Is Mr. Ross “clueless” about basic economic realities ?


Yes, he’s at it again (IMO), trying to make reality fit into his preconceptions. In a recent blog post entitled, “KL Homme And The Contrived Market For Vintage Fragrances (Not a Fragrance Review),” he tells us that he purchased a two ounce bottle of KL Homme at a local (Connecticut) store for $36.33. He then proceeds to talk about how much he apparently hates many ebay sellers (note that I have hardly ever sold fragrances on ebay and that was years ago, in an attempt to clear out the “low end” stuff that was accumulating, so I do not feel any personal offense here). By contrast, if you have been reading my blog lately, you know that my contention is that the best explanation for sales on ebay involves a “fan base” being established for these kinds of scents many years ago.

Now in the case of KL Homme, it may be that it was never all that popular – I certainly have no idea. However, having followed prices on ebay for these kinds of scents for a long time now, I can say the “masculine” Lagerfelds seem to have really lagged behind many others, though as I also said in a recent post, prices on vintage seem to have risen quite a bit, generally-speaking, over the last couple of years. The original “masculine” Lagerfeld (now called “Classic”) and Photo seem to have been reformulated for the “drug store” market, whereas KL Homme apparently was not, which certainly suggests that it was never very popular (and may at least partially explain the prices for it these days). In his post, Mr. Ross claims that the owner of that local shop in question told him that if he could sell KL Homme for twice the price, he certainly would. Apparently, Mr. Ross did not follow up with the obvious question, “do you try to sell these kinds of fragrances on ebay?”

A local used book store I used to enjoy visiting closed a few years back, but not before I was able to ask the owner why. He said that it made a lot more sense for him to sell the building, which he owned (it was in a town where real estate prices had risen quite a bit), and sell his books online instead. Clearly, not everyone has this opportunity (most rent the stores), and this owner may not be able to get enough “old stock” to “make a living” selling it online. However, this person does not even seem aware of the possibilities that exist! Specifically, and again as I’ve posted not long ago, all one has to do is to use ebay’s “completed auction” feature. Doing this for KL Homme is quite revealing !

I conducted just such a search as of about 4:30 PM EST on December 30, 2013, and the results show that 28 bottles sold recently (and only a few minis were listed), but the prices vary significantly (I only searched for sold items). For example, a 125 ml spray bottle that appears to be around 97-98% of original amount sold for just a bit more than $31 total (a new 1 ounce bottle sold for a little more than this one)! However, a sealed, splash 125 ml bottle sold for $118.99 total. A two ounce new spray bottle sold for $39.95 total. If Mr. Ross paid sales tax on his purchase the difference would be a dollar or two. In short, why can’t Mr. Ross use the completed auction feature and why doesn’t he have patience with ebay listings? That’s how I am able to get excellent deals on these vintage greats !

Mr. Ross’ notion of a “contrived market” seems to be a kind of inadvertent attack on “capitalism.” If he wants to do that, he’s entitled to his opinion of course, but is he entitled to his own facts? In this system, or in economies that are at least largely capitalistic, sellers can set the prices they wish (other than in a small number of regulated markets), and in particular, when one encounters such a small, idiosyncratic market as appears to exist for vintage designer scents, one is likely to encounter all kinds of things that may appear strange to those who don’t follow it closely. For example, some sellers seem to have an idea in their minds about what their bottles should sell for, and they won’t take a penny less. Others seem to be trying to sell at “can’t resist” prices in order to clear out their inventory. Others, like myself (though as I said, not on ebay) are in no hurry to sell and will simply wait in order not to take a loss – we are not doing this to “make a living.”

I remember back around 1990 when a similar kind of market came into existence for signed and numbered works on paper by well-known contemporary fine artists. Some people thought the price rise was ridiculous, but it was still possible to obtain “lesser” works (probably equivalent to KL Homme in this analogy) for low prices (relative to what was occurring for “better” works) at the many small auction houses that existed at the time (I have no idea how many of them survived the internet age). We don’t know what is going to happen to the market for these kinds of scents, but we do know it’s unlikely we’ll be able to buy new ones that are like them any time soon (due to IFRA guidelines). With people like Chandler Burr telling everyone that these concoctions are “works of art” in some significant way, isn’t “the handwriting on the wall,” though? And is $80, for example, so much more for a “luxury item” than $30 or $40? To many buyers of these scents, who are older and doing well financially, the answer is highly likely to be a resounding no.

