Using the data from Brian's link it gets even more interesting. Due to inflation and mulityear contracts the leagues actually saw a big chunk of their revenue go down while the players without the long term contracts they have nowadays were able to negotiate contracts that factored in inflation.

So during the time period I looked at in actuality TV revenue went down 8% from the end of the first contract and the end of the second contract and ticket prices fell 7%. Meanwhile player salaries rose 173%! There is simply no way you can chalk that up to increased ticket prices or having the TV deals offset the increased salaries since both actually declined.

SBB and Andy you just need to give up at this point. You haven't been right on this for many days, you're not right now, and you won't be right tomorrow.

PS: That link has a lovely graph that shows just how absurd your position is.

From 1975 to 2002 ticket prices increased by 439% but player salaries increased by 5200%!

Inflation adjusted salaries increased by 1506% and ticket prices rose by only 63%!

I swear that a big part of the problem here is that Andy simply doesn't understand the concept of demand.

No, but what I've seen is the argument that even without free agency and its resulting payroll explosion, owners would still be charging the same ticket prices as they do now, all because of this magical independent entity known as "demand".

See? He thinks it's a "magical entity." To him, it might as well be froofrah, or zyagya -- just a random collection of letters he doesn't realize actually mean something.

And yet from 1901 to 1974, the U.S. populated tripled, the GDP per capita quadrupled, the product on the field got better with each successive generation, and attendance per game quintupled.

Wouldn't all that have led to an explosion in "demand"?

I'm not sure why we've picked 1901 and 1974, but your question doesn't make sense. No, population increasing, or income increasing, does not "lead to an explosion in demand." Demand increasing leads to an explosion in demand. Of course, an increase in disposable income can shift the demand curve, but it's not automatic; if consumers aren't interested in a product, giving them more money doesn't make them interested in it.

I'm really tired of this.

Yeah, I think you said that about three days ago, but you're still here and loving it. That's the oldest line in the BTF books and your own words belie it. Silence talks and bullshit walks.

--------------------

From 1975 to 2002 ticket prices increased by 439% but player salaries increased by 5200%!

And don't forget that TV revenues also increased by 790%.

And yet you think that if player salaries had remained absolutely flat instead of rising by 5200%, the ticket prices would still have increased by 439%.**

McCoy, all I can say is that you'd make one hell of a hypnotist, because it'd take a regular Svengali to keep those fans coming at those prices once they saw how much the owners were raking in. They may be dumb, but they're not that dumb.

And AFAIC it's been fun, but you and your fans can talk to yourselves at this point. We'll meet again in some thread about nanny states or something, and in the meantime don't lose too much sleep over this. I've enjoyed the research and the links, including Haupert's, if not the rhetoric that's accompanied it.

**And if you're saying that the salaries would have gone up even without free agency and rendered this whole silly discussion moot, I'd totally agree with you, but then you'd find that some of your allies here would be all over you. Others like David have taken an absolutist position and said that even inflation-adjusted 1975 salaries would still have resulted in the prices of today. To each his own, but AFAIC that sentiment still calls for the butterfly net.

And AFAIC it's been fun, but you and your fans can talk to yourselves at this point.

As usual in a discussion with Andy, since he won't concede defeat (or maybe he doesn't understand that he's lost), we'll have to go to the scorecards.

#402 Of course ticket prices aren't everything. All of the other revenue streams really started to pick up in that time frame.

Makes more sense to use revenue I think. Not that using revenue rather thanb ticket prices undermines your point. It's just slightly less dramatic,

Also note that in specific small time intervals the numbers can move the other way. That is to say in recent years revenue has been growing faster than player salary -- which also serves to undermine Andy's general point.

One thing that Zimbalist points out is that in the pre-free agency era MLB made a return of 20% on net sales. That leaves an awful lot of room for salaries to grow. Paricularly as other costs are pretty much static.

Also, a few data points that are potentially useful.

Average team operating costs (not inflation adjusted) in millions of dollars. This is everything: Player development, promotions, costs to run the stadium, etc. As well as salaries.

