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Amazon sells out of the NES Classic Edition in less than a minute

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Re: Amazon sells out of the NES Classic Edition in less than a minute

#81

Earlier quoted context omitted.

Traditionally, toy companies will have a "tent pole" item they hype up and sell out of before Christmas (originally Cabbage Patch Kids but later on Elmo, Wii, etc.) This forces parents to less desirable accessory products for Christmas. Mysteriously after Christmas the tent pole item is in stock. Eric Clark's book "The Real Toy Story" goes into the origin of this and other trends [1]. Nobody is really wild about the…

I'm not getting how a shortage helps the companies? (Do I have to buy your book to find out?..)

If they sell the hot item then they make only the margins for that one item. If they "sell out" of the hot item, then parents either buy an alternative (you can't just get your kid nothing for Christmas), or they buy the accessories for the hot item with a promise to get the hot item once it becomes available again. Then after Christmas, they actually get the hot item, because the kid still wants it (and their one friend who has it is really cool).

It spreads demand out over time and over their product line. Similar strategy as how airlines advertise cheap fares to get you to fly on them, but then offer upgrades, early-bird check-in, more leg-room, additional checked bags, alcohol on the plane, etc. to make money once they have your business.

Re: Amazon sells out of the NES Classic Edition in less than a minute

#82

Earlier quoted context omitted.

Traditionally, toy companies will have a "tent pole" item they hype up and sell out of before Christmas (originally Cabbage Patch Kids but later on Elmo, Wii, etc.) This forces parents to less desirable accessory products for Christmas. Mysteriously after Christmas the tent pole item is in stock. Eric Clark's book "The Real Toy Story" goes into the origin of this and other trends [1]. Nobody is really wild about the…

I'm not getting how a shortage helps the companies? (Do I have to buy your book to find out?..)

It's not my book. I'm just citing sources because I was very incredulous when I heard this is common practice.

It only works if you have THE hottest toy of the season - something like a product from Star Wars for instance - you create intense demand for the product but limit availability. Simultaneously you provide alternative, inferior substitute product(s) in the same franchise that's less desirable.

The parent HAS to get their child something for Christmas. The child is primed to want the desirable product. The parent drives over town looking for it. Exhausted settles on the substitute product with the promise the child will get the 'real' product after Christmas. The parent spends $50 on the substitute product before Christmas and $70 on the desirable product after Christmas. This nets the toy company $120 so they come out ahead rather than just making $70 had they stocked a large inventory of the desirable product.

Again. It reads like a conspiracy theory. I was surprised to find out it wasn't.

Re: Amazon sells out of the NES Classic Edition in less than a minute

#84

Why doesn't Nintendo just raise their prices to where supply equals demand? They're leaving So much money on the table for scalpers. Or why not first release an expensive limited edition while they scale up production?

Bad press.

Re: Amazon sells out of the NES Classic Edition in less than a minute

#85

Why doesn't Nintendo just raise their prices to where supply equals demand? They're leaving So much money on the table for scalpers. Or why not first release an expensive limited edition while they scale up production?

Because now they get to be on the news with a bunch of stories talking about how hot their new product is.

Re: Amazon sells out of the NES Classic Edition in less than a minute

#86
post #46

Earlier quoted context omitted.

That's very nearly the definition of luxury goods, given changes to elasticity with income, with it being explicitly so for veblen goods.

You can't just take any product, mark it up 10x, and call it a luxury good. People would laugh at you and buy the regular one. A luxury good has to have some reason to justify its luxury status. In this particular case, the $60 NES Classic is already a luxury good. Marking it up 10x doesn't make it more of a luxury good, it just either means people who actually want to use the damn thing can't afford to, or must pay…

http://www.barneys.com/product/golden-goose-distressed-super...

You would be surprised.

Re: Amazon sells out of the NES Classic Edition in less than a minute

#87
post #61
post #15

Earlier quoted context omitted.

Episode 724: Cat Scam[1] 1: http://www.npr.org/sections/money/2016/09/14/493810206/episo...

As a side note, that episode left me wondering why the original seller didn't open their own eBay store, listing the product at their desired price. I would have thought it would have effectively undercut the resellers and gain a large portion of the sales on eBay. Another note, Planet Money is pretty much my favourite "always on"* podcast. An podcast about economics might sound dull to some, but what a lot (maybe no…

> As a side note, that episode left me wondering why the original seller didn't open their own eBay store, listing the product at their desired price. I would have thought it would have effectively undercut the resellers and gain a large portion of the sales on eBay.

Yeah, as long as they were aggressive in making sure there were on multiple marketplaces, and came up first in searches, that would probably be the best response. The bit gain here isn't really the extra sales on the other marketplaces, it's the reduced returns which eat into their profits.

