Arbitrage, not just for the big banks anymore.
What a weird story.
Why doesn’t the guy just sell on ebay himself for the same price (+ ebay fees) as amazon then just ship from amazon any sale he made on ebay? This will undercut any ebay arbitragers since they pay the same ebay fees while preventing returns that he claim is from people finding out they can get lower price on amazon.
that’s the $2.05 per unit it costs him to stock at Amazon’s warehouse, $12.06 in nonrefundable fees for Amazon to process a sale and $5.40 in return fees
does this mean the item costs $2.05 from the factory?
I think it’s a little silly to require every vendor to maintain a presence on every conceivable store front to prevent these shenanigans. The common refrain is that if you don’t sell things the way customers like, the customers will find some other way to be happy. But if we accept the story presented, customers are not necessarily benefiting from the arbitrage.
I won’t argue “something needs to be done”, but it’s unfortunate. If the arbitrage sellers think they’re bringing joy to the world, they should buy these products upfront, and then resell them instead of just being an order proxy.
But if we accept the story presented, customers are not necessarily benefiting from the arbitrage.
According to the story, these people are people who only buy stuff on ebay. So without the arbitragers they would never have access to the product in the first place.
There is value in bringing buyers and sellers together, and since the seller in this case doesn’t want to go to where a bunch of buyers are (ebay), somebody else does it for a fee.
The common refrain is that if you don’t sell things the way customers like, the customers will find some other way to be happy. But if we accept the story presented, customers are not necessarily benefiting from the arbitrage.
I think that theory is generally correct. The ebay customers are paying a “lazy tax” because like many consumers on the internet according to the article they didn’t shop around. I don’t thunk it unreasonable to expect the seller to also have a presence on ebay. At least the barrier to entry for ebay is quite low, I imagine it is harder to get onto amazon.
To beat the copyright infringement dead horse again, I think the accessibility is a big factor, if a service was say double what netflix is but offered drm free downloads, possibly on a private torrent tracker, I eould switch from netflix in a heartbeat. The company would also save substantially on networking costs.
I might seed a torrent out of the goodness of my own heart.
I would never do it for some other company’s profit.
If they gave me store credit for seeding, on the other hand, then we can talk.
This sounds like an idea for a startup.
The common refrain is that if you don’t sell things the way customers like, the customers will find some other way to be happy.
My initial thinking was that the eBay sellers in question were providing a valuable service, shipping Amazon-sold items to countries where Amazon might not (there’s a large portion of the globe where Amazon just won’t ship certain products). But if they’re using Amazon’s shipping then that’s not the case.
I’m not sure why he’s so annoyed by the arbitrageurs. He’s still selling his stuff at the price he wanted to sell it for! WHy does he care if somebody else is reselling it for more?
If you read further in the article, it’s causing an enormous spike in return rates, which loses him lots of money, because the products can’t be resold after return.
In other words, the original seller is made responsible for returns, not the reseller, so anything the reseller does is now the original seller’s responsibility.
Sounds like a problem with his return policy (which may be imposed on him by Amazon). If he can’t resell used versions, he should charge some high restocking fees of his own.
(Also why is the end user willing to pay a $10 restocking fee so they can save $5 by buying the Amazon version? Or did I misunderstand the example?)
I imagine at least some users return the item without considering the return fee. I’m sure that’s buried in the fine print.
Second, some users may just be angry at being cheated, and return the item without buying another. Don’t underestimate the spite of a scorned customer.
Are there that many people who check only e-bay, not bothering to do a web search and/or search amazon directly to find where the item is available for the lowest price?
You only have to look at the number of eBay auctions where people bid more on an auction listing than the Buy It Now price for the same item in another listing to realise that a lot of people are bad at price comparison. This isn’t helped by it requiring some effort to price compare across multiple sites, effort for which the payback can be minimal, particularly on low ticket items.
Good point. But this also means that the number of returns due to price checking should be low, no?
In this case it’s the Amazon packaging and invoice that triggers the customer to go and investigate, at which point they discover the lower price and return the item. I can only assume that until the item arrives they hadn’t even looked at Amazon.