1970 7.0
1977 10.3
1983 22.6
1989 42.7
1991 55.3

(Yeah it's a weird collection of years. It's what Zimbalist provides in the chapter on franchise finances. Data sources before 1980 are kind of spotty and you take what you can get)

Salaries accounted for just over 60% of operating costs in the late 70s. I'm confident it's higher than that now. Player development costs were just uner 30% back then and I'm confident that this is lower these days.

McCoy, all I can say is that you'd make one hell of a hypnotist, because it'd take a regular Svengali to keep those fans coming at those prices once they saw how much the owners were raking in. They may be dumb, but they're not that dumb.

And how would they know how much they were raking in?

Do people not spend $8 at the movies becuase the film they are about to see only cost $10 million? Or $50 million? How much money does a movie studio have to spend so that a movie goer isn't pissed about the profits they would be raking in? This whole issue of customers caring enough about profits to not use a product they are perfectly willing to pay for is utter nonsense.

I remember back in 1996 or so I wanted to go see a George Carlin show. I looked it up on ticketmaster and it was $75 a ticket! George Carlin is no Gallagher. It is simply a guy in a black shirt with a microphone in his hand on a stage. I did not buy the ticket. Not because of all the profit George Carlin or the producers would make but because I simply didn't want to pay $75 a ticket to hear Carlin tell jokes.

And yet you think that if player salaries had remained absolutely flat instead of rising by 5200%, the ticket prices would still have increased by 439%.**


So what are you arguing here? Are you arguing that for every hundred dollars you increase payroll that will lead to a penny increase in ticket prices? Tell you what, I'll agree to that.

Makes more sense to use revenue I think. Not that using revenue rather thanb ticket prices undermines your point. It's just slightly less dramatic,

Total revenue increased by 1800% as compared to 5200% for salary.

George Carlin is no Gallagher.

That's for sure.

Just so we are clear, I didn't mean it literally when I said every 100 dollars adds a penny. I'm aware of how much that would actually increase ticket price. I simply meant that the connection was very very very weak.

Anyway. . .

Here is a real life question that will show that Andy doesn't actually do what he preaches.

Andy, in your book selling days when you came across some rare book at a garage sale or estate or whatever and it was priced for a dollar or whatever other low amount did you turn around and sell it for $3 or did you turn around and sell it for $500 or $1000 or whatever the market would bear? If so why did you do that? Afterall according to your logic the book priced at $500 bucks but only costs one dollar is priced too high and would not sell.

This discussion is impossible to resolve in so many ways. Suppose Miller never happened, free agency never happened. The Griffith family would still own the Twins, Selig would probably still be the owner of the Brewers, there would be more long-term owners left other than the Steinbrenners. Even if Miller is a buffoon, in our world baseball would have gotten free agency eventually anyway like the NFL did. It was time. So you have to create a substantially different world for that to happen.

I do think there's some truth that the teams needed to pay an increased payroll to compete, so the old business model didn't work and they needed to get more $ per fanny in the seats to make it a go. It's been theorized that the increased attendance has allowed the teams to demand more in revenue. What about the Green Bay Packers? They've been selling out since the 1960s. They're non-profit, so there's no owner to skim off the top. Yet they've done a lot of things the other sports teams have, like luxury boxes, seat licenses, public financing, etc., along with actually increasing the seats sold over time. Do you think if there was no NFL free agency and no competing league to drive up salaries, that everything would be the same? Doesn't seem likely.

One thing free agency does is it drive inefficient management practices out of the game. In baseball, when the player's percentage of the take kept going down and down, teams didn't need to be managed as well and could still survive. Businesses don't need to make maximum profit, they just need to survive. Particularly when Griffith in the Twin Cities, Charlie Finley in Oakland, and Selig in Milwaukee were running essential monopolies with no competition on the horizon.

McCoy, all I can say is that you'd make one hell of a hypnotist, because it'd take a regular Svengali to keep those fans coming at those prices once they saw how much the owners were raking in. They may be dumb, but they're not that dumb.

