iPad pricing conundrum
March 15, 2012 10:07 AM Subscribe
Can anyone explain to me why used iPad 2s are selling like hotcakes on eBay for as much as $285 including shipping, when you can buy a new one, shipping included, for $300?
Where can you buy a new iPad 2, shipping included, for $300? The price from Apple is $399.
posted by alms at 10:22 AM on March 15, 2012 [4 favorites]
posted by alms at 10:22 AM on March 15, 2012 [4 favorites]
A lot of websites are offering a trade-in value of up to $350 for ipad 2's. Perhaps some people are scooping up the less than $300 ipads, then turning them in for the $350 trade in
Amazon's trade in page, for example.
posted by MansRiot at 10:24 AM on March 15, 2012 [1 favorite]
Amazon's trade in page, for example.
posted by MansRiot at 10:24 AM on March 15, 2012 [1 favorite]
I can't find a new iPad 2 for less than $399. If you have a source for new ones at $300, you should share!
posted by cnc at 10:24 AM on March 15, 2012
posted by cnc at 10:24 AM on March 15, 2012
refurb'd 2nd gen 16gigs are 299, maybe this is what the OP had in mind?
posted by elizardbits at 10:28 AM on March 15, 2012
posted by elizardbits at 10:28 AM on March 15, 2012
derp derp. that's 1st gen.
posted by elizardbits at 10:28 AM on March 15, 2012
posted by elizardbits at 10:28 AM on March 15, 2012
Best answer: People that live outside of the USA who don't have access to Apple products at the prices you are talking about, and who are going to try to duck customs fees (which are ruinous in many places in the world on electronics) by getting those shippers to mark the package as having an extremely low value. It's collaborative, distributed, p2p smuggling.
That's my theory about what drives a lot of crazy electronics prices on eBay, both because I have sold things on eBay like old iPhones for insane amounts of money, always to non-US destinations, and because I live in Argentina, where they tried to charge me $170 in import taxes for my free warranty replacement Kindle (original cost: $140) last week.
The lowest-end iPad 2 sells new for about USD$900 retail in Argentina, and Apple doesn't ship refurb iPad 2s to Argentina. Replacement Macbook Pro cords are $200 (I had to buy one a couple weeks ago).
And it's not just Argentina: lots and lots of countries place huge duties on imported electronics for one reason or another. I also suspect this is the real motivation for Apple and Foxconn to start building iPads in Brazil. Theoretically, Mercosur/Mercosul is a customs union, and products traded across Mercosur borders are supposed to be free of duty (the reality is more complicated). But theoretically, an iPad manufactured in a Mercosur/Mercosul country should be available for less than half the cost of current Apple products in several of these countries, including Argentina.
posted by jeb at 10:44 AM on March 15, 2012 [10 favorites]
That's my theory about what drives a lot of crazy electronics prices on eBay, both because I have sold things on eBay like old iPhones for insane amounts of money, always to non-US destinations, and because I live in Argentina, where they tried to charge me $170 in import taxes for my free warranty replacement Kindle (original cost: $140) last week.
The lowest-end iPad 2 sells new for about USD$900 retail in Argentina, and Apple doesn't ship refurb iPad 2s to Argentina. Replacement Macbook Pro cords are $200 (I had to buy one a couple weeks ago).
And it's not just Argentina: lots and lots of countries place huge duties on imported electronics for one reason or another. I also suspect this is the real motivation for Apple and Foxconn to start building iPads in Brazil. Theoretically, Mercosur/Mercosul is a customs union, and products traded across Mercosur borders are supposed to be free of duty (the reality is more complicated). But theoretically, an iPad manufactured in a Mercosur/Mercosul country should be available for less than half the cost of current Apple products in several of these countries, including Argentina.
posted by jeb at 10:44 AM on March 15, 2012 [10 favorites]
Also, they may not be selling to Americans -- the base price for the iPad 2 is $419 (plus 15% tax!) in Canada.
posted by kate blank at 10:46 AM on March 15, 2012
posted by kate blank at 10:46 AM on March 15, 2012
Money laundering? Selling items at above face/fair-retail value is (at least in theory) a good way to create an apparent source of income to cover up an illegal cash flow from something else. I've occasionally seen items being bought and sold by users with very little history for ridiculous amounts, and I've always assumed there's some sort of money laundering or advance-fee fraud going on.
Also, I'd think that you'd probably want to have the money flowing from the US to somewhere else, rather than the other way around, though, just because that's the opposite direction of most contraband flows (i.e. drugs).
On preview, avoiding taxes/duties on electronics would seem to be the simpler explanation.
posted by Kadin2048 at 11:46 AM on March 15, 2012
Also, I'd think that you'd probably want to have the money flowing from the US to somewhere else, rather than the other way around, though, just because that's the opposite direction of most contraband flows (i.e. drugs).
