eBay and Beer Sales

I don't think it's true that all or even most purchasers of beer on eBay are addicts nor do I agree that a ticker's desire for a beer represents a false or untrue ("overspend") value.

 

no I meant you get hooked on the bidding thing only.

 

nah I can dig where your coming from. I think you argued well.

 

I won't quote all your post for the reason that it is agreeable as it at least recognizes all the points I made, and your tepid belief that you may not have used two straw men was damned by the weakness/lack of argument to make the point.

You used the term strange idealism, and though you admit that I may not be one to hold it, your own words indicate that you yourself may be victim of it (see boldened area above). In a true free market the idea of prices is incapable, as you seem to me to believe, of having an ethical value. Right? There can be no praiseworthiness for price setting intentions. Right?

Cheers!

 

I've been struggling with a notion that has been prevalent through the course of this thread, namely:

Obviously, the brewery decides at what price to sell its product, but the implicit idea seems to be here is that the brewery doesn't charge more based on principle (moral/ethical), and not because of economics.

I am having trouble accepting this to be the exclusive reason.

Is it fair to say that every "known" brewery has its "bread and butter" beers, those that are available year round and are on tap through the respective breweries region?

I think that breweries don't charge more for their special release beers because: These beers account for only a small portion of revenue, and so to overcharge for them would only serve to potentially alienate those who regularly consume the "bread and butter" beer(s).

Essentially, my view is:
Breweries keep the prices down because, at least to an extent, of economics. For example, Starbucks makes a significant portion of its revenue from the $1.46 cups of drip coffee (which are also the highest margin product), much more than, say, the $3.99 "foo foo" drinks.

I may be wrong, and breweries may in fact make most of its money from special releases, and not its year-round "bread and butter" beer.
If it is in part due to economics, however, as I believe it is, then I think this prevailing notion of brewer morality (the "they don't raise prices because they like us!" argument) might be... well, then those who say it's only about the beer, and not about money, might be sounding a bit sanctimonious.

 

I am exhausted from reading just the last 5 pages of this thread, thank god I didn't start from the beginning. How about we all agree to disagree and then start this thread all over again in 9-12 months? I like that idea I don't think it has been done yet. It has reminded me how opinionated BA's are about the subject though, and how willing they are to argue their point to people that they know damn well are never going to see it their way. It does give us all a good reason to sit in front of computer screens and sip rare beer until the wheels in our roller chairs fall off. Cheers!!!

 

I don't particularly think my argument to be weak or lacking or tepid and I think I pretty clearly illustrated that I didn't use straw men, but if you think I'm dissembling then I'll set that aside.

However, I elucidated what I meant by "strange idealism" (I'm referring to hypocrites in this thread who draw arbitrary distinctions between their own entitlement and others, or rather failing to notice their own level of entitlement while criticizing others) and the bolded example is not an example of hypocrisy nor is it discussing entitlement.

I have routinely argued that brewers routinely strive for egalitarianism. I don't see how in its intentions that can be described as other than laudible. The insistence upon it, however, has some clear fall out when applied to a business in a free market economy.

A price itself is just a number. However, that doesn't mean that a price cannot be set which is unethical (gouging during gas shortages comes to mind). Which in turn does not mean that all price raises are unethical. The prices I'm suggesting brewers consider setting (and indeed are slowly setting) are not unethical; charging closer to the perceived value of a luxury item is not unethical. eBay prices are not unethical (if a price is too high a sale will simply not happen, there is not enough supply on eBay controlling any significant percentage of the given stock of a given beer, and that's ignoring the fact that this is a luxury item we're discussing that no one needs, making any discussion of setting an unethical price dicey to begin with). That does not mean brewers must charge more people should like them charging more or anyone shouldn't necessarily find people taking advantage of brewers' good intentions as being distasteful.

As I clearly stated and you bolded there IS praiseworthiness in attempting to price your beer so that all of your fans can afford it. However, by producing limited quantites of a thing and selling it for far less than its value (what people are actually willing to pay) EVEN WITH THE BEST OF INTENTIONS there are unintended consequences.

 

It's clearly true that special release beers make up a small portion of a brewery's revenue, and may in fact be a loss leader. And it may be overstating it to suggest that it's purely a matter of principle. In fact, it almost certainly is. However, in arguing that it is I'm attempting to give the benefit of the doubt to brewers who do not wish their beers to be sold on a secondary market and those who support them.