> Another note, Planet Money is pretty much my favourite "always on"* podcast. An podcast about economics might sound dull to some, but what a lot (maybe not on HN) people don't realise is "economics" is a really a study of human behaviour at the macro level, and a large part of human behaviour at the micro level.

Also one of my favorites. I also enjoy Freakonomics. For anyone that enjoys well produced podcasts, I highly recommend just about everything Gimlet Media produces. It was founded by one of the original founders of Planet Money (Alex Blumberg), and they've gotten quite few NPR alumni at this point (mostly from This American Life, which is basically a expert podcast production training ground at this point, Planet Money spawned from that as well). My current favorites are:

- Startup - Excellent. They've gone through a few seasons now. I recommend starting at the beginning.

- Reply All - For the most part excellent. They occasionally to into weird territory, but I laugh during their episodes quite often. The interplay between the hosts is great. Like friends that are kind of assholes to each other because they've been friends for so long, and you get a front row seat.

- Science Vs - A new favorite of mine. At first I wasn't sure what to make of the delivery, which is very campy, but now I think it's perfect for what can be fairly dry subject matter.

- Heavyweight - If you know who Jonathan Goldstein is, or have listened to This American Life enough to recognize his voice (and if you've heard it before, you probably will), you'll have a good idea of what you're in for. I recommend starting with Episode #2 to see if you like it, because it's amazing in both the names involved and the audacity of the idea. That said, I did tear up at the end of #1, as I have brothers of my own.

- Mystery Show - Also excellent, but no longer continuing. Another TIL alumni, Starlee Kine.

There's others in there too, which are all fairly good, but these, along with a smattering of others[1] I listen to are more than enough for me to handle. That said, Gimlet does have a triplet of new shows for their "fall lineup"[2], and some of those sound great too. Okay, that's enough about Gimlet, I've just been really happy about the quality of podcasts lately, and they've contributed a lot to that I think. Radiotopia seems to be the other (different) group that's got some quality content.

It's kind of amazing that since I only really listen to them when in the car, I sometimes look forward to running errands just so I get a few more minutes in to listen.

1: 99% Invisible, Criminal (I believe Gimlet hired one of the founders of this for one of their new shows), Real Time with Bill Maher, Still Untitled: The Adam Savage Project, The Memory Palace.

2: https://gimletmedia.com/2016/11/01/introducing-gimlets-fall-...

Re: Amazon sells out of the NES Classic Edition in less than a minute

#88

Why doesn't Nintendo just raise their prices to where supply equals demand? They're leaving So much money on the table for scalpers. Or why not first release an expensive limited edition while they scale up production?

Because the value of the free marketing they've just generated dwarfs the value that's being captured by scalpers.

Re: Amazon sells out of the NES Classic Edition in less than a minute

#89

Earlier quoted context omitted.

I'm not getting how a shortage helps the companies? (Do I have to buy your book to find out?..)

It's not my book. I'm just citing sources because I was very incredulous when I heard this is common practice. It only works if you have THE hottest toy of the season - something like a product from Star Wars for instance - you create intense demand for the product but limit availability. Simultaneously you provide alternative, inferior substitute product(s) in the same franchise that's less desirable. The parent HAS…

Thanks for explaining. So what is the inferior product in this case ?

Re: Amazon sells out of the NES Classic Edition in less than a minute

#90
post #24

Earlier quoted context omitted.

How is this "morally bankrupt"? It's just smart. Every business on earth would do this in there sector if they had the chance. What's wrong with a smart and clever individual buying this to resell at 8x? It's not hurting anyone, it's just a stupid retro console. What's wrong with society? People are struggling and getting screwed over by governments and big business, they badly need income and here is a small opportu…

Market arbitrage is 'wrong' insofar as, if someone "deems [the product] worth that price", then the compensation for the created value should go to the people who created that value. To do otherwise is to deprive the market of the signalling tokens (dollars) it uses to propagate information about what things there should be more of, back to the people who make things. The ultimate arbitrage, after all, is communism,…

The only people depriving the market of the signaling tokens are the sellers charging an price where they know that demand will far outstrip their ability to supply the product.

The market way to handle a small supply of a popular product is to charge a high price, so that purchases equal production. All the compensation goes to the people who created the value, and the people who value the product the most are the ones who are able to obtain it.

Of course, Nintendo doesn't want to charge $1,200 (or whatever) for this product, because it would make people upset. So they set an artificially low price and deal with shortages for a while. Or maybe the shortages are a feature, driving demand through perceived social pressure.

They're certainly allowed to do that. But that's Nintendo screwing with the market and trying to defy economics. Arbitrageurs are just putting things back the way they would naturally be.

Note how companies and industries which are not afraid to charge high prices for products in high demand rarely suffer from scalpers.

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