On preview, avoiding taxes/duties on electronics would seem to be the simpler explanation.
posted by Kadin2048 at 11:46 AM on March 15, 2012
Response by poster: Sorry, folks, I had my prices wrong. Should be $385 and $400. Seems that eBay buyers aren't the only dummies around.
posted by markcmyers at 11:53 AM on March 15, 2012
posted by markcmyers at 11:53 AM on March 15, 2012
eBay seems to be the only place you can sell $100 gift cards for $110. Not the brightest people hang out there.
Hey, hey! I used to sell gift cards on eBay, and everyone (including eBay, sometimes) assumed it was a scam. But I got the gift cards by selling books and DVDs at Hastings for credit (since you get significantly more credit than straight cash), and using the credit to buy gift cards that I converted to cash via eBay.
posted by El Sabor Asiatico at 12:35 PM on March 15, 2012
Hey, hey! I used to sell gift cards on eBay, and everyone (including eBay, sometimes) assumed it was a scam. But I got the gift cards by selling books and DVDs at Hastings for credit (since you get significantly more credit than straight cash), and using the credit to buy gift cards that I converted to cash via eBay.
posted by El Sabor Asiatico at 12:35 PM on March 15, 2012
Oh wait, I thought you were referring to the sellers, not the buyers. Damn. Anyway, yeah, not the brightest people.
posted by El Sabor Asiatico at 12:37 PM on March 15, 2012
posted by El Sabor Asiatico at 12:37 PM on March 15, 2012
eBay seems to be the only place you can sell $100 gift cards for $110. Not the brightest people hang out there.
I am in Europe and my local creditcard cannot be used on the US appstore.
I am willing to pay a small premium to buy giftcards for the US appstore from a trustworthy source. Maybe the bright people can tell me a better solution?
posted by Akke at 1:47 PM on March 15, 2012 [4 favorites]
I am in Europe and my local creditcard cannot be used on the US appstore.
I am willing to pay a small premium to buy giftcards for the US appstore from a trustworthy source. Maybe the bright people can tell me a better solution?
posted by Akke at 1:47 PM on March 15, 2012 [4 favorites]
I don't know about the non-US buyer issue and maybe that is the main thing. But a few other things occur to me...
My first question would be are you sure they are in fact selling like hotcakes - i.e. are you looking at things actually sold or things that are up for sale? Putting things on eBay is very cheap, you can do a number of failed auctions to test the market and if you end up making an extra 10 dollars by not underpricing yourself you still come out ahead.
Second question would be are you sure you're comparing apples and apples (hyuck hyuck) - are you accounting tax, software, hardware upgrades or extras (a wall charger etc.).
But I have also noted that electronics often go for extremely small savings over new and I think it is just the issue of the market for desired commodities. Many people are like me, I'm willing to pay the extra $30 or $40, maybe more to have a transaction in a store with a proper receipt and pull the thing new out of the box. I think other people are of the mindset "I will end up with exactly the same experience as you but I saved $20 and money is money."
It can be really interesting watching markets adapt on eBay. I just took a chance buying an iriver Story HD ebook reader because Target is liquidating them for $50. I've been keeping a curious eye on sales on eBay to see how it will adapt to this undercutting - they started out at $130 retail or so, and are still $95 at Amazon.
On eBay I am starting to see runs of new-in-box, free shipping offerings for Buy it Now at (real examples) $78, 77.98, 77.77, 76.88, 76.75, 76.70, from a number of different sellers. I assume the markets find their level in this manner - power sellers incrementally undercutting each other while trying to figure out what the receptive pool (people without access to a Target, I assume in this case) will bear price-wise.
posted by nanojath at 2:09 PM on March 15, 2012 [1 favorite]
My first question would be are you sure they are in fact selling like hotcakes - i.e. are you looking at things actually sold or things that are up for sale? Putting things on eBay is very cheap, you can do a number of failed auctions to test the market and if you end up making an extra 10 dollars by not underpricing yourself you still come out ahead.
Second question would be are you sure you're comparing apples and apples (hyuck hyuck) - are you accounting tax, software, hardware upgrades or extras (a wall charger etc.).
But I have also noted that electronics often go for extremely small savings over new and I think it is just the issue of the market for desired commodities. Many people are like me, I'm willing to pay the extra $30 or $40, maybe more to have a transaction in a store with a proper receipt and pull the thing new out of the box. I think other people are of the mindset "I will end up with exactly the same experience as you but I saved $20 and money is money."
It can be really interesting watching markets adapt on eBay. I just took a chance buying an iriver Story HD ebook reader because Target is liquidating them for $50. I've been keeping a curious eye on sales on eBay to see how it will adapt to this undercutting - they started out at $130 retail or so, and are still $95 at Amazon.
