Today’s lines at stores are a bonanza to pro resellers
Popular, new tech items in short supply are key
11/28/2013PITTSBURGH — Settled in a line of 50 people waiting to buy PlayStation 4 video game consoles outside of a North Hills GameStop store two weeks ago, Mike Kowaleski began the first phase of a plan to fund a very merry Christmas.
Never mind the mist that was freezing to frost that damp Thursday evening, or the line of enthusiastic gamers waiting to rip open newly released game consoles.
For Mr. Kowaleski, the end game was finding a buyer willing to pay a premium for his spot in line that day or going ahead with the purchase only to wait until closer to Christmas when desperate parents would scramble to pay hundreds of dollars more than the retail value once the inventory is sold out.
“I’ll put it on Craigslist, get some high-end yuppies who are scared to stand in line all night to buy it,” he said, rousing a chuckle from his fellow line mates.
Although Mr. Kowaleski stood out as the only reseller willing to speak out in that particular line, he is far from alone.
When hordes of shoppers pass up Thanksgiving turkey and stuffing to grab the ever earlier doorbuster deals this year, more than a few will be lining up with intentions of putting newly released consoles and other electronics up for sale the instant they’re purchased.
While there aren’t statistics tracking the prevalence of the under-the-table sales, the practice is common knowledge in the resale community, according to Durrell Waters, owner of Pittsburgh-based Trader Electronics.
“People overbuy sometimes and we get brand new items in that they want to sell. They’ll buy four TVs when they only needed two,” said Mr. Waters, who noted his store had already bought two Xbox One gaming consoles and two PlayStation 4s from anxious resellers. Both systems came out in the past two weeks.
Nik Raman, chief operating officer of New York-based electronics resale site uSell.com, agreed that Black Friday sparks a season of sales, both of newer products and those that are being replaced.
“The entire holiday season is a high volume time for us, with people trying to trade in old devices to try to get new ones,” said Mr. Raman.
Buying in hopes of reselling is always a risk, Mr. Waters said, considering the fact that sellers are trusting strangers who answer their classified advertisements not to rob them of merchandise that grows more valuable by the day. While sellers who utilize eBay or another online service can see guaranteed funds through PayPal, those who sell over Craigslist are often making face to face cash transactions to seal the deal.
But under the usual worst-case scenario resellers who don’t cash in on deals return their unopened console or electronic to the original store for a full or partial refund. In the best case, resellers can see more than twice the retail value of a game console or can pit buyers against each other to sell to the highest bidder.
The key to a market is limited quantity, of course. Based on analysts’ predictions of low stock of the gaming systems for the holiday season and on the early sales results, those who bought the systems with intentions to resell made a solid bet.
GameStop announced last week that at least 2.3 million customers are waiting to buy PlayStation 4 through back orders for the retail price of $399. Xbox One is also sold out through GameStop at the $499 retail price tag.
Josh Petrella of Hopewell, Pa., made $125 reselling a PlayStation 4 and $175 reselling an Xbox One.
But he’s also planning to claim a spot in line outside an electronics store today — and he’ll be willing to sell it to an impatient shopper.
“If they’re going to spend $200 on a flat screen and they’re getting a $100 discount, they may as well pay $50 to get to the front of the line to get it sooner,” Mr. Petrella said.
The Block News Alliance consists of The Blade and the Pittsburgh Post-Gazette. Deborah M. Todd is a reporter with the Post-Gazette.
Contact Deborah M. Todd at: dtodd@post-gazette.com or 412-263-1652.