Tuesday, 27 September 2016
Fun With Music Magpie
Following on from this post, this post and finally this attempt to understand the business model of Music Magpie and their imitators, I thought I'd try to have a bit of fun with them (I chose Music Magpie for this experiment as they are - by a country mile - the biggest reseller out there and they don't attempt to hide their identity when selling on Amazon, unlike some of their rivals). I wanted to see how low they would go on a particular album. Their normal policy - if they had the album in stock - seemed to be to set their price at £0.01 lower than any rival (with certain caveats, as previously discussed). So, if another Amazon seller priced at (say) £7.99, they would price at £7.98; if another offer was £2.50, they'd go £2.49, and so on, all the way down to £0.01. Bearing this in mind, my original intention was to find an album that they - and I admit there was some guesswork here - only had one copy of, then beat them down to a penny, then buy their copy for £0.01 plus the mandatory £1.26 postage. Then I'd sell it back to them, as their buying price would automatically - I assumed - revert to the higher value.
But this didn't quite work out.
The album I chose for this experiment was this one:
When I first looked into it, Music Magpie did not have a copy available on Amazon and so were willing to pay £2.30 for a copy (this has later significance), just to get into the market. Obviously I didn't take them up on the offer; the cheapest copy on Amazon at the time was about £14 or so.
However, at some point in between me writing the original pieces and today, they must have managed to get hold of a copy. As per their normal arrangement, they then set their price at a penny less than the other cheapest seller. I think at the time it was £13.14, or similar. (Incidentally, the buying price on their site fell to £0.68 at the same time, which is actually quite high for them - their average buying price - considering all albums across the board - is about 33p).
Now, I didn't take proper notes to begin with, I just listed my copy at about ten quid. Music Magpie had adjusted their offer to £9.99 within the hour.
So then I went straight down to £7.00. Again, within the hour they were at £6.99.
Next I went to £4.00. They went £3.99. I went £3.96, they went £3.95.
At this point I started making notes, and this is how it all played out:
26/09/16, 4.53pm, I reduce to £3.88. I was lowest for precisely half an hour, at which point Music Magpie reduced their price to £3.87.
26/09/16, 5.27pm, I go straight down to £2.77. By 5.58pm Music Magpie were listing at £2.76. It was becoming obvious that they - or their automated system - checked prices every half hour and adjusted accordingly.
26/09/16, 5.59pm, down I go again, but this time to £1.73. Naturally I was expecting them to go to £1.72 by 6.30pm. But they didn't. They had however reduced their price to - guess what? - £2.30.
By 6.47pm it became clear that they weren't going to budge. Had I found their limit? To try to find out, I increased my price to £1.99 to see if they would go down any more. But they resolutely stuck to their £2.30.
So at 7.02pm I increased again to be one penny lower than their offer, i.e. £2.29, to see if this would tempt them into moving down from £2.30. It didn't. They were still on £2.30 at 7.56pm and again when I checked at 9.16pm. And at 10.33pm.
Just to check my theory, I increased to £4.44 at 27/09/16, 12.04am, to see if they would maintain their low price, or adjust accordingly. And as expected, they increased their price to £4.43 within half an hour.
So, I reckon I've found their formula and plan to have a lot more fun with it in the future. It's not that I have anything against them, but I think it pretty much proves their sharp practice.
[Edit @ 27/09/16, 1.14am: I put my copy up to £6.44 once I'd discovered their price floor for this album, as I don't particularly want to sell it. But Music Magpie only increased their price to £4.98, which seemed odd. Aha! Someone else had a copy available for £4.99. Mystery solved].
[Edit @ 27/09/16, 12.30pm: Out of interest, I checked the listing again and Music Magpie had increased their price to £6.43 (a penny below my price, as previously mentioned). So whoever had the £4.99 copy either removed it or sold it, thus allowing Music Magpie to potentially squeeze a couple more quid out of the deal if possible].