What Is Product Scalping?

Product Scalping is the act of buying up goods or services that are in limited supply and high demand before most consumers can get a chance to buy them. Today, scalping is mostly an online activity that involves the use of bots that are programmed to scan e-commerce sites, travel portals and ticketing sites for availability of products or tickets, and then quickly buy out as much as they can in order to resell them at a high profit to those willing to pay inflated prices. There is a constant battle being fought between sellers and scalpers, and bots play a crucial role in enabling this practice.

The Impact of Product Scalping

Consumers who visit a website that offers products or tickets in stock for sale are certainly going to be disappointed and frustrated when they visit that site and find out that the expected goods are completely sold out. When this happens on several visits on which they expected to be able to buy goods, the average consumer stops trusting the site’s claims and starts searching for other, perhaps less-preferred sites to shop at.

While shortages of certain popular gifts and highly anticipated products such as gaming consoles have become commonplace during Cyber Week, the busiest online shopping days of the year in many countries, persistent “Out of Stock” notices during off-peak sales periods are certainly bothersome for consumers. Brand loyalty gets affected, and word of mouth eventually spreads and hurts the reputation of online sales portals that are frequented by scalpers.

Industries Most Impacted by Product Scalping

The entertainment and events industry, which sells a large portion (in some cases 100%) of event tickets online, has always been impacted by scalping even in the pre-Internet era. The transition to online ticket sales made it easier for scalpers to find buyers online willing to pay highly inflated prices. Scalpers have had a very profitable run in recent years due to incessantly growing demand for various types of electronic goods such as gaming consoles and advanced graphics chips of the kind used for gaming and mining of cryptocurrencies.

The fashion industry has also been plagued by scalpers snapping up the latest models of sneakers, certain brands of athletic wear, and apparel lines from popular designers which are often produced in low numbers to maintain brand exclusivity and consumer demand. Airlines and other travel industry operators are also among the most impacted by scalping. In the end, consumers are forced to pay a lot more than they expected, and sales portals lose customer loyalty and brand reputation.

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