[typicalrunt]

I grok capitalism and even like it. But there are times where it is difficult to like it. In this case, people rushed to buy this product for the sole purpose of reselling it for 8x. What's wrong with our society that some people can be so morally bankrupt and bereft of good sense.

In the end, I think these scalpers won't sell for 8x because anintendo will just pump out more product. Still, it is sad to see this happen.

[e40]

What's wrong with our society that some people can be so morally bankrupt and bereft of good sense.

This type of behavior is literally all around us. I recently listened to a podcast about this exact phenomenon. It featured a couple that had a special rug that drove cats crazy. They sold it on amazon for ~$35. A bunch of people bought them up and sold them on ebay for a lot more, using the drop-ship method (the reseller ordered it using their amazon account with the buyers shipping address).

When people realized they were being ripped off, they returned it to the original seller, who had to handle the claims due to requirements by amazon. They lost 10's of thousands of $$. The creator called some of the people doing this and they laughed him off, telling him they were doing nothing wrong.

It was on planet money's podcast, I think. I can try and find it if you're curious.

[toomuchtodo]

The problem isn't the arbitrage (which is a core component of capitalism and profit [1]) these people are utilizing, its Amazon's draconian policy towards sellers.

[1] Hat tip to patio11: https://news.ycombinator.com/item?id=9087930

> They're likely using one of the world's oldest business models: "Buy things for $1, sell them for $2."

[kbenson]

Episode 724: Cat Scam[1]

1: http://www.npr.org/sections/money/2016/09/14/493810206/episo...

[Lawtonfogle]

The problem is finding which point was wrong. What behavior was done here that should be discouraged or banned by society? People don't like the outcome, but where should the government intervene?

[savanaly]

I feel like if you truly groked capitalism, you would be able to point out lots of its flaws, but also to realize that scalping is definitely not one of them.

With supply limited like this, the optimal social outcome is for the X units produced to go to the X people in the world who would value them most, in other words the people who would be willing to pay the most (only exception I can think of to this is if someone values it at V dollars and only has a net worth of W dollars where W < V, but for the sums we're talking about with the NES I think almost everyone either has or can scrounge up V).

In the final accounting with reselling on amazon, the goods end up where they are most highly valued. Sure, if we held a lottery to see who gets to buy the NESs at the sticker price rather than auctioning them, the people winning the lottery would be more happy than the people who end up winning the auction. But as a whole, society would be impoverished since it's an inefficient distribution (no room to prove it in a HN post, but it's not too hard to work out on paper when tallying up the welfare of nintendo, the scalpers and all the people who get to buy the NES under one scenario or the other).

[typicalrunt]

I do understand capitalism, the point I made was that sometimes I don't have to like it. Scalping included.

I don't need to prove my knowledge to you by pointing out lots of capitalism's flaws. Instead of reading my comment carefully, you decided to teach me about how basic supply and demand operate. Jesus, you are a self-absorbed piece of work.

[jandrese]

Scalping is definitely sub-optimal. The reason being that it rewards a middleman, not the person doing the effort. It discourages labor.

A proper capitalist system for an event like a concert would have everybody enter bids for the seats, and once the venue fills up (or on the date of the event) the seats are assigned based on the bids. Of course if you're poor and the event is popular then capitalism says you're SOL. Money is everything and without money you are nothing.

One nice thing about this system is that prices are set by the people, not by the venue. People pay exactly what they think the performance is worth and no more. Artists get direct feedback as to how popular their act is.

[Chinjut]

The person willing to pay the most may not be the person who most desires it, considering the differing marginal utility of money across the vast spectrum of income/wealth inequality. Trump can buy on a lark what I would only shell out for as a matter of deepest, life-or-death desire.

(See also: https://www.currentaffairs.org/2016/10/do-economists-actuall..., http://www.demos.org/blog/12/23/14/when-inequality-ruins-ana..., http://www.interfluidity.com/v2/5822.html, and http://www.interfluidity.com/v2/5117.html for more on this same point)

[childifchaos]

How is this "morally bankrupt"? It's just smart. Every business on earth would do this in there sector if they had the chance.

What's wrong with a smart and clever individual buying this to resell at 8x? It's not hurting anyone, it's just a stupid retro console.

What's wrong with society? People are struggling and getting screwed over by governments and big business, they badly need income and here is a small opportunity to get a piece of that pie.

Ultimately someone that wants the product who is happy to pay the price that it is sold for, because they deem it worth that price, ends up with the product in there life. And someone else manages to profit to, to gain some much needed income so they can purchase something they want in there life.

Hardly morally bankrupt. There is no change in the outcome here. There are still the same amount of people with these consoles, enjoying them as before. Nobody is hurt.

In fact you could argue that someone doing this is a net gain, because two people gain instead of one. Someone made a profit that wouldn't otherwise and someone got the console they wanted (and obviously didn't care about the price)

[ferdbold]

We're not talking about "smart and clever individuals" here. We're talking about scalper bots gaming the system by buying all of the product literally seconds after the seller flipped the switch. This isn't fair for the consumer at all as the product has literally been taken hostage by some third-party with unfair advantage. It's the 21st century equivalent to plundering trade routes.

Also, I don't think the nature of the product has any influence on the morals of the practice, I find it despicable no matter what is being sold.

