I’m now realizing that I probably misinterpreted Gerald. I think he means people who set up an e-commerce site selling, say, a dog toy, at a higher price than you’d find on other e-commerce websites. If the customer buys it, the retail scalper orders the toy through the lower-priced page and has it shipped to the customer. If the customer wants to return it, they have the return sent to the original seller, who eats the cost of the return.
Effectively, the retail scalper is exploiting (if not stealing outright) the “free returns” offered by the original seller. This isn’t just about stockpiling, or putting in work to find underpriced goods and sell them for what they’re worth.
Instead, it’s about exploiting people who are bad at comparison shopping, and market norms that enable things like free return policies to exist. It raises prices for the consumer (who might naturally expect that the vendor they’re buying from isn’t a retail scalper), and imposes an hidden risk of extra costs on the seller. Consumers who realize they’ve overpaid for a product might return the version they bought through the retail scalper to the normal e-commerce vendor, and then turn around and buy it right back again from that vendor through the normal e-commerce site.
The best defense of it that I can make is that retail scalpers are adding a sort of “free advertising” for the product. Somehow, they’re identifying consumers who weren’t finding the cheaper prices on the normal e-commerce site, and convincing them to buy the product when they otherwise wouldn’t have. But I’m not compelled by that argument.
For some subset of retail scalpers, they can be seen as taking on the risk of engaging in low-trust e-commerce; I can certainly beat the prices I pay for many of the goods I purchase, but doing so greatly increases my risk profile to, for example, somebody stealing my identity / credit card information.
For others, they provide a kind of availability arbitrage, by providing access to the same goods across multiple websites; I can pick the e-commerce portal I want to use, and trust that retail scalpers will ensure the goods I want to purchase will make it available there.
And for yet others, they are backing up purchases with their own reputation—pretty much every large retail company is reselling goods they purchased from companies in China which a buyer would be dubious about purchasing from; Etsy is full of resellers of Chinese goods in this fashion.
And on the subject of Etsy, there’s also the dubious service of X-laundering; one example being ethical laundering, where a reseller sells goods from companies that people wouldn’t purchase from themselves for ethical reasons; another example being status-good laundering, where a reseller sells goods that people purchase with the plausible misconception that the seller is handcrafting them. In all of these cases, the reseller is performing a service with regard to the original seller, and in some of these cases, the reseller may be performing a service for the end-consumer as well.
There’s a wide variety of defenses for the behavior, basically.
EDIT:
I’m now realizing that I probably misinterpreted Gerald. I think he means people who set up an e-commerce site selling, say, a dog toy, at a higher price than you’d find on other e-commerce websites. If the customer buys it, the retail scalper orders the toy through the lower-priced page and has it shipped to the customer. If the customer wants to return it, they have the return sent to the original seller, who eats the cost of the return.
Effectively, the retail scalper is exploiting (if not stealing outright) the “free returns” offered by the original seller. This isn’t just about stockpiling, or putting in work to find underpriced goods and sell them for what they’re worth.
Instead, it’s about exploiting people who are bad at comparison shopping, and market norms that enable things like free return policies to exist. It raises prices for the consumer (who might naturally expect that the vendor they’re buying from isn’t a retail scalper), and imposes an hidden risk of extra costs on the seller. Consumers who realize they’ve overpaid for a product might return the version they bought through the retail scalper to the normal e-commerce vendor, and then turn around and buy it right back again from that vendor through the normal e-commerce site.
The best defense of it that I can make is that retail scalpers are adding a sort of “free advertising” for the product. Somehow, they’re identifying consumers who weren’t finding the cheaper prices on the normal e-commerce site, and convincing them to buy the product when they otherwise wouldn’t have. But I’m not compelled by that argument.
For some subset of retail scalpers, they can be seen as taking on the risk of engaging in low-trust e-commerce; I can certainly beat the prices I pay for many of the goods I purchase, but doing so greatly increases my risk profile to, for example, somebody stealing my identity / credit card information.
For others, they provide a kind of availability arbitrage, by providing access to the same goods across multiple websites; I can pick the e-commerce portal I want to use, and trust that retail scalpers will ensure the goods I want to purchase will make it available there.
And for yet others, they are backing up purchases with their own reputation—pretty much every large retail company is reselling goods they purchased from companies in China which a buyer would be dubious about purchasing from; Etsy is full of resellers of Chinese goods in this fashion.
And on the subject of Etsy, there’s also the dubious service of X-laundering; one example being ethical laundering, where a reseller sells goods from companies that people wouldn’t purchase from themselves for ethical reasons; another example being status-good laundering, where a reseller sells goods that people purchase with the plausible misconception that the seller is handcrafting them. In all of these cases, the reseller is performing a service with regard to the original seller, and in some of these cases, the reseller may be performing a service for the end-consumer as well.
There’s a wide variety of defenses for the behavior, basically.