How do shops get away with outrageous trade in prices?

Completionist

Karmafaerie wrote: »

Well they do have little things like renting the premises, staff wages, electricity, VAT, city rates, rubbish charges, paying off the franchise charges, water charges, etc, etc, etc......

IMO, the only thing more annoying than shops robbing people, is people who think that opening up a store is as easy as Open store.........make money.

For every €20 profit that you just pointed out, that's really about €5 if they're lucky in most instances.

Nothing you said has any relevance to what i said

You seem to have misunderstood me.

1. They trade you €20 credit for the game - Shop is down €20
2. You spend that €20 credit on goods - Shop gained profit
3. They sell that game for €20 - Shop gains back the €20

It is really more of a means to shift stock than anything else. At the end of the day, They have still made the same profit as if you had gone in there and spent €20.

I never said it was a viable method to do business, And your post seems to be directed at me.

cloud493

Dublindude69 wrote: »

Some of it could be because without online codes a lot of people won't buy second hand games. I was told by someone that his store are having massive problems selling second hand titled like Fifa 12 and Battlefield 3 because of this. He told me that pretty much every traded copy of these two games sold come back the next day so I'm guessing they are making a big loss on these titles.

Which is of course their intention(publishers putting in online). So I'd have thought their strategy should be to price games that require online codes low, so then people won't be paying for an overpriced pre owned game and an online code. Yet, again, they don't.

wnolan1992

To be fair, it could be much worse. They could not take trade in's at all and force you to buy the new game(which I do anyway 'cos I've been burned by used games in the past). People here are complaining that they have a huge mark up? So what? It's called business. If you can save 10e by buying Uncharted for 40e instead of 50e, what does it matter to you that the shop has just made 34e profit?

It's simple really, if you don't like the price they're offering, don't sell it. If enough people do that, they'll put up their offered prices.

deathrider

Dublindude69 wrote: »

Some of it could be because without online codes a lot of people won't buy second hand games. I was told by someone that his store are having massive problems selling second hand titled like Fifa 12 and Battlefield 3 because of this. He told me that pretty much every traded copy of these two games sold come back the next day so I'm guessing they are making a big loss on these titles.

I reckon the prices were rediculous because all that online pass milarky kicked into play.

Absolam

Completionist wrote: »

Nothing you said has any relevance to what i said

You seem to have misunderstood me.

1. They trade you €20 credit for the game - Shop is down €20
2. You spend that €20 credit on goods - Shop gained profit
3. They sell that game for €20 - Shop gains back the €20

It is really more of a means to shift stock than anything else. At the end of the day, They have still made the same profit as if you had gone in there and spent €20.

I never said it was a viable method to do business, And your post seems to be directed at me.

I think it's a little more complicated than that.

1. They trade you €20 credit for the game - Shop is down €20
2. You spend that €20 credit on goods for €20; if they paid €20 for them they're now down €23.74 (the €20 they paid for the game you bought, and the €3.74 VAT they have to pay for selling you the game).
3. They sell your game for €20 and pay €3.74 VAT again, so now down €7.48

Then they have to pay for renting the premises, staff wages, electricity, city rates, rubbish charges, water charges etc etc on top.
So Amacachis post

amacachi wrote: »

The really annoying things about trade-in prices is that even if a shop gave, say 20 quid credit and then sold that game for 20 cash they're still making a profit. When they're putting a huge mark-up on top of that it shows just how big some of their margins are.

and your own are overly simplistic.
From the above example, the shop would need to trade in another game for €1 as well, and then sell it for €10.43 just to cover the cost of the transactions above, without paying any bills or making any profit.... !

cloud493

But then their strategy should be to sell more with lower prices, not raise the price.

Absolam

Exactly; to sell more with lower prices means lowering the trade in prices. Which causes people like the OP to complain about outrageous trade in prices.

cloud493

But they don't lower the selling price(for them to sell) thats the point. If anything, their more expensive.