I reiterate that it has nothing to do with being "dumb." It has to do with who the #### cares how much the owners are raking in.

I reiterate that it has nothing to do with being "dumb." It has to do with who the #### cares how much the owners are raking in.

I declare Apple is making far too much fucking money. Let's get this boycott rolling fellas!

I agree that basic supply and demand explains a huge majority of ticket price increases. But can't demand be shifted, however subtly, by the public relations advantage of being able to blame/accredit ticket price increases to "We just signed Barry Bonds for millions and millions of dollars" as opposed to basically having nothing to say, with the implicit presumption "We know you'll pay it, suckers"? It's not anywhere near as much of a factor as watching baseball simply becoming a more popular activity for a hundred different reasons over the last forever, but it could be making a significant difference on the margins, no?

In other words, the Giants aren't increasing prices because they signed Bonds, but in addition to the chance for a price increase in the demand spike for fielding a better team, the hike they instate has less effect on existing demand because they can claim the causal relationship is backwards; i.e., they had to raise prices because they signed Bonds vs. the reality of they signed Bonds so they could increase ticket prices.

Here is a real life question that will show that Andy doesn't actually do what he preaches.

Andy, in your book selling days when you came across some rare book at a garage sale or estate or whatever and it was priced for a dollar or whatever other low amount did you turn around and sell it for $3 or did you turn around and sell it for $500 or $1000 or whatever the market would bear? If so why did you do that? Afterall according to your logic the book priced at $500 bucks but only costs one dollar is priced too high and would not sell.

First, I don't know how you'd make any direct comparison between garage sale prices and baseball contracts, since unlike baseball salaries, what a dealer had to pay for a book at a garage or estate sale isn't published in the newspaper for the world to see and (sometimes) judge.

That said, the generic answer to your question would be predicated on (a) the general disposition and philosophy of the owner, (b) his long range financial goals, (c) his short range financial necessity / cash flow, (d) his overall financial standing and financial independence**, (e) his interest in the book's subject matter, (f) the local market for the book, (g) his personal knowledge of the book's market value***, and (h) his personal opinion of the book's inherent worth, or the book's subject matter.

Continuing from that....

---A "scarce" book in perfect condition by a well known author for which you had a well established existing customer base would be priced (by me) somewhere near the top of the "known" retail value, depending on how scarce it really was and the depth of my customer base for that particular item. If it had been a military history book, I would have priced it at perhaps 80% of the "market" value and sold it immediately. If it had been a literary first edition, the overwhelming factor in my price point would have been the condition of the dust jacket and my knowledge of the "real" demand for the book in that specific condition. (In literary first editions, the dust jacket's existence and condition determines about 90% to 99% of a book's actual "market" value. This statement still comes as a surprise to nearly everyone outside the book business.) And if it had been a psychology book or a Stephen King novel, I would have priced it at about 40 or 50% of the "market" value and called a specialist if I wanted to get a quick turnover, or put it on the shelf and waited for someone to spot it and think "how stupid can this guy be?", a thought which of course would earn me many a return visit by my unsuspecting bargain hunter and more sales down the road.

---OTOH those same 3 books, in the hands of another 10 dealers, might be priced in 10 different ways, according to those 8 factors I mentioned. Some dealers care far more about reputation for "fairness" than others, for many reasons. Some dealers want to maximize the profit on every book. Some dealers look at how each book's price fits into his long range marketing strategy. (That was me from day one.) Some dealers today look up every book on the internet before pricing it. Some dealers look up only a tiny percentage before doing so. Some dealers use the internet price(s) only as a starting point. Some dealers use what they find as gospel. And so on.

But to return to your specific question, there are two groups of customers: Those who understand the one in a million nature of the sort of serendipitous "find" you're describing, understand that this "find" probably represented at least 50 hours of work and wasted time****; and those who are clueless about such matters and think that these "finds" happen every day. The first group realizes the underlying economics of that "windfall" and understands that the true "price" you paid was a lot more than "one dollar", while the second group is more likely to be found looking for "bargains" in a dumpster, and was never part of your customer base in the first place.