Because otherwise the brewers are essentially using the hysteria surrounding their beers as a pure marketing exercise, which to my mind is a lot more cynical. But just as bars blast for days on end to come to their bar for a highly desired beer that they only have 5 gallons of (that is far too little to service the many patrons who will surely show up to consume it), it's clear this too happens.

I would also agree that the matter of raising prices is dicey. There are mental hurdles in the costs of beers (usually around nice whole numbers like 10 or 20 or 30) that people are uncomfortable crossing. But over time we become accustom to 4 12 oz. beers instead of 6 for $10, or $10 then $15 then $20 and then all the way to $30 for the most special of releases.

So prices rise slowly and steadily over time.

 

quick note around this, something i've been saying for years (but not repeating as much because it almost "gives the game away" because the economics=ethics people start to think i'm speaking their language, then they inevitably tell me to go back to school).

one of the big reasons it's unethical to sell beer in secondary markets is that it drastically inflates the value of individual bottles, while not giving any value back to the brewery and, frankly, fucking up their business model and making pricing and distribution a lot harder to do (in part by artificially increasing demand; people rushing to the store to buy the bottle to ebay it, or bringing 20 mules to a release).

the fact is, founders is not releasing 15,000 bottles of CBS at $100 a bottle and coming anywhere near selling the whole batch. it's just not happening, no matter what fantasy people have about the growth of craft beer. it is unethical to fuck with the brewer's brand building / all-the-other-business-reasons-to-RELEASE-beer-like-CBS, not to mention its pricing (which i'm sure is difficult enough). more goes into pricing and business strategy than just "what 1 guy will pay for a bottle," and if you really want to get involved with that, maybe you need to get a job in the brewing business instead of being a ticket scalper.

all this bullshit about "well there's a market inefficiency so i'm exploiting it, (ethically of course)" tacitly (or sometimes even explicitly) assumes that the brewer is undercharging. but is the bruery undercharging when they sell out a large batch $30 barrel aged beer in 2~3 weeks? really? (now the economics=ethics people will say "they should just make less of it and charge $100 per bottle BECAUSE EBAY IS THE FREE MARKET, AND THE MARKET IS GOD, HU-HU-HURRRRR~")

what's really happening when some scumbag flips one of those $30 bottles and sells it to various people around the country is that they're bypassing all the overhead and fees and shit that the brewery has to account for, plus the fact that they need to sell a whole batch or they just blew all that time and money for nothing. it's patently unethical.

edit: p.s. only had the 1 cantillon 375 earlier tonight, in case anyone's wondering. edit2: hilariously wrote 'brewery' at one point where i meant the bruery, and 'bruery' later where i meant brewery. whoops.

 

eBay is merely a market, it doesn't drive up costs. People with a willingness to pay more than retail drive up the costs.

Brewers are not prevented from raising their prices. Therefore, any profit made in an aftermarket (which is a tiny fraction of the beers that brewery sold) does not impact their business, let alone their business model. Far more beer is traded and consumed than sold. You don't hear these complaints coming from wineries and distilleries. Why? Because they choose to price their products more in accordance with their actual value. Swarms of people bringing mules and being all scumbaggy and patently unethical might get in the way of other beer geeks getting the beer they feel entitled to, but it doesn't negatively impact their business. And if through some twisted logic they think massive crowds descending on them is a bad thing, they have it within their power to fix things.

Brewers choose to use these limited releases to hype their brewery. They release limited quantities at prices that the vast majority of their audience (which they know to far exceed the quantity of bottles they have for sale) can afford. They can change that.

No one in their right mind would suggest that the economically intelligent thing to do would be to reduce supply. If The Bruery can sell out Black Tuesday within hours of its release (after letting their Reserve Society Members buy bottles for a month) AND are upset about bottles being resold they should endeavor to make more of it and they should feel perfectly comfortable charging more for it. How much more? $35? $40? I don't know, but if you want to kill aftermarkets you need to more closely align supply and demand (by raising supply or suppressing demand by raising the price). This isn't rocket science.

You consider it to be morally reprehensible behavior for people to resell things that they purchased. OK. Lots of other people feel very differently about it. Regardless of who is right or wrong there will continue to be an aftermarket because where there is a clear disparity between cost and value terrible evil people and/or wonderful nice people will justify reselling that product to make a profit/ fail to justify their actions to themselves but do so anyway.

