The ethics of the resale

Market Dictates Price

 

OK. But that's not what you said in your prior post, where you wrote:

"I think anyone who purchases vinyl with the intention of reselling for profit is the epitome of a douche."

Seems you now agree this is a gray area. Or am I still not understanding you? Oh... and BTW, I'm not upset.

 

What I find fascinating is the combination of the hard-line capitalist ethos with the liberal "as long as it feels right" attitude.

 

Perhaps the simple conclusion is that Rhino is dumb -- D -U -M dumb. They are releasing fewer copies than the market desires. If they participated financially in the 'market frenzy' they are creating, then they'd be S-M-A-R-T.

They should simply print up 25 or 50% more copies, apparently. Or whatever the right number is.

 

I would guess the "still not understanding you" part.

My original post was meant to be somewhat hyperbolic in response to the post which I had quoted. It may also help if I replace douche with bottom-feeder.

 

Well I've read your posts and I've read ivan_wemple's posts and I'm not sure you actually understand your own position.

Eddie

 

What's confusing you?

I'd be happy to type slower if it'll help clear things up for you.

 

I think the idea here is ones making profit in order to run a business to supply a said product. There is a fair profit based upon the market. Competition among other things dictates this.

The other side of the profiting is not really in check. Its driven mainly by greed and who can get to it fastest and screw people over without conscience or boundries.

So, imo, there is a difference.

 

No I just find it funny how people start with the absolute declaration of, "if you buy to resell you're a douche/bottom feeder" and then go on to qualify it with stuff like "it's ok if you're making an honest living" type stuff. Clearly there's no absolute answer even if people think there is.

No idea what the definition of an honest living is in these situations of course. Maybe there's a mark up formula we're suppose to apply? Who knows? It's all so complicated. lol.

Here's what I do know, the price I'm willing to pay for a record is the price I'm willing to pay for that record. If I'll pay full market price of say $100, I really don't care if the person selling it to me bought it for $2 or $90. Would it suck if that person messed with the supply to artificially inflate the price of the record? Sure. I like a deal as much as the next guy. But the thing is I was always willing to pay $100 anyway.

Here's the thing...I think a lot of the shouting about ethics is nothing more than a smoke screen, generally speaking, of course. The reality is, if there's too many people out there buying those $100 records for $2 and then reselling them for $100 there's going to be less $100 records priced at $2 records out there for other people to buy. Which means they have to pay full market price if they want one, or spend even more time looking. So it's really not about ethics, generally speaking, it's about their own need to get an expensive record for a cheap price. If someone bought that $100 record for $2 and then sold it for $3 would anyone complain? How about $5? Doubt it. But $100? Yeah they're suddenly a douche/bottom-feeder. It's not about ethics its about getting something for a cheap price.

There's really not much of a difference between someone who buys a record for less than market price to listen to and then sells it for market price and the guy who buys it for cheap with the intention of selling it for more. The end result is still the same: paid little, sold for a lot, profit made.

Yes there are extreme situations like someone buying up 500 of the a 1000 limited run and then drip feeding them to the market at inflated prices, but that's about as common as someone buying a record for $2 because they know they can sell it for $100 in order to feed their starving kids. Does it happen? Probably, but no often enough for it to really be an issue either way. My guess anyway.

Eddie

 

it's business not charity...if a seller can get the highest price for an item and someone is willing to pay it...more power to them.

 

...I paid full retail for the special LIMITED EDITION BEATLES MONO box set...it's all matter of preference.

 

That may be true at the moment, however I am sure he is doing it to make money especially reissuing classic albums for the umpteenth time.

I am talking about his earlier days like when he bought the remaining stk of the Classic records Led Zeppelin albums, then tripled or quadrupled the price.

To me that is unethical.

Cheers

 

Just curious: what is the cutoff point under which it would not be unethical? Would it be OK if Kassem had sold those albums at just twice their original price, 50% above their original price, 25% above... ? I'm not trying to be snide, but I'd be interested in what profit (if any?) he should be able to make in this activity.

 

And if you can't see all the market forces, then it's not investing, it's speculating / gambling. That's what we have now in the housing market, since the continuance of current pricing trends depends entirely on what the government/Fed does. You don't know that, so your "investment" value is subject to the capricious whims of a brain trust. You can't properly invest in that situation.