The real question isn't about garage sales, of course---it's about what you'd pay for that same book when a person offered it to you and said he'd take whatever you offered him, no questions asked. That's when all those factors I mentioned above come into play. And assuming I knew the book's rough value was really $500, I'd likely have paid between $100 and $300 for it, assuming it was in clean condition and not missing any of its original parts (dust jacket; inserts; etc.), and depending on the other factors I mentioned. "Buy high and sell low" was my underlying pricing philosophy, and it got me the best possible books and the fastest possible turnover. The dumpsters are full of dealers who think that "buy low and sell high" is all there was to it, and they never figure out why their stores full of common books that they bought at garage sales for a buck apiece never got them out of the mud.

Of course again, the garage sale question would relate to the topic at hand only if what you paid for that book were posted for the world to see.

**Very few used book dealers achieve a middle class lifestyle from bookselling alone. In that regard I was one of the lucky ones. Most used book dealers either scrounge to break even and never make it to their second lease, or are financially independent to begin with. The latter group, needless to say, also has the greatest number of pricing options.

***Which up until very recently (meaning the last 10 years or so) was nowhere near as easy to know as it is today, 4 1/2 years after I shut down. And even with abebooks and Amazon on the scene, there are still books that never show up online no matter how long you look. I own many hundreds of books like that myself. Part of what still separates a successful dealer from what we'd call an "amateur" dealer is the ability to price a book instinctively (and sell it) without the crutch of the internet.

****Which is why few dealers waste their time at garage sales, where 99.99% of what you see is book club novels, or titles like How to Get Rich, How to Get Laid, and How to Find Jesus.

EDIT: Typed too fast for proofreading, so preemptive apologies.

In literary first editions, the dust jacket's existence and condition determines about 90% to 99% of a book's actual "market" value. This statement still comes as a surprise to nearly everyone outside the book business.

When I get a new book, I put the dust jacket carefully on a shelf while I read it, and then replace it after reading. People think this is odd because the jacket is supposed to protect the book from, I dunno, dust maybe, while you read it; but I explain that the risk of damaging the dust jacket and therefore the eventual value of the book is too great to take any chances.

Of course then I end up giving the book away after I read it and never accumulating a collection of any value, but at least my instincts are pure. It's like picking up a penny that will never be worth anything and being careful only to touch the rim with the tips of your fingers.

When I get a new book, I put the dust jacket carefully on a shelf while I read it, and then replace it after reading. People think this is odd because the jacket is supposed to protect the book from, I dunno, dust maybe, while you read it; but I explain that the risk of damaging the dust jacket and therefore the eventual value of the book is too great to take any chances.

What you're doing is triple smart. One of the best book collections I ever bought in my life was from the estate of a man who had died many years earlier. He'd done exactly what you've done, only he'd taken it even further, and gently placed the dust jackets behind the books on the shelves, allowing them to retain their "new" condition, preserved by his son who'd inherited them, until I got there nearly half a century later. What I found was an incredible collection of vintage history books and biographies from about 1910 to 1940, all of which looked like they'd just been printed the day before. It was the book equivalent of that Mr. Mint "find" of those unopened cases of 1952 Topps baseball cards, although the dollar value obviously wasn't remotely comparable.

But the easier way to protect the value of your books today is simply to buy 30 cent mylar protective sleeves for their dust jackets, AKA Brodarts. I've got about 8,000 books in my own collection, 98% of which are in dust jackets, and that chump change investment to cover the most valuable jackets in Brodarts is one of the best financial moves I've ever made.

Of course then I end up giving the book away after I read it and never accumulating a collection of any value, but at least my instincts are pure. It's like picking up a penny that will never be worth anything and being careful only to touch the rim with the tips of your fingers.

Yeah, it's pretty much immaterial whether you sell your books or not. And with the Brodart in place, you don't really have to be that fussy about handling them, or even have to remove the jacket for protection, since the mylar renders it both creaseproof and waterproof.

