Slackers Responds To Wii Scalping Accusations
Earlier in the week, Ars Technica posted a story that we picked up regarding a certain Midwest retail store's Wii sales. While there were nefarious claims made that received a fair bit of attention, we had not heard from the company itself until now. President of Slackers CDs and Games, Kurt Jellinek, has responded with an official statement regarding Ben Kuchera's accusatory piece.
Because of Mr. Kuchera's article, others on the web are using words like "gouging" and "repugnant" when referring to Slackers. I cannot begin to tell you how much this hurts. In this year alone, Slackers gave away more than $7,000 in product, gift certificates and donations to schools and churches in our community. Slackers is a good business citizen in its communities.
For the open letter in its entirety, keep reading past the jump.
Dec. 21 - Official StatementAn Open Letter to Slackers Customers and the Game Buying Community
December 21, 2007
In a December 20, 2007 article posted on the on-line site Ars Technica, author Ben Kuchera wrote a sensationalist article about Slackers, in which he makes a number of sweeping and factually incorrect statements about Slackers' practice of selling Nintendo Wii Game systems on eBay. In his article, Mr. Kuchera claims that Slackers "stockpiles" its entire allotment of Wii systems from Nintendo and sells them exclusively on eBay at substantial mark-up. This article is factually inaccurate, and unfortunately, other sites are picking up this story and spreading the misleading piece. In his article, Mr. Kuchera claims that he attempted to contact me, Slackers' owner, multiple times to comment on his article. That is simply not true. Had Mr. Kuchera contacted me, I would have told him exactly what I am telling you in this letter.
Slackers is a small, 11 store chain in Missouri and Illinois selling music, movies and games. Slackers prides itself on its commitment to its customers, and offers great products with great service at a fair price. We are not big box, and our customers like that. They like that they get friendly, knowledgeable service when they come into our stores.
However, being small has its disadvantages. Unlike the big box retailers, we do not get an "allotment" from Nintendo. Rather, like all small independent retailers, we must buy our product from distributors. Since November of this year, the total number of Wii systems Slackers has been able to acquire from distributors this holiday season is 44 units - that's it. With respect to nearly all of these systems, the units are held for a specific individual, e.g. loyal customers, family members, business associates, employees and friends - 35 of the 44 units Slackers was able to acquire this holiday season went to such individuals at the suggested price of $249.99 (our cost). If one of these customers paid for the system with a credit card, Slackers actually lost money on the system as the credit card company takes up to 3% of the sale.
What about the other systems? One was donated to a silent auction with the proceeds ($450) going to St. Louis Children's Hospital. Slackers will be giving away another Wii system on the radio tonight on the Hipp Nights show on the Big 550 AM, KTRS (please tune in)!
Does Slackers' sell Wii systems on eBay? Yes. This holiday season, Slackers has sold a total of 5 Wii systems on eBay at a price of $399.99, while a couple units remain in stock. Why do we sell the Wii systems on eBay? Like all small retailers we are trying to improve our profile on the web. We have a website and an eBay store site. By offering even a small quantity of a hot system like the Wii on-line drives many hits to our sites. As for the price, Mr. Kuchera claims we are "scalping." At the price Slackers offers on-line, when you factor our cost for the unit and shipping, and after eBay and PayPal take their cut, Slackers makes less than $75 per unit we sell on-line. For this holiday season, we made a whopping $375 from the eBay sales - that's it. We gave away 2 systems at a cost of $500, and on every other system, we either broke even or lost money. Slackers does not make money on the sale of Wii systems.
Because of Mr. Kuchera's article, others on the web are using words like "gouging" and "repugnant" when referring to Slackers. I cannot begin to tell you how much this hurts. In this year alone, Slackers gave away more than $7,000 in product, gift certificates and donations to schools and churches in our community. Slackers is a good business citizen in its communities.
Had Mr. Kuchera taken the time to fully research his article, he would have a much different picture about Slackers' practices and what we are all about.
To our loyal customers, thank you for your continued patronage.
Happy holidays!
Kurt Jellinek
President, Slackers CDs and Games
[image]
TexCub
Posted to Hot Stuff, Video Games on 22 December 2007
· Comments (8)
Other stuff like this: ars technica, auction, ebay, open letter, reponse, scalping, shortage, slackers, wii
Oh Mr. Jellineck...
At the price Slackers offers on-line, when you factor our cost for the unit and shipping, and after eBay and PayPal take their cut, Slackers makes less than $75 per unit we sell on-line.
As a avid E-Bayer, that sounds like a load of bull. According to Wiifanboy, the wholesale cost of a Wii is $195.99. So they make 55.00 per Wii sold at retail price.
All I know is this, Paypal and E-Bay, in no way takes $150 dollars in fees. If they did, no seller would be trying to sell the console on their site, they'd be opting for the local paper or online pages. The listing fee for a 400 dollar item is $3.60. If it sold, E-Bay wants $1.31 plus 3.25% for the amount over 25.01. Paypal takes a cut as well, but only 2.9% plus 30 cents.
All that does not add up to their profits being eaten by E-Bay and Paypal. Total, E-Bay and Paypal take less than 10%.
in response to Katsuya Kaiba's statement: if you had taken the time to read the open letter to Slackers customers concerning Ben Kuchera's article, posted by the president/owner of the company, you would have read that since Slackers is a small chain retailer. You would have read that our cost on the Wii system from our distributor, is 249.99. That means by selling the system in our stores, new, to make a profit we rely fully on people purchasing games, additional Wiimotes, or other accessories to make any money on the system at all.
i've been a Slackers employee for 4 years and i do not, for a second, question any of our business practices. We're simply trying to survive against competitors like GameStop and WalMart, national chains who have 11 locations in a 30 mile radius, to our 11 total locations.
Isn't selling a Wii online for more than the MSRP still scalping, no matter what the rationalisation behind it is and regardless if it's one or many?
@nicole - slackers employee
We're simply trying to survive against competitors like GameStop and WalMart, national chains who have 11 locations in a 30 mile radius, to our 11 total locations.
So...to compete against them, you jack up the price of your machine's higher than the retail price? That makes no bloody sense. Not to mention the Wii is in VERY high demand so it's not like they wouldn't sell. Also, a bunch of people are getting fed up with the practices of Gamestop recently anyway and don't care for Wal-Mart and because of this, go for smaller retail chains.
If you want to defend the practice, that's fine. It's your choice. However this practice can hurt your store seeing how it's spreading to many a Video Game website and any kind of scalping ticks gamers the wrong way. You guys need to do some damage control pronto.
Who is their distributor, Wal-Mart? Even as a small independent company, paying retail for a console seems really dumb.
Sadly, this open letter is misleading. The Wii system is not the only item Slackers diverts directly to EBay - In fact, they have a long history of doing this. When the Xbox 360 was launched, our original shipment were all sold on EBay as well. The same with the PS3, etc. The limited edition Halo 3 was another EBay only item we were not allowed to sell in the store. This seems unfair and very alienating to our customers and in the end they walk away with the sense we care more about profit than them...
There are many of our used items which are EBay only also. For example, Final Fantasy 7 is an EBay item. If a used copy of Final Fantasy 7 is traded in, it goes directly to EBay. It has been over three years since we have sold a copy of Final Fantasy 7 in the store. Customers ask for it all the time and we lie to them and say it's really hard to find when in reality you can buy it from our EBay store. To justify this by saying it's done only to promote the website would be a ridiculous statement.