Game Buying Nintendo 3DS from Tesco and Reselling at higher price

keithclancy

http://uk.gizmodo.com/5787106/retailer-buys-3ds-units-from-competitor-then-marks-up-the-price

Retailer Buys 3DS Units From Competitor, Then Marks Up The Price

Retailer Buys 3DS Units From Competitor, Then Marks Up The PriceConsole launches are normally times for absurdity, but this report coming in from the UK - of GAME staff popping down to their local supermarket to buy 3DS units - is something else.

Eurogamer has got hold of documentation sent to employees of GAME, a major specialist retailer in Europe (and Australasia) at the time of the 3DS' launch over the weekend, urging employees to raid the shelves of their nearest Tesco supermarket (which was selling the 3DS for £35/USD$55 less than GAME) in order to "gain 3DS consoles and games for your store's pre-owned stock".

To do this, staff were allowed to take money from the register, walk down to Tesco and buy a number of 3DS + game bundles, walk back to GAME and sell the consoles as "pre-owned".

These "pre-owned" units would then be kept as reserve, and once the retailer's allotment of handhelds ran dry they would be sold at "the same price as mint due to expected supply shortage". GAME's "mint" price being £220 (USD$350).

So Tesco, a large supermarket chain in the UK, sells consoles at an enormous loss just to get people in the door and take business away from their competition. And GAME, Europe's largest specialist video game retailer, resorts to buying 3DS units not from official distributors, but from a...supermarket.

I don't normally cry rip-off but this is one !! :eek:

sandin

If a competitor of mine sold the products I sold at a price less than I was buying them from the manufacturer, I'd do it too as would every other person in the same situation. - I probably would not fleece the consumer, but it would enable me to match the tesco price without incurring a loss myself.

Nothing whatsoever wrong with it at all.

mikemac

Not quite the same but been widely reported and often here on boards of off license owners who buy drink in Tesco and then resell it themselves.

This was a few years back and before everyone headed up North

gouche

This kind of thing happens all the time.

I used to work for a toy retailer and one Christmas, Argos were selling Wii's for less than what we were selling them for. We were told to buy as many as we could from petty cash and get a VAT receipt so they could be claimed back on.

Can't have been making that much money off them but it helps when you have consoles in stock and your competitors don't.

sandin

feelingstressed wrote: »

Not quite the same but been widely reported and often here on boards of off license owners who buy drink in Tesco and then resell it themselves.

This was a few years back and before everyone headed up North

Publicans rarely headed north as the vat can;t be claimed back, but can be if they buy it from Tesco in south. And plenty still do it too.

keithclancy

Slightly different though, in this case Tesco are uncutting Game, Game are walking in purchasing 3DS Consoles and selling them at full price when there is no supply left.

This is akin to a ticket tout, i.e. buying an item at a certain price so that the consumer cannot purchase it due to lack of supply at that price, then selling it on at a higher price. and taking nice margin off tesco in the process.

That is pure profiteering. Game are making money from another retailer attempting to be competitive and ripping off the customer in the process.

Pablo Sanchez

All is fair in war and retail:D

slave1

Nothing unusual in this, I often see the likes of Woodies in local hardware shops purchasing items for immediate resale in Woodies to some poor ole sap.

Simple economics.

You should see the amount of restaurant/cafe owners is Tesco/Aldi/Lidl early in the morning buying the cheapest breads and veg.

keithclancy

So you think its fair that someone wanting ot purchase one walks into Tesco only to find that all the stocks has been bought up by Game ?

And now your only option is to walk up and pay more for it becuase you didnt get in there first ?

Gamesnash.ie: Pat

Lads I'm going to hold my our hands up and say we're guilty of the same thing at times. I can see your point Keith and it's a valid one if there were customers who could not get stock in Tesco afterwards.

