 24th, 2007 at 6:32 am
Jason Goatcher says:
I think Prozac is very appropriate name, since you need to destress a bit.
Nintendo Wiis are not a right. Heck, if you live in the United States, gasoline isn’t even a right. If people want to raise the price of a Wii, that IS a right.
Unless it involves a shortage of a super-necessary item, stores should be able to charge whatever they want. If WalMart wanted to charge $20 for a gallon of milk in a town with plenty of grocery stores charging normal price, then I would say go for it.
Capitalism means competition, which is good for the consumer.
December 24th, 2007 at 8:24 am
Goran says:
Many retailers use Ebay to sell their stock. Free markets set their price so if there is demand and people willing to pay the price, I don’t see anything wrong with selling to the highest bidder. The whole shortage mith is due to Nintendos low price. At higher price the current supply would be sufficient.
December 24th, 2007 at 12:59 pm
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