Friday, 16 September 2016

The Business Of Second Hand CDs (2/2)

So (1/2) was broadly about what the CD resellers are prepared to pay, in general, for a CD.  And as I mentioned, all these companies have different strategies for selling, so aren't completely comparable.  Interestingly, some items (i.e. those that none of the major resellers have) seem to be traded on a name-your-price basis, but some, curiously, aren't (of which more later).

Going back to the original 100 albums I got a price for (in 1/2), I then had a look at what they were selling at on Amazon (which is where most of the big resellers reside; ebay does come into to the picture, but not on the same scale; although some of the big players use both, it seems that Amazon takes most of the volume).

Music Magpie

As aforementioned, MM were willing to pay a price for each of the 100 CDs; of these, their offer was £0.05 (their minimum offer) for 19 of them, £0.12 - £0.30 for a further 67 and £0.35 up to a £1.00 for the next nine.  Of the final nine, they were willing to offer between £1 and £2 and for the final three, £2.30, £2.50 and £2.50.

Unsurprisingly - as the major player - they have, as a rule, the lowest price on any item that they have in stock.  For (I would estimate) about 40% of these items, this price is £0.01 (plus the £1.26 postage and packing).  For about another 40% of their stuff, they trade at a slightly higher level - usually from £0.15 to about £0.45) - but always ensure that they match the best price if someone else has a copy.  For about 10% of their stuff, they and someone else have a copy, and these items go for curious prices - £2.13, £3.45, £6.95, whatever.  Again, it seems algorithmically-based, as they always match the best price.  Occasionally they go a few pence more, but only if their copy is in better condition than the cheapest offer, and even then it's only ever by a such an insignificant amount as to make no difference.

What was notable about their selling pricing model at the lower end of the market is that it doesn't necessarily correlate with their buying model.  They don't sell all the CDs they buy at £0.05 at a penny, which would be the expected model.  Granted, they sell at a penny on most of them, but it's equally likely to be an another smallish amount - mainly up to about a quid, but I have seen as high as £3.05.  And (yet again) this must be based on some sort of algorithm, as their penny-plus price "just happens" to match - or beat by a penny - the price of the next best vendor.   However, for a lot of their penny CDs, they don't just pay you £0.05.  It could be as much as - and hold onto your hats now - as much as £0.20 each!  I feel sure that this must just be related to the number of copies they have in stock at that time rather than anything more sinister.

On the higher-value items, look out if they're ever willing to offer a price greater than £0.30, as they will be selling it on Amazon for more than £2.00 (often a lot more).  And if they ever offer more than £1.00, it almost certainly means that they don't have it, in which case the Amazon price is likely to be quite high.

Sometimes they haven't got a used copy, but list a "New" copy, generally at a premium price (£7.99 plus).  This only happens when the generally-available price for a new copy of the album is in the price range of a new, physical album (like you'd buy off he shelf at HMV or whatever), so that's pretty much £7.99 - £9.99.

The only times they don't seem to compete is when the only copies available are from other resellers at (generally) absurd prices (£30.00 plus and almost always from Japan).  Hell, Music Magpie sell millions of used CDs a year, I guess they can afford to ignore these weird outliers.  Their model is one of bulk, but (I'm sure) has other aspects, which I shall wildly speculate about later.


This lot, I'm including, as they also opening sell on Amazon, but seem to be a different kettle of fish entirely.  I'm not entirely sure what their model is; it seems as though it's designed to not lose money, rather than aggressively pursue it.  Almost without exception, if they have a used CD in stock to list, irrespective of condition, they'll list it at £1.49 (plus £1.26 P & P).  Doesn't matter if there's one seller cheaper, or fifty sellers cheaper, they hold steady at £1.49 (plus P&P yada yada yada).

Again, they have their own outliers, where the competition is minimal, in which case they tend to go £7.99 or £10.79, whichever is closer to the other sellers).  Possibly interestingly, the only time that they seem to break with these rules is when they and Music Magpie have the same product, in which case they tend to either go a penny above Music Magpie, or undercut them by a quid or more.  There isn't much more of a pattern to it, so far as I can tell.

As for their buying strategy, it's an interesting one.  £0.12 is their minimum (and their default for 66 of the 88 that they accepted). They'll go up to £1.00 or so for things that they're selling for £3.00 or more on Amazon (or simply don't have).  That accounts for all but five, which they'll give you between £1.77 to £4.39 (it's worth saying that this was the highest offer for any CD from any of the four companies I checked).  And, as with Media Magpie, check out anything for which they are prepared to part with more than £0.30, as it'll almost always be sellable on Amazon for ten times that or more.


Ziffit and Zapper - although I can't explicitly identify their reseller identities on Amazon - fall into the - actually quite big - chasm between these two models and I'm pretty sure they're operating there somewhere under some name or other (OnlineMusicFilmsGames and Revival Books, for instance, are quite apposite-looking vendors, but there are numerous others).  Most listings have tens of sellers with the same names cropping up again and again; I would find it almost impossible to believe that these companies don't have selling identities on there somewhere.

