Think about it in terms of concert/sporting event ticket sales. Everyone hates scalpers. They aren't real fans, they're not going to go see the act/game. They know when all the ticket sales are going to be, since their entire life revolves around getting tickets, and they know all the pre-sales and other ways of snapping up tickets. They buy tickets in huge blocks when possible, use intermediaries and partners to buy more tickets to get around any limits.
When you, the fan, get around to buying tickets for the event you find that they're all sold out already (except for the nosebleeds). But you can get tickets on Craigslist for 3x the face value of the ticket from some guy who bought several large blocks for the sole purpose of re-selling them with a huge markup.
Maybe the venue shouldn't care if re-sellers are buying up all the tickets, but it sure makes for a shitty experience for their actual market (i.e. the people showing up for the event). It also limits the venue's ability to control supply and demand because they no longer have any direct say over the market price for their good/service.
So both fans and the venues seem to be worse off, while the middle man makes a big profit by artificially restricting supply.
The guy in the article exhibits the same type of buying behavior that a scalper would: buying more iPads than a normal individual would require and then reselling them at a markup. Apple doesn't have any way to tell that he's trying to extend their market abroad to people that can't purchase an iPad locally. But I'm pretty sure they have the same view toward a middleman that concert venues would. And the local customers trying to get an iPad when supplies are scarce are also going to be frustrated that one individual is making (effectively) block purchases.
One of the cardinal rules of good business is to cut out the middleman. That seems to be what's going on here.
Actually, I think the scalpers are right on some level. If they can sell the tickets at x3 price, then the real price of that ticket is x3 the original price. It only means that the vendor could do the same and get them all sold out anyways. If they really want to stop this process, it's enough to issue only tickets assigned to a name and check IDs at the gate - this way you cannot buy the ticket before you know who is it for - which means if person X can buy a ticket for me, I'm able to buy it for myself from the source.
But limiting scalpers is basically the same as EULAs and DRM - they're regulating what you can do with the thing you just bought. They're making life harder for normal users, while those who gain money by ignoring the system keep earning money.
But the only reason there is a demand at 3x the price is because the tickets are believed to be scarce because the scalpers bought all the tickets to sell at 3x the price because when the tickets are sold out at the venue it gives the illusion of scarcity.
They would not be able to do that, if there was no audience willing to buy it at 3x price.
Just think about it: scalper buys all the tickets and tries to sell it for triple price. Nobody buys it. Concert starts, it is empty and the scalper end up with expired tickets in his hands.
Does that happen? No, because people are willing to pay triple price.
Alternatively, the scalper sells half the tickets and makes a 50% profit overall. The concert sits half-empty and thousands of fans miss out unnecessarily.
At some price 'X' you won't find any more people wanting to buy the tickets - and the race stops there. Even if they're scarce, people won't be interested in tickets costing more than 'X' anymore, or you'll be able to do only X+5% so it's not worth the time.
But if you sell the tickets assigned to a name in the first place, there is no issue anymore. As long as venue sells "blank" tickets, they basically say they don't care if anyone is reselling them at much higher prices.
If there was an auction for the tickets the price would be driven up too. Shows do sell out in minutes and not just because of scalpers.
Imagine an auction that increased ticket prices until just before the show began. Now stop imagining it and recognize that it's exactly the same as sold out shows plus scalpers.
Yes, the concert-organizers should really just have an auction for the tickets in the first place. This way no-one can complain about high prices, since the fans bid them up to that level in the first place.
For extra ethical browny points, the sellers could donate (a fraction of) everything taken in above a certain `fair-price' point to charity.
When you, the fan, get around to buying tickets for the event you find that they're all sold out already (except for the nosebleeds). But you can get tickets on Craigslist for 3x the face value of the ticket from some guy who bought several large blocks for the sole purpose of re-selling them with a huge markup.
Maybe the venue shouldn't care if re-sellers are buying up all the tickets, but it sure makes for a shitty experience for their actual market (i.e. the people showing up for the event). It also limits the venue's ability to control supply and demand because they no longer have any direct say over the market price for their good/service.
So both fans and the venues seem to be worse off, while the middle man makes a big profit by artificially restricting supply.
The guy in the article exhibits the same type of buying behavior that a scalper would: buying more iPads than a normal individual would require and then reselling them at a markup. Apple doesn't have any way to tell that he's trying to extend their market abroad to people that can't purchase an iPad locally. But I'm pretty sure they have the same view toward a middleman that concert venues would. And the local customers trying to get an iPad when supplies are scarce are also going to be frustrated that one individual is making (effectively) block purchases.
One of the cardinal rules of good business is to cut out the middleman. That seems to be what's going on here.