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‘Tis The Season For Price Gouging

From the Who's-gonna-know? Dept.

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Call it a consequence of the free market, the law of supply and demand, or just good old-fashioned opportunism. I’ll leave the ethics debate up to you. After all, is it really any different than selling Guitar Hero III for $9,000?

Tis The Season For Price Gouging

Maybe it just seems worse when a retail chain does it at Christmas time.

A Midwestern retail chain named Slackers was busted hiking up the price of Nintendo Wii game consoles and selling them on eBay instead of inside the store.

Ben Kuchera at Ars Technica did the busting, and quotes an employee tipster who says at his/her location, there were about 20 Wiis in stock, but none of them were placed on the racks. Instead, they were put up for auction on eBay, with an initial Buy It Now price of $499, lowered to $399 when product wasn’t moving.

The seller ended the listing early, presumably due to some bad press coverage.

The Nintendo Wii is smoking hot this holiday season after Nintendo goofed by not producing enough units. The company has gone as far as to stop advertising during the busiest shopping season of the year and to ask retailers not to force console bundles in light of the shortage.

While it seems like that might be a slick marketing move – creating rabid demand – others have astutely noted that the lack of availability may drive scores of would-be Wii owners to shell out the extra cash for an Xbox 360 or Playstation 3. 
 
 

‘Tis The Season For Price Gouging
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  • http://www.vendingrules.com/BulkVendingeBook.html Bulk Vending Guy

    Now before anything else is said I have to admit that I am a big time free-market avocate.  If free and open trade is present then how is any price "unfair".  Look at eBay, no one forced people to bid (althought I will agree that many bid were pure shills, people seeing if they can boost the price higher for fun).  How can that be "bad press"?  I look at it and say that the retailer is smart.  The retailer maximized his profit on an item by selling to the hungriest crowd.

    Now let’s take a look at the manufacturers.  I have to admit I do not understand their actions.  How could you be so far off on consumer demand?  And so consistently?  This situation does nothing for them, they look foolish and incompetent.  What is their motivation?

    OK, I’ll get off my soapbox now ;-)

    Charles

    • http://www.taylorscrubs.com Taylor Nursing Scrubs

      No, they are both to blame.  First, you have a manufacturer who loses money on every sale of a given gamebox – but they make good money on game licensing.  So they hype the machines, understock their suppliers and then flood the market at the hieght of the mania.

      Second, you have retailers who have a responsibility to their customers.  But instead of doing what is in the best interest of the customers or employees they rip-off all in the name of making a quick buck.