---A "scarce" book in perfect condition by a well known author for which you had a well established existing customer base would be priced (by me) somewhere near the top of the "known" retail value, depending on how scarce it really was and the depth of my customer base for that particular item. If it had been a military history book, I would have priced it at perhaps 80% of the "market" value and sold it immediately. If it had been a literary first edition, the overwhelming factor in my price point would have been the condition of the dust jacket and my knowledge of the "real" demand for the book in that specific condition. (In literary first editions, the dust jacket's existence and condition determines about 90% to 99% of a book's actual "market" value. This statement still comes as a surprise to nearly everyone outside the book business.) And if it had been a psychology book or a Stephen King novel, I would have priced it at about 40 or 50% of the "market" value and called a specialist if I wanted to get a quick turnover, or put it on the shelf and waited for someone to spot it and think "how stupid can this guy be?", a thought which of course would earn me many a return visit by my unsuspecting bargain hunter and more sales down the road.

So, what you're basically saying is, you'd price it based on demand.

So, what you're basically saying is, you'd price it based on demand.

No, what I'm saying is that my pricing was partly based on demand, and partly on my long-range marketing strategy. I could easily have gotten higher prices on well over half the books I sold**, but it would have gone against my overall concept of bookselling and likely reduced my overall profit in the long run. A great part of a used book shop's survival chances rests upon its reputation, and a reputation for low prices and first rate selection (while still paying more than your competitors for the books you want) is worth a lot more in the long run than being a slave to a mathematically calculated "market" demand when it comes to pricing your books, and it's infinitely better than pursuing a simplistic "buy low, sell high" policy.

**One small example: I regularly priced trade paperbacks at $2.00 to $6.00, even with list prices of $20.00 or more, while the standard in the business is to price them at half the list price, even though list price for the same book may quadruple over the years without affecting its quality one iota. I'd sometimes make exceptions to my general rule and go with the half list price model, but whenever that happened the book itself had to be truly exceptional by even the highest of standards. It happened about once in every hundred books.

First, I don't know how you'd make any direct comparison between garage sale prices and baseball contracts, since unlike baseball salaries, what a dealer had to pay for a book at a garage or estate sale isn't published in the newspaper for the world to see and (sometimes) judge.

And if the potential buyer asks how much you spent for it?


How about Mark McGwire's home run ball or Barry's? They went up for auction and people paid staggering amounts for them and yet all those balls didn't cost the owner a dime. I can't believe a customer would be willing to give the owner of those balls that much profit!

Or how about your house? If you decide to put your house up for sale and you bought it for 50k back in the 70's are you only going to sell it for 70k? Would anyone buy your house for 500k now or would people say you are making too much profit off of this?

In the real world we have dozens if not hundreds of examples of high profit margin items being in demand all the time. Hell, most of the luxury items are high profit margin items and they seem to sell all the time. People simply do not care about how much profit a company is making from an item when they decide to buy the item or not.

So, what you're basically saying is, you'd price it based on demand.

He's also saying he doesn't price it based on cost as well.

No, what I'm saying is that my pricing was partly based on demand, and partly on my long-range marketing strategy.

That is actually basing your pricing entirely on demand. For starters you are setting the price of your books based on the "market value" of a book. 10% off of market value is still basing your pricing on demand. Secondly discounting your books from market value is a way to increase the demand of your services and books. What you are doing is basic economics.

First, I don't know how you'd make any direct comparison between garage sale prices and baseball contracts, since unlike baseball salaries, what a dealer had to pay for a book at a garage or estate sale isn't published in the newspaper for the world to see and (sometimes) judge.

And if the potential buyer asks how much you spent for it?

I usually would tell them, unless I'd sized them up as tire kickers before the conversation started, in which case I'd tell them anything that would be most likely to walk out and never return.

How about Mark McGwire's home run ball or Barry's? They went up for auction and people paid staggering amounts for them and yet all those balls didn't cost the owner a dime. I can't believe a customer would be willing to give the owner of those balls that much profit!

I'm not sure how this relates to anything other than an auction market for one-of-a-kind items, where demand can be instantly calculated with great precision, and re-calculated each succeeding time the item is offered.

