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366. Reseller: Buy to Sell?

Lee, Jeong-hyun 기자2017.05.11 15:39:49

     As seen in the disturbance of “2013 New Balance Cherry Blossom Product”, “2015 H&M-Balmain Collaboration”, and “2016 Starbucks MD Product, Cherry Blossom”, desire of consumers to purchase popular or rare items is tremendous. Reselling implies the act of abusing the consumer’s eagerness to buy products. ‘Resellers’ sell their products on used trading websites at higher prices than the original ones. In severe cases, the second-hand price may rise to over 20 times the original price. As the number of actual customers who have suffered from this has increased, the act of reselling has become controversial.


    Purchasing a used product which is more expensive than its list price probably does not make sense to most people. However, it often occurs in the street fashion market or some specific product lines. As a common example, the popular numbering series for Nike Jordan has doubled in price twice in the second hand market. This is because the supply is incompatible with the demand.


    Resellers were first known in earnest in Korea in November 2015. At that time, products made by a special collaboration of the SPA brand H&M and the apparel brand Balmain were launched in Myeongdong H&M store and consumers camped in front of the stores for a few days before the launch. However, this became controversial as most of them were revealed to be resellers. In the past, the range of reselling was small through some online communities, but recently, the reseller market itself has been rapidly growing as the demand increases. Items that are sold in the second-hand market have also been diversified. Not only clothing, but also goods such as toys, kitchen utensils, and groceries are sold as resell products. This is why consumers are complaining that resellers go beyond reasonable bounds.


    Resellers contend that they resell the products legitimately and profits are just compensation for their efforts, such as waiting in line and camping for a long time. They even say it is a very basic economic theory that prices should be raised if demand exceeds supply. In their point of view, reselling is a legitimate way to earn money. It is true that the price of products that is exclusive to resellers is not illegal under current laws. However, there are definitely problems with reselling.


    The reason why reselling is criticized is that the goods are traded at an unreasonably high price compared to the list price and it destroys the order of the circulation market. For example, the sneakers named Yeezyboost and Airyeezy, made by Adidas and Nike in collaboration with Kanye West, showed 20 times increase in price. As a result, the actual buyers are being forced to pay an excessive amount of money to buy the products because they are deprived of the opportunity to buy them at the list price. Moreover, resellers take benefits from not having to pay tax. Lee, Jun-young, a consumer studies professor at Sangmyung University, said “Problems arise as resellers monopolize products for speculative purposes. Reselling, which started from a good purpose, is distorting the order of distribution and its original purpose.”


    The enterprises are partly responsible for these problems. If the price of products is raised by the reseller and the competition of purchase is overheated, the companies can experience an increase in their brand value. This is one of the reasons why companies are releasing limited edition products constantly. They almost always use the resellers as a marketing strategy. 


    As long as company’s noise marketing and people’s desire to have goods of high value exist, the damage caused by resellers will continue. In fact, there is no fundamental way to stop resellers at the government level. Therefore, it would be best if consumers didn’t buy products from resellers. However, this is not a viable solution because of their desire to buy the products. There is also a way for enterprises to change the way they sell things so that consumers do not make unreasonable purchases from resellers. For instance, companies can sell their products by reservation or limit the number of purchases per person. The last solution could be that managers of second-hand sales websites should strictly prohibit the act of adding a premium price to goods.

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