I never seriously became involved in the art market because I saw that all kinds of manipulations were involved, such as one private art dealer telling a potential client not to buy a work being sold by another art dealer for one or another reason that truly seemed “contrived.” However, trying to sell an item for a price you want is not contrived. There are people who don’t have fragrance shops nearby or who simply don’t care about paying an extra twenty dollars or so – they may not even own a car and find that shopping online saves them a lot of money, relative to buying a car, paying for gas, insurance, maintenance, etc. There is nothing “contrived” about these situations, and in this instance, Mr. Ross chose quite a poor example for his notion with KL Homme. I wonder what he will be claiming if prices for vintage do “go through the roof” soon and we begin to see them in the catalogs of major auction houses !

Lastly, and this is directed to Mr. Ross in particular: I don’t know where or how you were educated, but I guess I need point out something very important about “credibility” as a researcher. The researcher does not get to “cherry pick” examples he or she thinks fits his or her notions, while ignoring other evidence. Instead, you must examine the available evidence and put forth an explanation that fits all the “real” evidence, not just the evidence you want to discuss. In this case, unless you are contending that the sales of some or all of the 28 bottles of KL Homme I found on that ebay search are fraudulent (and if so, you had better have strong evidence), the only thing you are doing is destroying your credibility in these matters. I have no ill will towards you but I truly do not understand why you don’t want to investigate such things in a reasonable way. Not only isn’t it fair to your readers, but you are not being fair to yourself either! Do you only want to impress those who are easy to mislead ?

UPDATE: I originally wrote up a few paragraphs to respond to Mr. Ross’ response to this post, though he is apparently adhering to what I regard as an infantile promise not to name my blog (or the Basenotes.net site) on his blog any longer. However, because it contained some new ideas, I decided to create a new post for it, which is entitled, “The New Internet Market and the Old Avon One,” for those who are interested.

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8 Comments

Filed under Criticizing the critics.

8 responses to “Is Mr. Ross “clueless” about basic economic realities ?

  1. Abi

    i see a few problems with your argument…first you are saying he “admits” the vintge market doesn’t fit into the neat market categories, like this is a flaw in the argument. but actually that is his point, that the vintage sellers operate outside recognized modes of commerce…kind of like the “contrived” market he says it is…thn you are talking about ebay sales but he talks about the pricing…only briefly mentions he doesnt think the sales are legit…really its the pricing structure that is nto legit because there is no way for sellers to accurately price against retail products as in a store…and pawn shop owners rarely buy at “wholesale” – they buy way under wholesale, like 40 – 50% below wholesale prices, because they are not strictly operating a retail business. also wholesale implies “bulk” which is certainly isn’t a pawn shop’s biz model…and btw capitalism is not a market. capitalism is a basic economic system.

    also you say most ebay sellers arent savvy about vintages…doesn’t that support what brian is saying in his post?

    • Thanks for your thoughtful comment. I wrote up a new post where I examine these issues further, and I think your ideas are addressed in it. The title is “The New Internet Age and the Old Avon One.” I will address your claim about non-savvy ebay sellers. This is often the case in “emerging” markets, or even existing one where new technology becomes a “game changer” (such as the “day trading” phenomenon of a bit more than a decade ago). There seems to be a “sorting out” process, but because of the way ebay in particular is structured, some sellers are likely to continue to list their items as buy it now and at much lower prices than they should/could have. If ebay wasn’t more or less a monopoly, this may not be the case! An old economics professor I studied under liked to say that if economics professors really understood what was occurring they would not be teaching college courses! He also liked to say, “in the long run we’re all dead” (John Maynard Keynes), I think because he viewed economic activity as a flowing process, and after the economic crises of 2007-8, why would anyone who had done some research think a small vintage/discontinued fragrance market should “solidify” into something that doesn’t appear “contrived” to a naive observer?

      • Abi

        but i’m still confused…you have been arguing for weeks that internet isnt influential, as with blogs, incapable of effecting the fragrance market. but now you are saying it is a “game changer” and the internet can create independent markets for fragrance sellers?… also you do not address any of my points above in your comment or new post, except the point about ebay sellers not being savvy…i understand you are saying ebay provides an emerging market for vintage enthusiasts, but what about the price-gouging brian addrsses? lets say he is wrong and people are buying these vintges for large prices on ebay, so there is at least a tentative market for vintage, with the “chance” you can sell …. but his entire article talksa bout comparing vintage on ebay to vintage in actual stores…and how you can get a fairer price in stores (minus possible shipping costs)…which means there is no reason for people to buy certain fragrances online, if they are still available in retailers…i guess i am asking you, how do you address this? if people are buying kl homme on ebay for twice as much as he can find it in a mall store, aren’t the people who buy on ebay without trying stores first gullible? … i live near a small shop that sells original versions of some older scents and i admit i do not shop ebay much, but do notice the prices are higher on ebay than in store…