Or how about your house? If you decide to put your house up for sale and you bought it for 50k back in the 70's are you only going to sell it for 70k? Would anyone buy your house for 500k now or would people say you are making too much profit off of this?

In the real world we have dozens if not hundreds of examples of high profit margin items being in demand all the time. Hell, most of the luxury items are high profit margin items and they seem to sell all the time. People simply do not care about how much profit a company is making from an item when they decide to buy the item or not.

Obviously you're assuming that the pricing decision culture surrounding these items is identical in all respects to the pricing decision culture of a ball club. All you're doing now is repeating that unproven assumption in another form.

Just so we are clear, I didn't mean it literally when I said every 100 dollars adds a penny. I'm aware of how much that would actually increase ticket price. I simply meant that the connection was very very very weak.

Then really all we're arguing about is where to place the pencil point, since I've never once said that payroll was anything more than one small factor out of many in determining ticket price. You're really arguing with a fictional me far more than I'm arguing with the real you, and the overwhelming matter of importance is that the silly hypothetical we've been arguing about (could 2011 prices co-exist with 1975 CPI-adjusted payrolls) could never have gotten to this point in the first place, since the players would never have allowed it.

So, what you're basically saying is, you'd price it based on demand.

He's also saying he doesn't price it based on cost as well.

Of course my cost was a pricing factor in most cases, if not usually in the case of the rare windfall.

No, what I'm saying is that my pricing was partly based on demand, and partly on my long-range marketing strategy.

That is actually basing your pricing entirely on demand. For starters you are setting the price of your books based on the "market value" of a book. 10% off of market value is still basing your pricing on demand. Secondly discounting your books from market value is a way to increase the demand of your services and books. What you are doing is basic economics.

I'm flattered, but if the cost of my books dropped by 97%, I seriously doubt if that wouldn't have somewhat affected my pricing. Perhaps you're of the opposite opinion on that, but if that's your final thought on the matter I wouldn't recommend quitting your day job.

But you already said it wouldn't. You've bought expensive books for cheap before and you priced those books based on demand. Nor are you addressing what I said. Right now or I should say when you owned a business you were not practicing what you stated a business would have to do to surive.


Of course my cost was a pricing factor in most cases, though not in the case of the rare windfall.

Ta-daa! You just contradicted pretty much everything you had to say on this subject.

This gets more bizarre. Andy's comments here over a number of days have reflected a lack of understanding of supply and demand and basic economics. Yet, he spent many years pricing books for a living. And seems to have priced them based on... demand. Yet, when told that he did so, he disputes it.

He gives advice to MLB owners in this thread about how to price their product, but he didn't begin to follow said "advice" when the rubber hit the road for him in the real world. Instead, he priced his product just as he is being told a rational supplier would do.

Really odd.

No, what I'm saying is that my pricing was partly based on demand, and partly on my long-range marketing strategy.

That's demand too. Marketing is nothing but an effort to create demand. You priced based on both short-term and long-term demand.

edit: coke to mcCoy on 421

But you already said it wouldn't. You've bought expensive books for cheap before and you priced those books based on demand.

McCoy, I priced all books based partly on the specific demand for the specific book, partly on my long range marketing strategy, partly on the cost of the book, and always on a balancing of these three factors. The only time the cost wouldn't enter into the equation would be in the case of a windfall, which in my case happened perhaps about once a year, and almost never after the internet took over and the dealers who used to price for their local market began looking up everything before pricing their books, effectively killing the possibility of any further retail markup on my part. But as a general rule, what any dealer has "in the book" (meaning how much he had to pay for it) is going to be a factor in how he prices it.

Now if a lucky dealer can find a vein of free rare books in the Klondike wilderness, then I suppose he'd be exempt from cost considerations. That generally doesn't happen too often.

Nor are you addressing what I said. Right now or I should say when you owned a business you were not practicing what you stated a business would have to do to survive.

I have no idea what you're saying here. I practiced exactly what I preached about pricing based on a combination of factors, and I walked out of the business at age 62 with my head well above water.

