Froggy Girl Designs

A glimpse into my daily life of crafting, frugal living, and being a mom!

Monday, August 13, 2007

Brick & Mortar Retailers Trying to Curb Internet Reselling

I was recently passed a link to this story on About.com regarding retailer's views on those who purchase large amounts of discounted items to resell online. It is a very interesting article, although short and not very in depth. The premise is that traditionally brick and mortar sellers such as Coach handbags and Gymboree, are breaking down on those who "mass purchase" off of clearance racks.

I'll admit, I have been known to resell items I find on clearance on Ebay. Generally, my experience has been that I might make a buck or two, or lose money after fees and such. Really not worth my time. I do much better with yard sale type finds. Now, that being said, I can understand why retailers are upset about Average Jane making a profit on their goods. They would much rather have the money go in their pockets than the consumers. My issue with it is this, if they can't sell it at their own stores, and don't have the desire to sell it online themselves (yes, there are big box retailers who sell their own product on Ebay and the like), then why not allow their customers to make that money? Sales are sales, and their analysts are the ones who choose just how low they can price their items on clearance. It's all about supply and demand, and while Coach bags may not sell so well at the store in Podunk, Wisconsin due to lack of demand, that store may have the bag that three people on opposite edges of the globe just HAVE to have.

Major League Baseball has taken the plunge. For many years, people known as scalpers have bought tickets and then resold them at the gate, on the street, or online. This has been a widely frowned upon practice by "the powers that be". Stubhub, which is owned by Ebay, will be the channel for MLB to take charge and resell their unsold seats. Announced on August 2nd, the plan includes a 5 year deal which makes Stubhub the one in charge of secondary sales on not only the MLB site, but on individual team sites as well. Beginning next spring, the program will not require teams to have Stubhub sell their seats, but they will not be allowed to do it on their own from their own sites. This is the perfect illustration of what retailers should do if they don't want people reselling their items. It keeps the money in their pocket.

But, retailers are starting to employ a new tactic with internet resellers in an attempt to protect their "turf"-copyright infringement lawsuits. The average person who resells items on Ebay, and other like sites, is no millionaire. They are stay at home moms wanting to make some mad money, families trying to sell things to pay for that vacation they want, these are not people who have the money to go head first into a lengthy legal battle over the rights they have to resell something they purchased at the retailers posted asking price. One such case is that of SalonQuest, makers of Aquage shampoo, who have threatened various Ebay sellers with lawsuits if they did not cease and desist selling their products, and using their images, online. The outcome of that case is still pending.
Is it a case of biting the hand that feeds you? When retailers resort to legal threats against their consumers are they putting a bad taste for their brand in other consumers' mouths? Any way it goes, the retailers still get the brand recognition from the sales generated, whether it be through Ebay, their own stores, or wherever else; that is a good thing for them. Not everyone tries to find "deals" on Ebay, many will see an item they love that someone else is wearing/carrying/using, and go right to the stores or their website to buy it. It all pads their bottom line!

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