EBay can Be Cheap…OR NOT!

A funny, but true article on Nintendojo features the crazy auctions of eBay and why people will buy new or rare items at more than their retail price. 

Alright, let’s get one thing straight right off the bat: eBay is not a low-price shopping web portal. There are a lot of those out there — Overstock.com comes to mind — but that is not what eBay is, nor is it what it was intended to be. eBay is an auction Web site.

Now, that’s not to say that you can’t find a bargain on eBay. Over the two and a half years I’ve been using eBay to buy and sell my crap, I’ve gotten quite a good deal on a number of products. If you’re looking to buy blank CD’s, flash drives, memory sticks, even non-electronic items, you’d be kicking yourself if you didn’t check out the prices on eBay. But we all need to remember that this is just one facet of the auction powerhouse.

The primary function of eBay is to connect buyers and sellers in an auction format. “Auction� equals “goes to the highest bidder.� That definition alone should put to rest any thoughts that eBay is an end-all deal finder. Yes, you can get that shrink-wrapped copy of Legally Blonde 2 on DVD for $6 + shipping, but this is also the place that people spend hundreds or thousands of dollars on things like an ultra-rare import-only game title, an exclusive Precious Moments figurine or a Wide-Boy 64. In other words, just like in any market, you can get surplus items for dirt cheap, but you’ll pay through the roof for a rare find.

Right now, the Nintendo DS Lite is selling on eBay at rather astounding prices. The same thing happened in November 2005 when Microsoft’s Xbox 360 was released. The same thing happened when the original DS released (this writer overpaid by almost $60 for his). People are sometimes paying over a 100% premium for these items. But why? Because, when it comes to new gadgets, some people want to be the first on their block to own them.

Instead of all of this making the world a worse place to live in (as many pundits and editorialists would have you believe), the practices of eBay users are a legitimate way to expand a market that didn’t exist a decade ago. What makes this relatively new market so special and worthy of recognition is that it makes products available to consumers who want them, but do not have retail access. Now, to assume that this access would come without a price in a capitalist environment is insane…even more insane than the prices DS Lite is currently fetching online.

Before we go off on how horrible eBay sellers are for gouging these premium-paying buyers, remember, eBay is an auction Web site. The buyer decides the final price they pay, not the seller. Sellers that position their auction’s starting price well above retail quickly find out that they’re not getting too many bids, if any. Even mildly-seasoned eBay buyers know that hot, new items are going to cost more than at retail. If the price of early entry is worth it to the buyer, who are we to chastise the seller for taking the money someone decided to pay for the exclusivity of being first? They’ve used opportunity and market savvy to turn a profit. Sounds like an American dream to me.

It also sounds an awful lot like the complaints regarding Nintendo’s own hardware release practices. Some people have raised a stink that Nintendo released the new version of DS (and previously, GBA) in order to double-dip into early-adopter’s pockets. Nintendo fans usually respond to such an argument by saying that nobody is holding a gun to someone’s head forcing them to buy the updated hardware. Likewise, no eBay buyer is being forced to pay a premium to buy new hardware either.

Early-adopters use eBay as a tool to get the products they want now, not to bargain hunt. These two methods of shopping are not mutually exclusive. Anyone who’s going to pay hundreds of dollars for a videogame console in an online auction either has the money to burn, or knows enough about the product to weigh the costs and benefits of purchasing at various prices. If not, then what in the name of all great smurf are they doing buying stuff off of the internet?

http://www.nintendojo.com/editorials/view_item.php?1156196523

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