Friday, August 27, 2010

Speculative Buying; Market Poachers? Or Price Pacesetters?

First off, welcome all to my first blog post on Exceptionally Interesting! I thought I would start off this blog by discussing the thread my fellow colleague had put up about his personal experience in trying to purchase some MTG cards. 

MgtWar - Cape Fear Games Fails  here's the actual thread. A follow up thread by Don was created soon after the post on MgtWar's blog, this can be viewed here: A Case Against Speculation (of any volume)

I've gone ahead and already posted on both the sites, giving my two cents but there are overarching themes that I feel are exceptionally interesting and should be included in my blog. 

The first: Internet markets. I believe a lot of shop owners don't realize the scale the internet works off of, and how dangerous it can be if you are not fully prepared to take on an infinite cliental. It is good business to expand your client list, however with the revolution of internet markets the customers AND sellers are anonymous. With this in mind it leads to my next two topics of discussion: 

Speculative Buying as Market Poachers: A lot of store owners view speculative buying as unethical and bad business. Fair to say, being bought out for the sake of profit and not for the sake of play would feel like being cheated. Yes, this is not good for business especially because as a merchant,  you hold power in the economy because you have a good to sell, as soon as you no longer have this good, you become irrelevant and powerless. 

So how can you assure yourself to be always "stocked"? Well, a merchant does have the right to refuse service to anyone. This right Cape Fear games invokes to deny Veteran's request. Which by all legal, and ethical means, is legit. However, this method is quite unfriendly with the image the company gives off. Being a merchant your number one responsibility is to appeal, the best way you can, to the customers needs. Because it is proven in market research that if you please 1 customer he'll tell 1 in 10 people about how well he felt your service was, but an unhappy customer is likely to tell 4/10 people they know how bad your service was. That research was conducted based on the real life situation, not factoring internet markets, which have already posted many blogs about this business transactions have already been created so you can almost exponentially guess how many people this thread has reached. 

So with a capitalist economy, is it impossible to get away from speculative buying, regardless if its bad for business? AND regardless if you have right to refuse service your reputation becomes tainted, so how do sellers win?

Speculative Buying as Price Pacesttters: A lot of the larger magic vendor companies already do this but they ASSURE stock. EIther by holding back part of their inventory and after they sell out of the current stock they relist, or they put a limit on how many of a single card someone my buy. Either way they've learned to not fight something they can't beat and use speculative buyers to their advantage by relisting the card for higher value based on the choices they feel the speculators might be buying at. Not only that, but they also look to BUY and RESTOCK more in these cards that are being bought, from other sites or local purchase. If the vendor is on top of his game and follows the market he could make some serious profits. 

I suppose my point is that I find speculative buying to be completely inherent in a capitalist economy that promotes free markets. Its up to the merchants to deal with it how they seem fit and of course also deal with the ramifications of those actions. To MgtVeteran, and those that read his post, I would urge you not to hate Cape Fear for their view on speculative trading but to how the customer service and policy they have to deal with speculative buying was conducted. And to Don I wish you well In your business and am happy you've posted with an open mind about this.