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How do the e-bay sellers do it?

heavyd

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Can someone please explain how GVH and others obtain present season RLPL, etc. and sell it at wholesale prices on e-bay?

How is it that PL shoes on the website for retail $850 now sell at $158?

Various $2895 suits for $495?

Doesn't this practic errode the retail value of the brand?
 

mack11211

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Ebay merch may be overstock/last season.

In the garment world, much of this is produced because it's less damaging to keep the factory running making overstocks than to shut down production. If you want to keep your workers, it's best to keep them employed.

B&M retailers may have price-defining contracts with the designers/ manufacterers (is this legal anymore?), while ebay folk such as those above, and other online discount sites such as yoox, bluefly, stp, etc., do not.
 

rnoldh

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Much of the above might be true.

But, I've noticed that RLPL items in particular are available at very deep discounts, usually on Ebay!

10% of retail for NWT items are common. Just recently I recall someone posting on the "Recently Bought Thread" a NWT $3000 Shearling RLPL coat for $350 and another buyer getting a $2595 100% RLPL Cashmere sport coat for $250!

And that includes very desirable RLPL stuff too. Solid colored RLPL suits, and nice shirts sell at very deep discount.

I don't recall many, or any, Oxxford, Brioni, or Kiton, desirable NWT items going for 10% of retail. Or anything close.

Does anyone have an idea why so many RLPL items are sold at a deep discount. It makes me wonder how many people buy RLPL at full retail, and in essence if there really is "A Full Retail" RLPL price?
 

zjpj83

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I've bought lots of items at 90% off at various sample sales. Some even better ($600 Stuart's Choice for $25 spring to mind).

It's a matter of accounting in my opinion. Unsold stock sitting around is not good for the balance sheet. So why they sell them at deep discount is easy. They want to unload merchandise and bring new in.

The real question is why they produce too much in the first place. Why don't they just make enough to sell at full MSRP, and then they're all sold out.

I'm not sure. My guess is that for a company like RL marks up its clothes a lot. Its $695 cashmere RLPL sweater is not worth $695. So, their target is not just one consumer. There will be 1) The guy who doesn't care about money and wants an RLPL cashmere sweater for $695; 2) The guy who likes the sweater but will only buy it on sale at 40% off; 3) The guy who likes the sweater but will only buy it for $150 at an outlet or on Ebay. My guess is that RL's cost is at most that $150 if not less. By making more than they can sell at full retail, they take advantage of every target purchaser - the dude who will pay the inflated price, the dude who will pay the normal price, and the dude who will pay the wholesale price. That's my guess, anyway. It's the same thing airplanes do - they know they have rich and poor customers. And on the same flight you could be sitting next to someone who paid hundreds of dollars more for their ticket than you. But by balancing out the businessmen whose companies buy their tickets last minute at full price and those students who bought their on Expedia, it all kind of evens out.
 

Jared

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Speaking of eBay, I assume the massive Thanksgiving to New Years sales in the US, plus gift giving and rejecting, cause an annual cycle? Which mid- to high-end goods are affected by this, by how much, and when?

(There're a number of wardrobe basics that I can wait a few months to acquire and I'd like to try my hand at market timing.)
 

mack11211

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For timing, wait till after New Year's. Then the sales are raging online as well as off.

For best ebay prices, buy out of season.
 

pscolari

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I am surprised Polo sells shoes to GVH without trying to unload them by themselves. There are numerous sales throughout the year both online and in B&M at Polo which lowers the price but overstock still remains. Given the amount of RLPL and Polo GVH sells on ebay, I would think there would be an outlet market Polo could capture with this inventory. I have seen Polo Footwear outlets (Wrentham for example) but they do not sell C&J or EG. Do you think they have a price minimum set with EG they have to maintain for retail/outlet (if any) sales?
 

dkzzzz

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Originally Posted by rnoldh
Much of the above might be true.

But, I've noticed that RLPL items in particular are available at very deep discounts, usually on Ebay!

10% of retail for NWT items are common. Just recently I recall someone posting on the "Recently Bought Thread" a NWT $3000 Shearling RLPL coat for $350 and another buyer getting a $2595 100% RLPL Cashmere sport coat for $250!

And that includes very desirable RLPL stuff too. Solid colored RLPL suits, and nice shirts sell at very deep discount.

I don't recall many, or any, Oxxford, Brioni, or Kiton, desirable NWT items going for 10% of retail. Or anything close.

