Mattel Disney Pixar CARS: eBay, the Conundrum

eBay is easy to hate but eBay really serves many purposes – some not so obvious.

On the surface, ebay is merely a virtual auction clearinghouse where buyers and sellers come together to sell and buy goods.

eBay has managed to trump most of the other online auction houses in the United States and in many countries because most people trust it through its processes and its longevity (of course, that’s not to say 100% of all transaction goes smooth or honestly but clearly enough do).

(Yahoo auctions leads in some Asian countries and others in other countries but they serve the same principle).

Part of the success of eBay and to a lesser extent of others is that you have a sufficient number of buyers and sellers. Just as why they do not hold ‘Old Masters’ auctions in Jasper, Wyoming or on a barge in the Amazon – as a seller, you not only want as many interested buyers but also the right potential buyers.

eBay is in many ways the perfect forum for supply & demand. Anyone in the world with internet access (and can read English for eBay US obviously) can see and bid on an item. You can literally buy items for one US penny or over a million dollars depending on supply & demand.

And of course, that fluctuates – as we clearly saw with CARS – the situation with Crusin’ McQueen in the last two months of 2006 was a textbook example of rationality taking a holiday.

For those that missed it, it went something like this.

This Movie Moment appeared towards the later part of the summer, the Crusin’ McQueen was all new and while most of us had a Sally already, since “new” CARS were so rare, most people were willing to bite the bullet (You can read the full story in our book) and buy this MM set … while it was not a pegwarmer as they are now, after the first few weeks, they were relatively available though selling briskly – since it was close to the holidays and at that point, no one was sure how much longer the line would last so might as well buy it to be safe.

But then a mysterious single carded version appeared that was not featured on the back of any Supercharged cards (showing which CARS were out) and in particularly, it was NOT featured on the back of his OWN card!

There were three different Supercharged card backs which featured either 21 or 23 different CARS but none featured Crusin’ McQueen. At this point, Mattel had just switched from the 30-CARS case to 18-CARS case but no one (not even 1StopDiecast) had any idea what was in each case – old Hot Wheels “treasure hunt’ and variant collectors wondered if this was a ‘treasure hunt?’ Or was it a short-pack? (For Hot Wheels, Mattel packs some ‘treasure hunts’ ONE to a box of 72-Hot Wheels – hence the jargon – short pack) Was this the CARS equivalent?

While Batman would shout “Let’s go to the batcave!”

We shout, “Let’s go to eBay!”

eBay serves as our bat beacon. If we see 1,000 listings …, we can pretty much breathe a sign of relief that it’s everywhere – but if there are only 5 listings?

Then the question is – what do you do? Do you succumb or do you resist?

The bottom line is its your money and you can choose to spend it as you see fit.

In this case, based on incomplete information, general craziness and whatever you want to call it, prices actually hit the $180 range for Crusin’ McQueen auctions. Yes, 1 car – @$3.29 retail (about average at that time) eagerly was sold for $150-$175 dollars.

Again, it’s your money. (just to note, I had a SC Crusin’ McQueen but I did not sell it – I bought it just a few weeks before the craziness when it was just seemed like another release – at that time, no one thought it was a rarity … or perceived rarity). Personally, I have spent that on a dinner and can’t remember if it was that great, I have spent that much on stupidity – getting a traffic ticket. We each have happy, sad and stupid stories about spending $200 or not spending $200 … there are people who wouldn’t spend $200 on an engagement ring 🙂 but would on buying a hunting vest … to each their own.

I bring that up because eBay is merely an efficient distribution system.

Part of the problem is that the distribution system (in particular for toys) is wildly uneven and solely dependent on the stores in your area buying and shelving the proper amount of CARS (in this case) for your population and interest.

I’ll cite my area, in NorthernCal. Most of the people here hate WM and refuse to let them build a giant 200,000 square feet store WM prefers so in NorCal and most of CA, we have probably a WM for every 750,000 to 1-million people … while in parts of the midwest or Southeast, in town/geo-areas of 1-million people, you might have 10 WM’s … not to mention Target’s and TRU’s … while we have more Target’s – we only have maybe 6-7 TRU’s to serve 10-million people … so unless each store decided to order 20-cases of everything, we simply don’t have enough.

So, eBay serves to re-distribute what WM-Target-TRU & Mattel was not able to do correctly.