      • I think I have addressed the points but if you like, put forth a hypothesis, present your evidence, and we’ll take it one step at a time. In the case of KL Homme, you are incorrect, as I showed, so you are going to have to get your facts straight. A KL Homme of the same size bottle recently sold for almost the same amount, as I said in the post, so it seems like you are the one who is not “paying attention” here. And as I said, some people do not have a store nearby that sells the vintage/discontinued ones they are seeking, so for those people paying an extra $20 or so is not a “big deal.” I don’t think there is “price gouging,” because again, that is capitalism in its most general sense. You ask your price and you may or may not get it. On ebay they can start out items at a dollar, and this sometimes occurs with vintage/discontinued, and while they don’t always sell for the “huge money,” they usually sell for perhaps 80-90% of that amount. That difference may be the difference between those who have patience (like me) and those who buy what they want when they want it. I don’t see any reason to call such sellers “price gougers.” This is not a “necessity” item, and it’s very possible prices will rise even more. The fact that some owners of small perfume stores are not very internet-savvy seems to be a huge “red herring” to me.

        As to the influence of the “blogosphere,” my hypothesis is that these ebay prices for vintage or discontinued scents seem to be mainly due to a “fan base” being established long ago (and possibly given a further boost by books/columns by Turin and Burr), and again I presented evidence that supports my argument. If you have a different hypothesis, let’s see what evidence you have to support it !

  2. Abi

    ok i guess fair is fair …. my hypothesis:
    from pyrgos is using you to prove his point….bigsly i am surprised though you do not realize what he did with his argument…notice he does not make clear distinction between “auction sales” and “buy it now” sales in his post….but he does say “merchants aren’t really pricing legitimately”… hint that he talking about fixed pricing, as in “buy it now”…..he making you prove his point for him! you talk about AUCTION sales….auction sales are what people are WILLING to spend, vs. “buy it now” which is what ebay merchants WANT buyers spend…when you compare completed auction salep rices to current buy it now prices you see big difference…so yes you mention a 125 ml bottle of kl homme sold for $31 ($28.99 i see)… at auction! it had 2 bids…..but you see an enormous difference in prices under “buy it now”….brian say its not matching in-store prices, according to evidence he provided, a photograph of his receipt, … i must look on ebay for comparison…. so here is the evidence that prices are outrageous:

    current listings of KL Homme, “buy it now” on top, and auction under it
    125 ml by bestbargains4u-2day ..$96.95
    compared to
    125 ml by veranda-estate, 2 bids ..$33 (shipping added)

    60 ml by kenzie25 ..$85.99 (shipping included)
    compared to
    125 ml splash by ilovetanks04, 1 bid..$61.99 (shipping included)

    60 ml by setrasuperdeals … $84.99
    compared to
    125 ml by fdparce …$60.00 (shipping included)

    no need to go on here …. it is clear…my conclusion and please correct me because i understand i can be very mistaken….i think when you talk about how little these botltles sell for you show reader bottles are not valued by bidders nearly as highly as merchants putting fixed price think they are worth…just like brian talking about getting 60 ml for $36, this is not auction price, but set merchant price! so essentially i ask you bigsly can you show me “buy it now” bottles selling for $96, $86, $85, or can you show me “buy it now” on ebay selling KL for $36?
    i appreciate your time with me on this. i hope i have made my position clearer now, i have new appreciation of what happening between you two bloggers!

    • If there is something “contrived,” it is not with KL Homme on ebay. This is a discontinued scent that some sellers want a certain price for, and my guess is they see what I see, which is a rising market, so they think it will eventually sell. If you do a sold item search, that idea makes perfect sense. Mr. Ross doesn’t seem to factor patience into the equation. Ebay allows me to list a certain amount of items for free each month, so I have nothing to lose by asking what I want, though as I said I haven’t listed fragrances there in a long time. If you read the update to the post after this one, you will see an example of an asking price for a scent that I think could be called “contrived,” but it’s so ridiculous as to be irrelevant (you would have to be “brain dead” to buy that bottle!); again, an exception proving the rule, so to speak. This is one reason for the title of the post after this one, because in this “internet age,” there is very little some sellers “pay” to list on ebay (not sure about amazon), perhaps just 10 seconds to go to a site and hit a relist button, so as I said, the “rules of the game” have changed.