[derefr]

Market arbitrage is 'wrong' insofar as, if someone "deems [the product] worth that price", then the compensation for the created value should go to the people who created that value. To do otherwise is to deprive the market of the signalling tokens (dollars) it uses to propagate information about what things there should be more of, back to the people who make things.

The ultimate arbitrage, after all, is communism, where a central actor soaks up all the profits, and then is left with the responsibility of figuring out who should make more of what themselves, because hell if the producers know.

[eridius]

> It's not hurting anyone, it's just a stupid retro console.

It's hurting the people who are forced to pay $600 for a $60 item because they need one (e.g. a must-have gift for someone).

It's hurting the people who wanted to buy one for $60 but cannot afford to buy one for $600.

So yeah, it's hurting basically everybody who had any interest in buying the product.

[salmonet]

Nintendo deserves some of the blame. They most likely created this shortage on purpose to create press.

[crooked-v]

> bereft of good sense

Investing money in something that is nigh-guaranteed to have excellent returns is very good sense for anyone with the time and effort to spend on reselling the product.

[edgarvaldes]

And, let's be sincere here, this is not some essential item, like food or shelter.

[metaphor]

Agreed. It's quite sad that the impetus is on Nintendo to flood the market with product. As of this post, there were 3,800+ posts on eBay[1]; there's at least an entire page-full listing Buy It Now @ $1000 or more.

[1] http://www.ebay.com/sch/?_nkw=nes%20classic%20edition

[AndrewKemendo]

This is one way that markets clear prices when demand edges production. There's are many ways to do it, for example auctions. In this case the price sensitivity of the market is lower than the producer set, so the market is willing to pay more for the good than the product is selling it at.

When this pricing mismatch happens, there is the ability to close the pricing gap through repricing by a third party otherwise known as arbitrage.

This is one of the more important functional requirements for a market and the producer can take advantage of this based on how they price. Nintendo could have priced the system much higher and seen the same output but it may not have made as big if a splash, so really it's Nintendo driving this frenzy because they and all other major companies are good at this.

It's not a big it's a feature (really in this case).

[r00fus]

I really don't see why Nintendo didn't produce a bit more on launch - I mean, they're not some kickstarter newbie - don't they have some skills in demand-forecasting?

[jedberg]

When you hear about how the latest Nintendo is sold out everywhere, it makes you want one more.

They have slow production on purpose. If you could walk into any store and get one, it wouldn't be nearly as big a deal.

[Spooky23]

It spikes demand. Crazy parents run all over the place looking for it.

The winners are Nintendo, who gets sales in the 1Q, which is normally death for this kind of product, and the retailers, who get parents visiting daily and buying other crap.

My brother spent weeks looking for the "cream pie in the face game" last year. In the process, he picked up a half dozen other board games.

[TeMPOraL]

> What's wrong with our society that some people can be so morally bankrupt and bereft of good sense.

I don't know, but I shun, punish (by refusing to do business with them) and counter-market such people whenever I can. It's one thing to take a good and resell it for a larger price to a different audience; you're in essence making it more accessible and also take on some distribution headache, and thus deserve to cash in. That's how almost every brick and mortar store works. But it's another thing to buy off someone's stock only to turn around and resell it for more to the same customer base. That's, in my opinion, just plain sliminess.

[matwood]

> What's wrong with our society that some people can be so morally bankrupt and bereft of good sense. In the end, I think these scalpers won't sell for 8x because anintendo will just pump out more product. Still, it is sad to see this happen.

Morally? It's a video game. Scalpers are fine. Blame Nintendo for not making more of them or charging a higher price so the limited supply met demand. Everyone will have their NES Classic in a month or two.

[inimino]

Why do you think this is morally bankrupt? We aren't talking about wheat, but a superfluous luxury item. Where's the moral argument?

[nilved]

It might not have seemed that way in writing, but in reading your post is contradictory. If the motivation for a person to do this is lost on you, you don't grok capitalism; and if that bothers you, you don't like capitalism.

[z3t4]

With high margins more entreprenors will enter the market. But in this case nintendo have a monopoly.

[morgante]

What exactly is "morally bankrupt" about buying a mispriced good and reselling it at a proper price?

People get very morally righteous about scalping, but I don't understand why at all. Resellers are correcting a distortion in the market and providing a value-added service.

[pluma]

The only value they add is amplifying the scarcity.

How it normally works is this:

* Some person sells something locally for $x

* There is demand outside that location for the same product

* Someone buys the product locally for $x and sells it elsewhere for $y > $x

* Customers are provided access to a product they would otherwise not be aware of or not have access to, the reseller makes money from the margin, the producer can produce and sell more product, everybody wins

How it works in this case:

* Some person sells something for price $x at a limited quantity

* Someone buys up all the product for $x and resells it for $y > $x

* Customers are prevented from accessing the product at the original price, the reseller makes money from the margin, the producer doesn't gain any advantage, only the reseller wins

Can you honestly not see how this is different? It's morally bankrupt because it offers no value to anyone and entirely profits from the charity of the producer who sells a product below market value. And in the worst case the reseller ends up with tons of unsold product and is forced to dump it later or even throw it away completely (which depending on the margins may still turn a profit overall).