Saturday, January 17, 2015

Nintendo Make More Amiibo and Stop Scalpers

If it's in limited supply, eventually it will get scalped.

OK, so if you don't know what Amiibo are by now, let me fill you in. They are little 3 inch figures that hold game data and special bonuses for Nintendo games that you scan in through your Wii U gamepad or New 3DS. Here is an example of some of them.


They are pretty awesome if you ask me. Well here's a little issue with them. They are selling out everywhere. This is good news for Nintendo because that means that they are printing money and they don't have to worry about excess inventory they need to get rid of. Even the pre-orders are selling out. So many companies would love to have success like that. Here's the problem though, they are being sold out everywhere, and some figures like villager are being discontinued. What does this mean, eBay scalpers charging big bucks for them.

Now I don't have a problem with eBay scalpers. They are businessmen, and while it does suck that people buy things up just to flip them for a profit and now you can't enjoy it, I don't blame them. I'm not a scalper myself, but I do sell things on eBay that I buy at garage sales to sell for a higher price. I'm more of a picker. But I can give a scalper's perspective, so Nintendo, listen up. There is only 1 type of environment where scalpers and resellers can exist, and that's in markets with a limited supply and a demand that exceeds the supply. Scalpers look at a product, see that there is a demand for that product, see that there is a limited supply that will likely be less than that demand, buy at the current sales price, and then sell for a higher price once the item is sold out. And this hurts you somewhat. I'll make up a little example below.

Lets say that I am an apple farmer. I have 1000 apples to sell, and I sell them for $1 each. Some people say "hey these apples are pretty good" and word gets around. After I sell 200 apples, I have $200 and sales just keep coming in. Some people notice this and buy apples 15 at a time. At the end of the day, I sell out of apples and have to turn away a crowd of people. However, I now have $1000 in my pocket. As I drive away, I see some of the people that bought 15 apples selling them for $2 each, and people are buying them. They're making money off of my work, but they bought the apples fair and square. I got what I was asking for, but I could have made even more. I have some more apples back on the farm, but I said tomorrow was orange day.

OK, so the next day, I bring 2000 oranges to the market. Knowing how good the apples were, people start buying oranges up by the basket full. I'm selling them for $1 each. Well, after an hour I have sold all my oranges and now have $2000. As I drive away, I see them again, this time selling my oranges for $3 each. Again, they didn't steal them from me, they bought them, I have the money to prove it, but I still can't help but feel I'm missing out on something.

At this point, I have 2 ideas of what I can do. I can either continue with this business model of bringing a certain number of fruit to the market and let the resellers get my potential profit, or I can invite people back to the farm and sell them the other fruit on an as needed basis for $1.10 each after I sell my initial inventory. I personally would sell the initial inventory and invite people back to the farm to get more for $0.10 extra, and right now you're letting resellers get your profit.

 Here is what I propose you do. You have your in store inventory. You ship the 1000 or so units to each store and charge the $13 you currently charge. Once that inventory is done, it's done, or whatever the current set-up is. At the same time, you have a section Nintendo.com where you can buy any amiibo figure (even the discontinued ones) for $20 each. Why $7 extra, because that's the price for security in availability. You produce them on an as needed basis and ship them directly to the consumer. No middlemen so extra cash in your pocket. You essentially destroy the scalper market because there's no way they can compete. These aren't 20 year old NES cartridges. These are 2 month old figures. You still have the molds. These things print money, it would be financially irresponsible to NOT do this. Now I know you might be worried about the deals you have with gamestop and target with the exclusives. Well, the $13 version is exclusive and exactly the same as the $20 version except one is through you and one is through the vender. Given the option between $13 and $20 of the same product, people will chose the $13 version. Your vendors are happy. However, given the option between $20 and $100 for the exact same product, people will chose the $20 version, which means your fans are happy and you get paid instead of scalpers.

While I still have your attention, please make more gamecube adapters and controllers for smash bros wii u. This is more than just a special edition art book or figure to sit on one's shelf. This is a whole different and to many prefered way to play smash bros. These are also at the mercy of scalpers. You sold them separately for like $15, and scalpers are asking $50 for them. These are also printing money. Take advantage of the opportunity. You have infinite supply theoretically, but you're only releasing some of it. Well, this has been Happy Gamer, signing off, and Nintendo, if something is printing money and you have an infinite supply, release as much as you can even if it's for a slightly higher price.

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