      Perfume store owners may want to clear out space and may not want to wait a while to sell a KL Homme bottle (and some may not realize what is possible on ebay), whereas some sellers (including me) are not going to “give it away” because of how we perceive the market (and the direction we think the market will go within the next couple of years). The key question here is, do the sale of these bottles on ebay (his examples and mine) constitute a phenomenon that deserves to be called contrived? Since there seems to be enough demand, why should those on the supply side not try to extract maximum value? That is what I mean by him not understanding the basics of capitalism. If there were 100+ bottles listed at high prices and only a rare sale at those levels, then I can understand the claim that these sellers are sort of “fishing” for fools, but I have not seen any evidence of this (other than the little-known “cheapo,” Tawanna, on Amazon, and as I said about it, I’ve seen this done with book listings there years ago!). Instead, the evidence suggests to me that Mr. Ross is fishing for evidence that simply does not exist, at least not the kind that one could use to build a strong case for his notion.

      • Abi

        you talking about the $500 listing on amazon? I read that! very ridiculous. but i see that sometimes on there….like a misprint almost…i admit bigsly that to me, i respect your position…..you say that there is a rising market for discontinued vintage fragrance and this market not contrived..but i do not see any convincing evidence from you. you are simply mentioning that there are some people buyin golder fragrances for not ridiculous prices (things under the hundreds brian mentions) but..really so what? like where is the evidence that there is real market for these very expensive fragrances? patou pour homme you mentioned earlier. so ok…this is interesting…30 bids on patou ph sold by kryomenos…but it is reverse of what you talk about. patou ph is REAL exception to the rule! this perfume very good, i smell it and like it…different and high quality ingredients but not my personal taste so i never own it….but very popular….why very popular?….snake eat its tail in this argument bigsly….because of internet hype on basenotes/fragrantica/blogs….another thing you write you believe not influential to people…why when that is only exxpanation for patou successes on Ebay? people who pay for it want it because they read it is excellent, collectible, discontinue…they can pay $710 to kryomenos!!!! without reviews and conversations….would anyone remember? maybe, but not enough to bid for $710!!

        you write about Avon….ever visit badger&Blade forum? wetshaver communities enjoy old vintage Avon scents, and frequently discuss them…several members post pictures of old plastic toy-like cologne bottles in different shapes, like gun, boat, car, whatever….they buy Avon, but these are not well-made perfume like patou…most perfume not as well made as original patou…you must pay high price for stuff even newer like from Creed for similar quality, still at $330 for 125 ml! …but patou is designer, not really trying for niche. so where else do we see perfume sell for $710?

      • It sounds like you are arguing that because perhaps several dozen people on another site like Avon scents, and the Avon prices are low on ebay (other than perhaps few exceptions), we should conclude that the prices for vintage designer scents are “contrived.” If so, it would be best if you could formulate your notion into a concise hypothesis such as this. My argument is that if you study the prices various vintage scents (and some recent ones that were discontinued, such as V for Men by Valentino), there are too many sales to dismiss the phenomenon as contrived. Moreover, the prices seem to reflect the popularity, such as on sites like Basenotes (generally-speaking of course), with some exceptions (like Stetson Country), which suggest a “fan base” had been established. If the supply is very small then the fan base can be quite small in order for an ebay market to develop (at what we are calling “high prices,” I think).

        Also, keep in mind what new designer scents sell for these days! If a person sees a 2 ounce KL Homme EdT bottle for $80, and he has fond memories of it, why would he think twice about buying it if his frame of reference is mostly department store pricing? My point is that this type of phenomenon is part of the online market, and should not be dismissed as “contrived.” In cases where prices are much higher, such as Patou Pour Homme and Vintage Tabarome, many people seem to think it’s some kind of “treasure” and seem even more willing to pay those prices! Again, this is part of capitalism, whether we want to admit it or not. Have you heard of the phrase “irrational exuberance?”

        http://en.wikipedia.org/wiki/Irrational_exuberance

        If prices rose to thousands of dollars per bottle for thousands of different vintage and discontinued scents, I might begin to worry about a “bubble” forming, but to me this looks like a very common rise in a collectibles market. In those cases, as I’ve said, there are many sales on the low end, for various reasons, but that is not relevant to the larger trend. There are still many who are not aware of the trend or don’t care, and I think there are still plenty of bargains to be had on ebay, but all those high prices are the major indicator here, IMO. The fact that many of these scents have little if any “internet hype” (or good reviews from Turin or Burr) to me is another very important piece of evidence. Without seeing these things, I too would have major doubts about what seems to be occurring.

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