Unless you (generic you) truly think that the morals at play here are so dubious that the people engaged in reselling deserve to be criminally prosecuted then I would suggest that working towards a practical solution (that is, addressing the underlying cause of the aftermarket). If you do think these people are criminals who deserve to be imprisoned/fined then I'd suggest you work towards encouraging the enforcement of laws or enacting of new laws that will punish those involved in that trade.

I think it's worth noting the existing laws are in place not necessarily to curb the behavior that so bothers you but to ensure that each state gets the taxes they feel are due to them for alcohol consumed within their state.

And ticket scalping isn't a great analogy. I can still buy virtually all of virtually all breweries' beers without resorting to an aftermarket (including trading) for roughly MSRP (and assuming you live in a state that allows other states to ship you beer, perhaps with some S&H thrown on top). In other words, I can purchase a ticket to just about every single seat in the stadium for face value. Ticket scalping is such big business it can support multiple competing websites. Beer resale is so tiny it doesn't represent a significant fraction of the insignificant fraction of total craft beer sales that are the limited/rare beers worthy of being resold.

Cheers

 

thanks for the thought, but you didn't address virtually anything i said. e.g.

1) ebay value is not actual value. selling 15,000 $100 bottles of CBS is a stupid person's pipedream.

2) the point of releasing CBS at all is building brand loyalty/awareness and being creative. it does not make anywhere near the profit of a flagship pale ale, and it never will. scalpers undermine this (yes, even if they bring their non-beer drinking family to the brewery, cut the line, and buy all the bottles at asking price...). [also, reminder: scalpers are human beings that are morally responsible for their behavior, which, reminder: is not controlled by the market as an evil demon controls his possessed servant]

3) a major reason there is a secondary market is that ebay scumbags can bypass costly regulations. ignoring this is stupid.

4) reread post for more points.

---

edit: p.s. the practical solution is personal responsibility. apologists like yourself get in the way of it, while hilariously asking for a "practical solution."

 

1) I don't believe I ever said that eBay value is actual value and I certainly never intended to. There is a disparity between cost and value which allows for people to turn around and sell their beers for something approximating their value. What a limited quantity of a limited quantity of beer is valued at on the aftermarket is NOT the same number value as what all of the beer being sold at some hypothetical higher amount is.

2) I've made it quite clear that I'm perfectly aware of the completely obvious and evident truth that limited release beers are not about creating a direct profit for their creator/sellers and in fact have argued strenuously that by using them as loss-leaders or marketing tools to the extreme that they do are exacerbating the problem. Further, I have also made it repeatedly clear that at no time have I ever believed or argued that markets control people or that people are not responsible for their behavior. Last, you repeating scalpers undermine this will not make it so, but I'm honestly interested in you providing at least a single example of how scalpers undermine the loyalty/awareness/creativity of whatever brewery.

3) This is quite evidently false. Regulations are not costly compared to the cost of materials / labor / packaging / distribution / other assorted overhead. But even if they were immensely costly it still wouldn't change the fact that resellers have to purchase their product at retail and turn around and sell it. If brewers produced enough of their limited release beers and sold it at a high enough price to satisfy the vast majority of the people interested and able to purchase the beer at that price then who would resellers sell to?

4) How many points do I get if I reread it three times?

 

Unfortunately for you, a sizable portion (perhaps even a majority) of people don't share your values on reselling beer. Therefore if they practice personal responsibility the situation will remain much unchanged.

So when I suggest practicality I simply suggest recognizing the realities of the economics of the situation as well as the existence of a sizable proportion of people who do not share your ethical values on the subject.

You can choose to disregard either reality as you see fit.

 

Well, I guess you see how this is the root of the entire discussion. It would seem to me that gouging is a term one uses without any more justification than any of the ideas and terms routinely used by all in this discussion with whom you have seemed to take issue. If there is insufficient supply of something, what ever price someone willl pay is the market value. You made that point, and I agree with it. Perhaps you can point to the manual of ethical margins to make the point I am wrong, in which case I will most certainly retract my point. If not, then I guess you are in agreement with those who say that one man's gouging is another man's properly priced item (luxury is a value judgement impossible to define, so don't go there), and that if it is indeed gouging then the price of the item will not be paid.