And that extends out to Europe or other parts of the world. I am not the person who cares that much about exclusivity. I am lazy and would like nothing better than to buy everything while I’m buying Coke at the grocery store (one reason I don’t care if WM wants to build a 200,000 square foot store) and I frankly don’t care that much about jumping through hurdles to buy something (like Blu Ray DVD McQueen) … I’ll do it but it being limited or exclusive holds no great interest to me beyond having it (not as something to sell) but I understand it from a marketing point of view – you create hype and an artificial shortage that serves a couple masters.

Because strangely, if it’s easy to obtain, that thing loses the “extra” luster. How many people fight to collect detergent bottles or gum packaging or even closer to home, CARS bedspreads … not many because there’s no fight to find it.

So, that’s the fine line – what’s too much and what’s not enough? You sometimes have to be careful of what you ask for. What’s the right amount of Chuki’s per store? – 4? 10? 100? 1,000? Because at some number point, you might actually stop buying it because you figure, “I’ll just next time.” Because if you stop perceiving its scarcity (real or imagined), you might put off buying until the holidays or worst of all, stop buying because it’s common. Of course, that’s impossible to predict or gauge as it will vary from day to day and region to region.

That’s the irony – you don’t want too much trouble to find it but if it’s too easy everytime … then maybe you stop caring or yearning because the hunt is too easy.

AND eBay can add to that, giving you reason to be early to track it down, knowing that your only recourse is to pay more – having that “easy” outlet to sell and re-sell actually adds value to that you hunt for.

Before eBay, unless you were well connected, you had no idea what was going on unless you read one of the enthusiast magazine and I meant really read it – sometimes MONTHS later – hardly anyone was ever complete (and thus why older toys are so much more valuable) was that you had no idea if they released a red version to FRED MEYER (the chain) if you lived in a state with no Fred Meyer and because mail order was so iffy, you had to drive out of state to a toy show in hopes to see it and buy it … or that in Fred Meyer territory, it’s a pegwarmer and they’re trying to give it away – meanwhile, the rest of the country was willing to pay 3 times that amount … but eBay changes all that as a secondary distributor … now, if they release a gold version only in Hawaii, first of all, we scream to the company that it’s crazy to make such a limited item and then we jump on eBay to bid on it … and remember, if no one else is interested, you get it at the starting price, it’s only if two people value it – that’s when it gets interesting … and if 50 or 100 people are interested? Then you have name calling and the emptying of bank accounts.

But again, you have free will sitting in front of your computer and you in theory should ONLY pay what you are willing to pay … okay, I know it’s easy to get carried away … like being in Las Vegas … just do everything up to the point before you sleep and marry the stripper. 🙂

Bottom line is eBay sellers post items as a test and those that have interest encourage others … how many Green Ramones sold last week? And if they did, how many went past about $5 including shipping?

So, while eBay can encouraging hoarding or immediate transfer from stores to eBay listings – ultimately, demand meets supply or vice versa. Of course, in an odd way, you can blame the liberal return policy from stores on encouraging over-buying … and not really eBay’s fault. With a receipt, you can return un-opened toys within 90 days for a full refund so the eBay seller has a 90-days to try and attempt to make a profit

However, there are short term fluctuations in distribution and interest causing prices spikes and later price drops … now the situation in Europe or Asia is different than in the US. In the US, everything that is limited is announced (Blu Ray McQueen, Speedway of the South, Factory Set) – otherwise, it’s not really limited unless you a packaging variant collector … (for instance, there are much fewer Supercharged (red) Mia & Tia’s than there are WOC carded red Mia & Tia’s – the value you place on that is your call). So it is understandable international buyers are eager to have it in hand because a) they don’t know when or if it will make it over there and b) if it becomes common in the US, ironically, sellers stop listing them so if you’re looking for Bug Mouth McQ, good luck finding a listing …

Ultimately, eBay serves several purposes – helping to hype the hype … helping to re-distribute product where there are shortages … for a collector, it can be a curse, and a hinderance but it can also serve to even out distribution as long as you have enough sellers … and of course, how do you encourage more selling? More buyers … it’s a cycle … but if the profit for an item starts to fall too much, you lose seller’s interest and so, be careful of what you wish for & or wish against. It’s a fine balance equilibrium in regards to pricing and of course, different for everyone.

eBay is a fair system. Unlike a real marketplace where other factors might come into play in the seller setting a price (based on ethnicity, gender, you’re not local, etc …) directed towards a seller standing right there … eBay is only based on the price you’re willing to pay. Sometimes that’s a great thing, sometimes a good thing and sometimes – you have buyer’s remorse … but hey, thanks for participating in the ultimate worldwide test of supply & demand.