On eBay I am starting to see runs of new-in-box, free shipping offerings for Buy it Now at (real examples) $78, 77.98, 77.77, 76.88, 76.75, 76.70, from a number of different sellers. I assume the markets find their level in this manner - power sellers incrementally undercutting each other while trying to figure out what the receptive pool (people without access to a Target, I assume in this case) will bear price-wise.
posted by nanojath at 2:09 PM on March 15, 2012 [1 favorite]
Best answer: I have been asking myself a version of this question lately as I have been trying to get a Lego Mindstorms 2.0 set for a good price. I have watched over and over again as people bid up auctions to prices as high as $285+ shipping, when a brand-new one is $269 with free shipping from Amazon (and $10 more, plus shipping, from Lego's on-line store).
My theory is two-fold: 1) Not everyone researches. Perhaps there are people who assume prices will be lower on eBay and don't bother to check? I never start shopping without a good sense of what prices are elsewhere, and a clear sense of what kind of discount I'm looking for that will make it worth it to buy from some stranger on eBay, so I have a firm ceiling and I don't go above it. I guess most people don't bother to do that.
I would guess that point #1 goes for both buyers and sellers, because sellers are posting Mindstorms 2.0 sets with Buy It Now prices over $300. Those don't sell, and one quick click on "completed listings" would show them that. But one or two new ones go up every day.
2) I suppose it's true that people still get caught up in a "win the auction" mindset as they're bidding, and end up paying $285 for a $269 product because they increased their bid in increments of only a few dollars at a time, and each time maybe there's a conscious or unconscious thought that if they were willing to pay $X, why wouldn't they be willing to pay $X+2.50 or $X+5, because $2.50 or $5 is nothing. And they do that 3, 4, 5, 6, times.
That's my theory, anyway. But, sadly, I've never had the opportunity to ask one of these people to explain herself, so I don't really know.
But I have also noted that electronics often go for extremely small savings over new and I think it is just the issue of the market for desired commodities. Many people are like me, I'm willing to pay the extra $30 or $40, maybe more to have a transaction in a store with a proper receipt and pull the thing new out of the box. I think other people are of the mindset "I will end up with exactly the same experience as you but I saved $20 and money is money."
This, too, though. I thought about it and figured I needed a discount of at least about 15% for it to be worth buying off eBay instead of from Amazon or Lego, but a lot of Mindstorms sets sell for below retail but maybe only 5% below. Clearly these folks--if they've thought about it at all--have a narrower margin than I do that makes it worth taking eBay risks.
posted by not that girl at 3:08 PM on March 15, 2012
My theory is two-fold: 1) Not everyone researches. Perhaps there are people who assume prices will be lower on eBay and don't bother to check? I never start shopping without a good sense of what prices are elsewhere, and a clear sense of what kind of discount I'm looking for that will make it worth it to buy from some stranger on eBay, so I have a firm ceiling and I don't go above it. I guess most people don't bother to do that.
I would guess that point #1 goes for both buyers and sellers, because sellers are posting Mindstorms 2.0 sets with Buy It Now prices over $300. Those don't sell, and one quick click on "completed listings" would show them that. But one or two new ones go up every day.
2) I suppose it's true that people still get caught up in a "win the auction" mindset as they're bidding, and end up paying $285 for a $269 product because they increased their bid in increments of only a few dollars at a time, and each time maybe there's a conscious or unconscious thought that if they were willing to pay $X, why wouldn't they be willing to pay $X+2.50 or $X+5, because $2.50 or $5 is nothing. And they do that 3, 4, 5, 6, times.
That's my theory, anyway. But, sadly, I've never had the opportunity to ask one of these people to explain herself, so I don't really know.
But I have also noted that electronics often go for extremely small savings over new and I think it is just the issue of the market for desired commodities. Many people are like me, I'm willing to pay the extra $30 or $40, maybe more to have a transaction in a store with a proper receipt and pull the thing new out of the box. I think other people are of the mindset "I will end up with exactly the same experience as you but I saved $20 and money is money."
This, too, though. I thought about it and figured I needed a discount of at least about 15% for it to be worth buying off eBay instead of from Amazon or Lego, but a lot of Mindstorms sets sell for below retail but maybe only 5% below. Clearly these folks--if they've thought about it at all--have a narrower margin than I do that makes it worth taking eBay risks.
posted by not that girl at 3:08 PM on March 15, 2012
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eBay seems to be the only place you can sell $100 gift cards for $110. Not the brightest people hang out there. I wouldn't imagine this is any different.
posted by santaliqueur at 10:10 AM on March 15, 2012 [1 favorite]