For info, of the 74 CDs Ziffit were prepared to take, their prices varied from £0.13 to £2.50 (although it should be said that 68 of them were a quid or less, the beyond-a-quid stuff was very rare.

And Zapper (which accepted 91 - see 1/2) did give the best overall price for the 100 CD lot.  But to be honest, it's pennies.  Their offers go down to £0.03 (maybe lower but I've not seen any yet) and mainly stay below £1.00 (81 of the 91).  The reason their offer looks better is that they generally outdo the other reseller sites by a few pence here and there and it all mounts up, but as I mentioned, it's just pennies really.


Was there meant to be a conclusion?  I forget.  I know, I'll reproduce that table from the last page for the 100 representative CDs:

- Music Magpie would accept 100/100, minumum £0.05/CD, maximum £2.50/CD, total £32.67
- Ziffit would take 74/100, minumum £0.13/CD, maximum £2.50/CD, total £28.00
- Momox would accept 88/100, minumum £0.12/CD, maximum £4.39/CD, total 31.34
- Zapper would take 91/100, minumum £0.03/CD, maximum £3.57/CD, total £41.57

I've no intention - as I might have mentioned before - of selling any CDs, but if you are, there's a few things that stand out from the figures:

(1)  Make sure you know what you've got.  It's a pain in the arse comparing the sites, but it does expose interesting differences, most notably that there isn't a single site that gives a "best price".  As they will accept everything, it's worth using Music Magpie for this; they have a decent input system and will provide you with a ballpark figure for comparisons;

(2)  Once you've identified something vaguely worth something don't even consider selling to any of these resellers (or any other company that I've found).  If you can put in a few minutes effort, you can generally list it yourself on Amazon and get a far better price (see (4) and (5) below);

(3)  Inevitably, you'll be left a load of albums that are Amazon penny albums (generally with a large number of sellers, all selling at a penny).  These frankly aren't worth listing yourself (minimum £1.20 postage, minimum £0.07-ish for a padded envelope so - given a £0.01 selling price and mandatory £1.26 P&P - there's any potential profit wiped out, not to mention Amazon fees).  You could try dividing them into job lots and selling them that way, but watch the postage costs;

(4)  If the album's on sale (from Music Magpie or one of its alternatives) for more than about £0.50, it's probably worth listing it yourself, if you've the time.  Don't forget though, that Music Magpie will always undercut you by a penny, unless your copy is listed in better condition than theirs, in which case they'll probably go a few pennies more.  It all depends on your time and inclination, but assuming you get the price, you'll be making about 40-odd pence on each album doing it this way (and obviously more if you can get a higher price);

(5)  If all four companies are prepared to pay more than £1.00 for a CD, it almost certainly means that it's not in stock at any of the main players (I've only found a couple of minor exceptions so far), but you can generally sell them for well over a fiver each by listing yourself;

(6)  Shop around, these sites are in competition with one another.  For instance, Zapper was prepared to pay £1.25 for a CD that Music Magpie would only give £0.05 for.  For a different CD, Zapper would give £2.57, whereas the other three wouldn't go anywhere near a quid.  It does tend to be that Zapper will give the best price on the stuff that they'll actually take, but not always; there's no secret formula here that I can identify;

(7)  Almost certainly amongst the above group, you'll find yourself with something that is either listed as "out of stock" with all sellers, or is priced obscenely (£33.36, £47.34, etc.).  This seems to be a "name your price"-type situation, but unless you do genuinely have something rare to offer, it's price-gouging really.  For instance, I've got the album selling second-hand at £47.34 and could come swooping in as a new seller priced at £45.00, but I doubt anyone would buy it!  Sometimes I think that these must just be test listings and if the items were ever to sell, the vendor would have a bit of a problem...

If you really are short on time and simply want to clear out all your CD albums, I'd advise giving them to charity.  But if you really must realise some money for them Music Magpie is the one to go for, for the simple reason that they'll take the lot in one go with minimal hassle.  You will, however, get the overall worst price.  So if you are indeed hell-bent on getting shot of those CDs without having to list them yourself, at least shop around a bit.

Meanwhile, I've not finished with these companies yet, as I think there might be a chink in their armour that will allow the little guys to compete.  I'm pretty sure that - for the "high value" CDs at least - there's a potential method of playing the major sellers off against one another.  As the majority of their pricing is algorithmically-based, it should be a simple matter to undercut them all with a penny CD and watch them go from - to pluck a figure from the air - £5.50 straight down to £0.01 in order to price-match.  I would then withdraw my copy - providing it hadn't sold - and snap up all the penny copies for myself, then re-list them at a more sensible price.  It's a highly risky strategy - and borderline immoral - but I reckon I could pull it off.

Will let you know.

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