Does anyone have an idea why so many RLPL items are sold at a deep discount. It makes me wonder how many people buy RLPL at full retail, and in essence if there really is "A Full Retail" RLPL price?


Just a guess, but
Too much overproduced: Such overproduction in a car industry, for example, would have bankrupted the maker in a few years and eroded the retail prices.
But:
My conclusion is that RL has gotten so big and has so much leverage in negotiating huge production deals with different manufacturers that they lower their prices significantly for him in exchange for volume. Thus RL can recoup expenses on retail side and dump the overstocks at next to nothing prices in order to pay banks interest and have quick working-capital turn-over.
 

kirbya

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Where are the best deals to be had on eBay? I just did a search for RLPL shoes, and although they are selling much cheaper than full retail, they are doing so only by a margin of 50%... good, but not "out of this world." Where else have you had success on eBay? Aka. what other brands?

Kirby
 

zjpj83

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Originally Posted by kirbya
Where are the best deals to be had on eBay? I just did a search for RLPL shoes, and although they are selling much cheaper than full retail, they are doing so only by a margin of 50%... good, but not "out of this world." Where else have you had success on eBay? Aka. what other brands?

Kirby

Shoes rarely go for more than 50-60% off MSRP in my experience, either on Ebay or otherwise. You are much likely to get clothing on a better sale than shoes. I don't know why that is, but it's my experience.
 

auto90403

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Originally Posted by zjpj83
I've bought lots of items at 90% off at various sample sales. Some even better ($600 Stuart's Choice for $25 spring to mind).

It's a matter of accounting in my opinion. Unsold stock sitting around is not good for the balance sheet. So why they sell them at deep discount is easy. They want to unload merchandise and bring new in.

The real question is why they produce too much in the first place. Why don't they just make enough to sell at full MSRP, and then they're all sold out.

I'm not sure. My guess is that for a company like RL marks up its clothes a lot. Its $695 cashmere RLPL sweater is not worth $695. So, their target is not just one consumer. There will be 1) The guy who doesn't care about money and wants an RLPL cashmere sweater for $695; 2) The guy who likes the sweater but will only buy it on sale at 40% off; 3) The guy who likes the sweater but will only buy it for $150 at an outlet or on Ebay. My guess is that RL's cost is at most that $150 if not less. By making more than they can sell at full retail, they take advantage of every target purchaser - the dude who will pay the inflated price, the dude who will pay the normal price, and the dude who will pay the wholesale price. That's my guess, anyway. It's the same thing airplanes do - they know they have rich and poor customers. And on the same flight you could be sitting next to someone who paid hundreds of dollars more for their ticket than you. But by balancing out the businessmen whose companies buy their tickets last minute at full price and those students who bought their on Expedia, it all kind of evens out.


This is mostly correct.

Gross margins on clothing are enormous. They have to be. How many $3000 OTR sports coats do you think Neiman-Marcus can sell at that price? (If they do manage to sell one, the sales clerks are high-fiving each other in the back room.)

Retailers almost never lose money on merchandise. A deeply discounted item will still sell for more than it cost. What a low price may not cover is general and administrative costs, debt service, capital costs, and other such costs. Which if they're not covered will eventually put the retailer out of business.

But in the short term, the policy is to markdown slow-moving merch, accept that this may eat into profits and hope that next year's look will be a hot one so that the merch flies off the racks without needing to be discounted.
 

Zeriman

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Originally Posted by auto90403
This is mostly correct.

Gross margins on clothing are enormous. They have to be. How many $3000 OTR sports coats do you think Neiman-Marcus can sell at that price? (If they do manage to sell one, the sales clerks are high-fiving each other in the back room.)

Retailers almost never lose money on merchandise. A deeply discounted item will still sell for more than it cost. What a low price may not cover is general and administrative costs, debt service, capital costs, and other such costs. Which if they're not covered will eventually put the retailer out of business.

But in the short term, the policy is to markdown slow-moving merch, accept that this may eat into profits and hope that next year's look will be a hot one so that the merch flies off the racks without needing to be discounted.


I have a friend who used to work at Macy's a while back where he received a very hefty employee discount. He once purchased a tie that was on closeout and heavily marked down. Once his employee discount was taken into account he was only paying around 7% of retail. But then he looked into their computer system to see what the cost of the item was, and Macy's was still making a 30% profit. On most clothing items the margins are just huge. But this of course is not considering Macy's overhead which is quite large (cost of employees and buildings, etc.) so their margins in a true business sense are not that large.
 

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