Mikeyt086

Just wanted to say, I work in an Xtravision and €6 for Uncharted 3 is not right at all. I dont know where you were told that, or why you were told that (I'm guessing the CSR who served you searched Uncharted 2 by mistake and gave you the price for that?) but I traded one in this morning for €30 credit, which was chosen instead of €25 cash.

General consensus is, if a pre-owned game is €40, we offer €30 credit, €25 cash. eg. MW3, Skyrim, Battlefield 3, Batman AC.

Absolam

So... Buy for €30 and sell for €40, that's a 7.7% margin. Hardly outrageous. Unless you're a shareholder, in which case you might want to invest elsewhere

cloud493

Mikeyt086 wrote: »

Just wanted to say, I work in an Xtravision and €6 for Uncharted 3 is not right at all. I dont know where you were told that, or why you were told that (I'm guessing the CSR who served you searched Uncharted 2 by mistake and gave you the price for that?) but I traded one in this morning for €30 credit, which was chosen instead of €25 cash.

General consensus is, if a pre-owned game is €40, we offer €30 credit, €25 cash. eg. MW3, Skyrim, Battlefield 3, Batman AC.

That sounds more reasonable :P it was the one in swords.

Chris_Heilong

we should take 50 euro and just stand by te counter of one of those places, when you see an almost new game being traded in and the shop offers €8 just offer the customer €10. If you are kicked out of the shop at least you got a good deal and you can move on to the next place as there are so many of these places.

cloud493

When I was in gamestop in 2010, I was trading in assasins creed 2, which they were selling for 40 euro at the time. They offered me 6 or 8 euro, very small amount, so I said no. Chap next to me was buying the same game, same console. so I sold my copy to him for 25 quid. He was happy, I was happy. They(gamestop staff) told me to get out, haven't been back since.

Absolam

cloud493 wrote: »

When I was in gamestop in 2010, I was trading in assasins creed 2, which they were selling for 40 euro at the time. They offered me 6 or 8 euro, very small amount, so I said no. Chap next to me was buying the same game, same console. so I sold my copy to him for 25 quid. He was happy, I was happy. They(gamestop staff) told me to get out, haven't been back since.

Hmm.

cloud493 wrote: »

How do shops get away with such poor value trade in prices? For practically brand new games, its absurd. Case(s) in point
3. We were in gamestop today, some lad with his dad was selling a fair few games there, at least 15 games or so, including modern warfare 3, and the new assasins creed. They got offered 54 euro in total.

cloud493

Absolam wrote: »

Hmm.

2 different gamestops maybe? One in swords, one in henry street :rolleyes:

Karmafaerie

Completionist wrote: »

Nothing you said has any relevance to what i said

You seem to have misunderstood me.

1. They trade you €20 credit for the game - Shop is down €20
2. You spend that €20 credit on goods - Shop gained profit
3. They sell that game for €20 - Shop gains back the €20

It is really more of a means to shift stock than anything else. At the end of the day, They have still made the same profit as if you had gone in there and spent €20.

I never said it was a viable method to do business, And your post seems to be directed at me.

I'm sorry mate, but you really don't seem to understand how a shop works.
The very fact that the shop is open means that they are starting this transaction at a loss. The wages, rent, etc I mentioned mean that they go into the transaction needing to make a profit to just break even.
You used a €20 transaction in your list, so lets work with that.
The running cost breakdown would probably be at around €15 for that, meaning that the shop has to make €15 profit to break even, before they start to make money.

So bearing that in mind, lets look at your list.

[*]The shop starts at -€15.
[*]They trade you €20 credit for the game - Shop is down €20
[*]So the shop is now at -€35.
[*]You spend that €20 credit on goods - Shop gained profit
[*]Shop pays VAT at 23% now on that profit, meaning the €20 becomes €16.40.
[*]So the shop is now running at -€18.60
[*]They sell that game for €20 - Shop gains back the €20
[*]Again paying VAT bringing it down to €16.40
[*]So for all that effort, the shop makes a whopping profit of.......-€2.20!



So you see, your business model will cost the shop money.
Why would this make any sense?

I'm not trying to have a go, but it's a lot more complicated than you make it out.


