2020: The Year of the Reseller
For the better part of the last decade, my full-time job has been involved in the retail world. Most recently, I held a position where I was a brand advocate inside of a big box store. During this time I became acquainted with the concept of the reseller. What would happen is that the store would run a rather aggressive sale, for example, $100 off of a new iPad. And what we would see occur is people coming in to buy as many of these as possible to be able to sell at a profit. Using the iPad example, these buyers would wait for the price to rise again before attempting to sell their discounted units for a slight profit.
I always thought that this was a peculiar way to make money that required a lot of research and leg work to find the deals and go obtain the product from various stores. This subset of the population has always felt rather fringe, the people that sell things on eBay as a primary source of income. This year, however, has been an unusual one. The global pandemic put a halt to manufacturing that caused several product shortages, and with these product shortages came the demand for them. And wherever there is demand without supply, there are sure to be price increases. And it was these resellers that took advantage of this situation. 2020 has been the year of the reseller.
Pandemic Shortages
When the world went on lockdown at the beginning of the year, the panic became a natural occurrence for many people. As the prospect of multiple weeks stuck at home became a reality, many people decided to hit the grocery stores to stock up on essentials such as canned food, water, and toilet paper (apparently). This caused shortages due to an unprecedented increase in demand with a disruption in the supply chain due to the shutdowns caused by the pandemic. This created the environment for people to capitalize on people’s panic.
There was a demand for things like toilet paper and hand sanitizer, but there was no supply since people were panic-buying from every conceivable outlet. When the production slowed due to global shutdowns and stay at home orders, the demand only increased. What resulted was people that had bought a bulk of these items to seek a profit from them, a practice that is known as price gouging.
In Texas, it was not uncommon to see a roll of toilet paper being sold for $10 or $20 a roll during the height of the shortage in late March. And it was this moment that showed the world the life of the reseller, people making a profit off of the demands of the market. I have seen a variety of viewpoints on this practice. Some people view this as predatory, taking advantage of people in need. Others view it as noticing the trends in a market and taking advantage of them. I feel that both of these views are right, but what the culture of reselling truly is is a commentary of the engrained capitalist nature that has been taught to us at a young age.
Shades of Capitalism
As an American, the word capitalism is thrown around frequently and proudly. Americans are very proud to be a part of the free market, where you can create your destiny with the right product and plan. What they do not seem to like as much, however, is when the free market works against them. There is something that feels so inherently American about price gouging in the middle of a pandemic. The reason that so many Americans are opposed to any sort of socialist agenda in government is that there is no reward for performing better than others. Someone buying up all the hand sanitizer to sell it at a premium during the peak of the demand for hand sanitizer isn’t all that different than a pharmaceutical company discovering a new drug and selling it at 1000% profit. The only real difference is scale.
We have been taught to channel this advantageous nature since a young age, to always capitalize on a situation when the opportunity presents itself. What has been happening this year is that people are resorting to alternate ways to create income as the traditional methods have temporarily dried up. We have seen many people turn to online content creation as a means to make extra cash, for example. There is something to be said about the expectation that we have had placed on us by society to be sharks.
What has resulted from this mentality in conjunction with limited supply chain capacities is a year of proliferated reselling. We have seen shortages of laptops, graphics cards, webcams, game consoles, and cleaning supplies. Each of these products has seen price hikes by independent resellers. A key to their success has been the implementation of Twitter product drop announcements and purchasing bots.
The Science of Reselling
While it may seem like a function of luck, resellers do have a system that has been successful this year. The pillar of this has been the emergence of e-commerce purchasing bots. As items such as Sony’s PlayStation 5, NVIDIA’s RTX 3080 graphic card, and Microsoft’s Xbox Series X have been extremely hard to find, these bots have become an invaluable tool to acquiring these products before the general public.
As a result, there has been a gold rush emerging for bot services to be able to snatch up these products quicker. Many resellers view this as an investment, where the bot will be able to acquire products for them. This can almost be viewed as the bot being an inventory specialist for a business. The bot acquiring the product then ensures that the seller will be able to mark up the price of the products for sale on various selling websites like Swappa, eBay, Facebook Marketplace, OfferUp, and others.
In addition to bots, there have been many product drop Twitter accounts to notify users of when products are available for purchase. These types of accounts have been very popular in the past with those involved in the acquisition and sale of limited edition sneakers. Now the trend has come to the reselling of electronics as well. There is some sense of small business intuition when it comes to many of these resellers. They approach the buying and selling of hard to find items to be their own small business, no business or marketing plan required. The complexity comes in perception. Despite viewing themselves as opportunistic businesspeople, some view these practices as predatory, and these voices are getting louder.
The Morality Element
Before writing this, I did a poll among my friends on social media about how they view resellers. The question was simple, are resellers opportunists or immoral? I was unsure of what to expect from my friends. The results were relatively balanced, with 60% saying that they were opportunists and 40% saying that they were immoral. Those that view resellers as opportunists can easily point to the capitalist culture that has allowed for their rise. But the counter-argument, centered around them being immoral, has some merit as well.
We are still currently in a devastating pandemic, that has claimed the lives of over 300,000 people in the US alone. The economic impact of this has been felt by so many people, in various industries. The restaurant and movie film industries in particular have been hit hard by the pandemic closures. In April, unemployment skyrocketed to 14.7%, with many workers furloughed or terminated seeking unemployment benefits. Add into this environment someone buying a game console for $500 only to turn around and ask for nearly double that, and you can see why that upsets some people (as can be seen from this Reddit thread).
In a year that has been filled with hardship, you can sympathize with a parent that is trying to get their child a new PlayStation or Xbox. The year has been so challenging for parents but also for children who have had to transition to online learning platforms and have been expected to make the transition seamlessly. Parents just trying to give them something nice for the holidays only to find that the console that they want is nowhere to be found. But the pressure to make their child happy has forced them to seriously consider paying an exorbitant fee just to make their child happy.
An interpretation of this reality can be that resellers are capitalizing on the emotional need of a parent to make their child happy. And this is where many have a problem with the practice of reselling, as it creates desperation and a sense of urgency. Throughout the pandemic, I have noticed a story where a reseller was stuck with a bulk of products after they could not get the product sold. The reactions to these stories from friends and colleagues go along the lines of “that’s what they get”, there is a definite disdain by many for those that engage in reselling.
The Expansion
COVID-19 has shown us as a society that we need to be able to adapt. This need to adapt has changed the way that we engage with one another. This is evidenced by the rise of Zoom and other video conferencing solutions as ways for us to work and to learn in the current climate. As such, the opportunistic nature of resellers can be attributed to the economic realities of the world that we live in. What used to be something designated for sneaker connoisseurs that use StockX has now become widespread for any product that is in demand.
The question then becomes, as reselling has become much more common in 2020, is this a change for the best? Economically speaking, this could e be viewed as an interesting stimulation of the economy assuming that the resellers were to spend their profits with small businesses. On the other hand, the price mark-up that is happening on these products does seem to be predatory when the original price is being sold for double if not more. In the end, it comes to your perspective on capitalism and opportunity if this is a good or a bad thing. Ultimately, the environment that this occurred it could not have happened in a different year. This is what happens when a culture prioritizes an entrepreneurial spirit and people decide to exploit an opportunity when it arises. The culture of reselling that has emerged as a result could not be anything that is more American, and more on-brand for us as a society. 2020 was the year of the reseller…for better or worse.