Same with modern issue music. You may have a good idea what's out there right now, but you can't predict whether the supply will remain static. That's how anyone who "invested" in something like the Beatles mono box got burned. It's how anyone who bought one of those Big Star RSD "test pressings" on the open market got burned. It's how anyone who buys an out of print CD gets burned when it gets reissued. It's how people get burned when they buy a rare original of a CD and the Chinese counterfeit it and flood the market. You're speculating with these "investments" that the supply won't expand. Again, you can't properly invest in such a situation. You can only gamble.

 

IMO, as much as he can...

 

I hope you get a response to that question as well but here's another scenario.

Three years ago, when the 19-CD Sandy Denny box came out, I ordered a copy from Europe for about $200. By the time it arrived, it had already gone out of print and the asking price was over $300. I decided to wait before opening the set and a couple of months later the going price was up to around $500. That's when I decided that I really didn't need the box that much and put it up on eBay for an opening bid of 99 cents, with no reserve price. I took the risk of getting next to nothing for the set, at least theoretically, but it ended up selling for over $750 and attracted about 30 bidders. (Amazon currently has listings for 3 used copies for $1,099 to $1,200)

The question now is (1) what if I had listed my set for a fixed price of, say, $700? (2) what if I had ordered 5 or 10 copies and put them up for auction one after the other with a 99-cent opening bid?, (3) what if I had listed 5 or 10 copies for $700 each, one after the other? Are any of these possibilities unethical/"wrong"? Why? Should I have been required to either keep the set or sell it for only around $200 (my cost)? What if there had been low demand for the box and I got stuck with 5 or 10 copies?

 

At the time the Led Zep albums were readily available for around $30 retail price. Classic records went into some trouble, Chad/Acoustic Sounds bought the remaining inventory and started selling them at 3-4 times the original price and probably higher later on.

This pissed many people off at the time.

IMO, that is not ethical behaviour by any reputable retailer as the retail price should not be manipulated for pure greed and profit.

btw, no skin off my nose, as I had all ready bought them at normal retail prices.

 

Why the need to rationalize and minimize people's sense of honesty?

Hey, I was just accused of being rich by somebody else; if so, I could afford the $100 mark-up. But it's not about that.

Still, just to entertain your argument, you would be OK with a world where $2 records are routinely jacked up to $100? Where's the sense in that? Then only a select few would be able to enjoy the music - talk about turning it into a class issue!

 

If you set no reserve then you

By setting no reserve you actually found the market value. Nothing in this example qualifies as flipping, it is just good fortune. You did not manipulate to situation. You bought it to listen to and you sold it when you were done.

I am astounded it fetched so much.

 

With all due respect here, TT, I'm not sure you understand business. First of all, he isn't going to reisssue classic titles if there is no market for them! As long as there is a demand he can both fulfill the demand and make a gross profit from that portion of his business model. That is good both for his customer and for his business (the survival of which is also good for his customers).

Insofar as the "Remaining st[ac]k of Classic records" which (admittedly the price doubled or triple, or whatever it was in actuality), Mr. Kassem had to PAY MONEY for the acquisitiion of the Classic Records company. I have no idea of the specifics of the deal. But Classic would certainly have liked to maximize their return on the sale and Mr. Kassem was buying something MORE than just an iconic name! I.e., he was buying product.

Virtually simultaneously Mr. Kassem was expanding his business manyfold. He brought in legacy pressing equipment from other areas of the world, hired experts in vinyl production, hired engineers to modernize and maximize the equipment, and to top (?? probably not done at that point) it off, bought many, many thousands of feet of real estate and completely revamped both his production and warehouse facilities. All of that required a massive investment of capital and it came at a time when the vinyl market was showing some signs of life but that's all.

Nothing unethical about it in my view. I give Acoustic Sounds as much business as I can manage.

 

Only if it is allowed to operate without manipulation. There is also no such thing as a perfect market. There are many laws on the books to prohibit price manipulation, because there are countless ways to game the marketplace. The profit motive is a big incentive for scammers.

As with all of Academia much of what is taught in economics and business school is divorced from reality. There seems to be a religion of lassaiz-faire economics, but the Free Market is not a panacea.

 

Well said.

If you ever make it out my way, drinks are on me.

 

Would twice the original price have been OK? Just trying to see where the line is crossed.

 

When you deny a fellow music fan the same good deal you just got because "the market dictates it".

 

you own the item you can sell it for whatever price you want,