EDIT: Just saw that Absolam had beaten me to it, could have saved myself a lot of time!

Gonzo

i never resell any of my games to shops even the games werent great in the end, ive often gone back and replayed games over and over and this is a much better return than a few euro handed out by shops for even the latest titles second hand. And as for Gamestop, well ive often seen second hand games in there selling for 40/50 Euro while at the same time being sold for less than 30 in GAME or HMV for new sealed copies.

Mikeyt086

Gonzo wrote: »

i never resell any of my games to shops even the games werent great in the end, ive often gone back and replayed games over and over and this is a much better return than a few euro handed out by shops for even the latest titles second hand. And as for Gamestop, well ive often seen second hand games in there selling for 40/50 Euro while at the same time being sold for less than 30 in GAME or HMV for new sealed copies.

I am the opposite. When I am done with a game, I trade it in.

I tend to get a game, play it to death, then cash in a month or two later when a new game comes out and most cases I can pick that up for no more than €10.

I never have more than 5/6 games at a time, I dont see the point if it is just sitting there. And if I have held on to it for long enough for the trade in prices to be muck, I sell/swap it on adverts.

Not having a go at the poster I quoted here obviously, but it really bothers me when people give out about the price they get offered for a game that is around 6 months old or older (also not about the OP, he was misinformed). Games companies only want new games to sell pre-owned, as these are the only ones consumers want. I had someone come in to me in Xtravision last week and handed me a copy of PES 2009, I said "You wont get much for that." and he said "Ahh yeah I'm only looking for Microsoft Points", but I scanned it in and the system said I could offer him €0.01, he went nuts. I calmly explained that if we took that game off his hands, it would sit on our self unsold. We already have around 15 copies of it, there is no plus for us in taking it.

Moral of the story, only trade in your games if they are worth something. If it has been out over 6 months then dont expect to get more than €20, it all depends on demand, if the shop has loads of them or game is not selling well then they cant take the risk of a big loss on it.

Completionist

Karmafaerie wrote: »

I'm sorry mate, but you really don't seem to understand how a shop works.
The very fact that the shop is open means that they are starting this transaction at a loss. The wages, rent, etc I mentioned mean that they go into the transaction needing to make a profit to just break even.
You used a €20 transaction in your list, so lets work with that.
The running cost breakdown would probably be at around €15 for that, meaning that the shop has to make €15 profit to break even, before they start to make money.

So bearing that in mind, lets look at your list.

[*]The shop starts at -€15.
[*]They trade you €20 credit for the game - Shop is down €20
[*]So the shop is now at -€35.
[*]You spend that €20 credit on goods - Shop gained profit
[*]Shop pays VAT at 23% now on that profit, meaning the €20 becomes €16.40.
[*]So the shop is now running at -€18.60
[*]They sell that game for €20 - Shop gains back the €20
[*]Again paying VAT bringing it down to €16.40
[*]So for all that effort, the shop makes a whopping profit of.......-€2.20!



So you see, your business model will cost the shop money.
Why would this make any sense?

I'm not trying to have a go, but it's a lot more complicated than you make it out.


EDIT: Just saw that Absolam had beaten me to it, could have saved myself a lot of time!

Yes Absolam has proven me wrong, Im not trying to justify my flawed idea but...

Your argument is also flawed. It is based on the idea that the shop will only have 1 customer per hour, And that 1 customers actions will have to cover the running costs of the shop.

Lets say they are doing it as a service to the people, Or to attract more customers. The running costs will be the same whether or not they offer the service therefore they shouldn't come into the calculation.

So lets assume the shop has 10 transactions per hour, that means the running cost will be split between those transactions bringing it down to €1.50 each. Using your model above that would mean the shop would gain a total profit of €11.30, rather than -€2.20

I think this is also wrong however as it fails to take into account the cost of the item(When the shop purchased from suppliers), Which when taken into account would mean the shop would barely make any profit.. if even.

Karmafaerie

Completionist wrote: »

Yes Absolam has proven me wrong, Im not trying to justify my flawed idea but...