Of course this is ridiculous, we do recognize prices as being out of hand or not, even if we can't define it, and those on your side of the fence would be wiser not to try to parse a sense of what is necessity, what isn't, what is gouging, what isn't, while at the same time preaching the self adjusting mechanics of capitalism and explaining all as just that with no morality involved. It either has no ethical value, or it has one that can't be defined. Doesn't seem to be an objective middle ground, but, again, that manual of ethical margins of which I am unaware could help. Personally I am fine with anyone who is trying to make a buck. I am selfish enough to want that person to fail if I feel it is hurting my own interests.

 

I'm not sure why so many people fail to understand this. At this point, any view about the morality of reselling craft beer will not make an impact on the secondary market, and it has absolutely nothing to do with justification one way or another. It has to be addressed on a practical level rather than an emotional/philosophical one.

 

Actually it is the perfect analogy. Well, perfect as possible considering the dynamics of each. Perhaps you don't see it that way as you may not be old enough to remember when StubHub was just a tiny little company with a tiny little idea and its buyers hadn't yet dominated the buying of tickets to the most popular events.

 

you're confused because you don't understand personal responsibility and ethics. that has to do with justification, and the people involved in the secondary market are beholden to it.

1) if you're not confusing ebay value with market value, why in the world do you think it's relevant to bring up brewery price increases? if you're just saying that breweries need to price ebay sellers out of the market... i mean, if that is what you're saying, sit with it awhile, combine it with the reason brewers release these beers, and consider it more thoroughly. (hint: the purpose behind releasing a beer is not "this beer's not being sold on ebay")

2a) if you're arguing that limited release beers need to switch over and become for-direct-profit, you're missing that they're not used as they are on a whim. they're used as they are because it's the only economically feasible way to do it... i know you didn't directly say that this needs to happen, but what else could you be implying? that brewers need to stop making limited release beers?

2b) if markets don't control behavior, why are secondary markets inevitable when breweries "undercharge"?

2c) asking me for an example strongly suggests that you don't understand the point... which, given your intelligence, suggests to me that you haven't actually thought about it. how do you think a release of 500 bottles hoping to build brand loyalty and such is affected by 100 locals and 400 speculators+mules attending a release? if a restaurant had a special "one night only, unique plate" promotion, and it was attended entirely by people who did not live in the area and had no intention of returning to the restaurant, how do you think this would affect the intended outcome of the restaurant's promotion?

do you think founders is releasing CBS so that beer geeks will complain that they couldn't get any, average beer drinkers won't get to buy it (if they even hear about it), and ebay speculators will profit? really? [edit: and again, saying "if they don't want that they should raise prices!" assumes inevitability regarding ebaying. this assumes lack of free will and/or responsibility on the part of sellers, ie the market made them do it.]

3) they'd sell to people further away, outside of any regulations on label approval, or need to secure transportation for large shipments, etc etc etc. the point is just that selling 10 bottles on ebay bypasses numerous hurdles presented to breweries and stores, and returns no value to the brewery (while normally lowering the value of the release to the brewery, by making the release day shittier to attend, causing clusterfuck situations at stores, etc).

4) 2 points.

 

There really can't be price gouging where there is no monopoly and/or essential goods, so I don't think gouging is terribly appropriate here.

And rare beer is unequivocally a luxury item, it is of necessity to literally no one.

I think it's actually quite wise to suggest that people recognize those truths, as well as the underlying economic realities, as well as the differences in ethical judgments on the matter. Fruitless, perhaps (pretty definitively, I suppose, given how long this thread has gone on and how many times I've restated variations of the same thing), but wise (ok, not wise either, given how long this thread has gone on, and how many times I've posted).

I knew there was a reason I stayed off BA... found it (my own inability to let a discussion go long after it's stopped being productive).

 

the essential problem is people not realizing how ebay (and trader hoarders) hurts individual breweries (most likely because they spent all their thinking time about it trying to figure out how to present Their Argument!), and then the further problem of people not really believing in personal responsibility, morality, or respect at the end of the day.

 

I'm not confused; we just don't agree about this subject, and we've proven that time and time again. I believe the craft beer community/industry has gotten too big to think that "personal responsibility" is realistic. You don't, and that's fine.

The truth is that your notion of "personal responsibility" is a. all relative and b. an idea of some, not even close to all, and possibly not even of the majority. No offense, but no amount of long-winded posts is going to change this being the truth of "personal responsibility".

And with that, I will read your replies, but I'm not going to engage you further because all we do on this subject is go in circles.