But that said: From our perspective the likes of Tesco using enormous buying power and funds to engage in loss leading can often find them selling items cheaper than we can buy from the official distributors. If memory serves me they retailed black ops €7.00 cheaper than we could buy it in for. Right now they are selling PS3 consoles cheaper than Sonys Distributors get them off Sony for :eek: That's a crazy situation.

Part of me is glad to see Game having to do this as it makes me feel better for having to do it too. On the other hand I'd much prefer if everyone had a level playing field to compete from.

wmpdd3

At one point we had head shots of all the toy retailers that had tried to do this before. Usually at 12 am when it goes on sale we'd have to stay back and try spot them in the crowd.

We'd still have to allow 1 per customer, the retailer can't just refuse a person because we 'think' they will re-sell it.

Happened a while ago, at Easter, this guy ordered €1000 worth of Easter eggs on offer with delivery to his shop!!

He was going to sue under Equality Law, when a customer quota was applied (this was visible instore)!

Gamesnash.ie: Pat

wmpdd3 wrote: »

At one point we had head shots of all the toy retailers that had tried to do this before. Usually at 12 am when it goes on sale we'd have to stay back and try spot them in the crowd.

We'd still have to allow 1 per customer, the retailer can't just refuse a person because we 'think' they will re-sell it.

Happened a while ago, at Easter, this guy ordered €1000 worth of Easter eggs on offer with delivery to his shop!!

He was going to sue under Equality Law, when a customer quota was applied (this was visible instore)!

Must get some disguises sorted

RayCon

So Tesco, a large supermarket chain in the UK, sells consoles at an enormous loss just to get people in the door .....

Had to laugh at that .... almost makes Tesco out to be victims

rubadub

keithclancy wrote: »

This is akin to a ticket tout, i.e. buying an item at a certain price so that the consumer cannot purchase it due to lack of supply at that price, then selling it on at a higher price. and taking nice margin off tesco in the process.

A ticket tout is paying the normal RRP and then selling it on higher when there are no tickets available from any other outlet. I see this situation as different than touting, as there is still a supply of stock available at the RRP from other outlets. -Now if game were buying up the "must have christmas toy" from all retailers and selling it well above the RRP then it would be similar to touting/profiteering.

Remember below cost selling used to be illegal here, so if tesco were doing this here and making a loss it would have been illegal a few years back, and I expect many people will still frown upon the practise of below cost selling and view tesco as more of the bad guy than Game in this case, and saying fair balls to Game for taking advantage of them.

keithclancy wrote: »

pure profiteering.

Depends on your definition.
http://www.google.com/search?sclient=psy&hl=en&complete=1&site=webhp&q=define%3A+profiteering&aq=f&aqi=&aql=&oq=&pbx=1
IMO what they are doing doesn't fall under any of these definitions

# Profiteering is a pejorative term for the act of making a profit by methods considered unethical. Business owners may be accused of profiteering when they raise prices during an emergency (especially a war). ...
en.wikipedia.org/wiki/Profiteering_(business)

# The act of making an unreasonable profit not justified by the corresponding assumption of risk, or by doing so unethically
en.wiktionary.org/wiki/profiteering

# profiteer - make an unreasonable profit, as on the sale of difficult to obtain goods
# profiteer - someone who makes excessive profit (especially on goods in short supply

You could say tesco are engaging in predatory pricing

Gamesnash.ie: Pat

rubadub wrote: »

Remember below cost selling used to be illegal here, so if tesco were doing this here and making a loss it would have been illegal a few years back, and I expect many people will still frown upon the practise of below cost selling and view tesco as more of the bad guy than Game in this case, and saying fair balls to Game for taking advantage of them.

Even with below cost selling rules there were ways around it which were routinely exploited. For example buy 10,000 of these at a vastly reduced price if you buy one copy of <genericsportstitle07> which will cost you €100,000. Big retailer buys the €100,000 game and puts it in storage and there's €10 off the cost price x 10,000 units in return. Big retailer has documented invoice showing price of goods and aren't below cost selling.