Your argument is also flawed. It is based on the idea that the shop will only have 1 customer per hour, And that 1 customers actions will have to cover the running costs of the shop.

Lets say they are doing it as a service to the people, Or to attract more customers. The running costs will be the same whether or not they offer the service therefore they shouldn't come into the calculation.

So lets assume the shop has 10 transactions per hour, that means the running cost will be split between those transactions bringing it down to €1.50 each. Using your model above that would mean the shop would gain a total profit of €11.30, rather than -€2.20

I think this is also wrong however as it fails to take into account the cost of the item(When the shop purchased from suppliers), Which when taken into account would mean the shop would barely make any profit.. if even.

I'm sorry mate, but I've spent a long time working in the industry.
I know what I'm talking about.

My estimates were based on the average running costs of a mid-large sized store, employing a dozen people, in Dublin.

These types of stores have to break €20-30,000 a week before they make any money.
Depending on how much their franchise and rent costs.

Shops that sell second hand games make almost nothing from them.
It barely breaks even.
They do it as a way to bring customers in as much as anything else, and because other shops do it, so they can't be seen as not doing it.
They hope that you'll bring in old stuff to sell so you can use that credit to buy new stuff are where they make the money.

Somebody coming in with 20 games or 100 dvd's to trade in, will take time that could be spent with a customer buying a tv, or a PS3, or an Ipad.
They have teams of people employed to just make their trade in prices.
They check the entire market to try and make sure that they at least break even.

Game/Gamestop/HMV/CEX etc make their money from high price items.
Game trade ins simply don't make money, so why would the shops take a loss on them?

As I said, the real reason that they do trade ins, is to encourage people in, and because they can't afford not to if other shops are.

I'm sorry man, but like I said, it's part of my job.

mossy2390

Karmafaerie wrote: »

I'm sorry mate, but I've spent a long time working in the industry.
I know what I'm talking about.

My estimates were based on the average running costs of a mid-large sized store, employing a dozen people, in Dublin.

These types of stores have to break €20-30,000 a week before they make any money.
Depending on how much their franchise and rent costs.

Shops that sell second hand games make almost nothing from them.
It barely breaks even.
They do it as a way to bring customers in as much as anything else, and because other shops do it, so they can't be seen as not doing it.
They hope that you'll bring in old stuff to sell so you can use that credit to buy new stuff are where they make the money.

Somebody coming in with 20 games or 100 dvd's to trade in, will take time that could be spent with a customer buying a tv, or a PS3, or an Ipad.
They have teams of people employed to just make their trade in prices.
They check the entire market to try and make sure that they at least break even.

Game/Gamestop/HMV/CEX etc make their money from high price items.
Game trade ins simply don't make money, so why would the shops take a loss on them?

As I said, the real reason that they do trade ins, is to encourage people in, and because they can't afford not to if other shops are.

I'm sorry man, but like I said, it's part of my job.

not so sure about that really, the shops make more off the pre-owned stuff than the new ones, be it consoles, games or accessories.
i work in one at the moment and there always bugging us to sell the pre-owned stuff before the new because there's more profit in it than the new copies.

say its 50e for a new game, thats bought from the supplier for around the 30-35e mark. it then sits in a warehouse for a while, is moved around by staff, takes up space, its then is boxed up and shipped down to the store, where it is sorted, some gets priced on the floor, most again go into storage,
so for that 15-20e there is a lot of holding costs, shipping and staff costs.

compared to pre-owned, cost of buying it off the customer say 6e,
all that happens to it then is the game is taken out, a price of 20e is put on it and its thrown on the floor to sell.

there is no delivery costs, relatively low storage costs unless its something like fifa 10 where there's 50 of them on a shelf in the back. the staff cost is minimal as a price sticker and barcode needs to be put on.

ok its not a straight 14e in the pocket but there's less cost associated with that 14e than the 15e of the new copy.

also if someone sees they can get 2 games for 40e instead of 1 new one for 50e then that's all the better.

same with the consoles, the customer gets say for 100e for a xbox, its put in the back for 185e.
compared to a new one that sells for 250e there is very little profit in the consoles, even for the manufacture