----------------------

This gets more bizarre. Andy's comments here over a number of days have reflected a lack of understanding of supply and demand and basic economics. Yet, he spent many years pricing books for a living. And seems to have priced them based on... demand. Yet, when told that he did so, he disputes it.

You're just on autopilot now, Ray. That paragraph has zero relation to reality.

He gives advice to MLB owners in this thread about how to price their product,

Where have I given any "advice" to the owners? All I've said is that I think that their pricing decisions were based on more than one factor. I've got my MLB Extra Innings package and I couldn't care less if I ever go to another ballpark as long as I live, though I'm sure I will at some point.

but he didn't begin to follow said "advice" when the rubber hit the road for him in the real world. Instead, he priced his product just as he is being told a rational supplier would do.

but he didn't begin to follow said "advice" when the rubber hit the road for him in the real world. Instead, he priced his product just as he is being told a rational supplier would do.

Really odd.

What's odd is how that every time you make a comment, you seem to subtract from the sum total of human knowledge on almost any given subject. You obviously have no idea at all how or why I priced my books the way I did, and you clearly have no knowledge of the economics of the used book market in general other than what you inferred from your college textbook. You're still into that square pegs and round hole thing, and I guess you'll keep hammering away as long as you've got a hammer.

No, what I'm saying is that my pricing was partly based on demand, and partly on my long-range marketing strategy.

That's demand too. Marketing is nothing but an effort to create demand. You priced based on both short-term and long-term demand.

And as I've also said many times already, with the exception of a handful of windfall purchases my pricing was also based partly on cost. What part of that don't you three understand?

And as I've also said many times already, with the exception of a handful of windfall purchases my pricing was also based partly on cost. What part of that don't you three understand?

The part where the cost of the book bears any realtion to what you can sell it for.

You already exempted windfalls. If the market didn't bear a price above the cost of a book, did you refuse to sell it, ever? If you acquired 2 copies of the same exact book at different costs, did you price them differently?

In a competitive market, cost is simply not able to influence prices, except by driving out of business those who can't meet market demand at a profitable cost.

But as a general rule, what any dealer has "in the book" (meaning how much he had to pay for it) is going to be a factor in how he prices it.


No it is going to be a factor for whether or not you are going to buy the book. If a seller comes to you with a book that you believe the market price is $8 and he wants $9 for it you are not going to buy it and you definitely are not going to buy it and try to sell it for $18 simply because you paid $9 for it.

I have no idea what you're saying here

Your statement had nothing to do with what I said.

I walked out of the business at age 62 with my head well above water.


Because you didn't do what you are preaching in this thread for several days now.

I've got my MLB Extra Innings package and I couldn't care less if I ever go to another ballpark as long as I live, though I'm sure I will at some point.

You bought that package? Why? It is just a profit machine for baseball. MLB's costs to air those games are almost zero and yet they charge a ton for them. I can't believe people actually buy this package. Don't they know baseball is making a fortune off of them?

And as I've also said many times already, with the exception of a handful of windfall purchases my pricing was also based partly on cost. What part of that don't you three understand?

Your nonsensical position, that is what. You've stated in several posts now that you based your prices on market price. Cost comes into play when you decide to buy the book or not but you don't price a $10 book at $20 simply because you spent $9 to get it do you?

edit: I guess you can keep the coke Snapper.

He gives advice to MLB owners in this thread about how to price their product,

Where have I given any "advice" to the owners?

Post 364:

But if baseball wanted to create new levels of interest in attending games immediately, without regard for total revenue, that wouldn't be very hard. All it would have to do would be to expend one tenth as much imagination to filling the stadium as it does to maximizing revenue. I'd be glad to act as a consultant.

Not likely to happen: First because it would make little economic sense, unless the upswing in concessions could make up for the loss in ticket revenue; second because some parks are already filled to near capacity; and third because of the lure of the comfort of home viewing and the virtual giveaway prices assigned to Extra Innings and the mlb.com season package. You'd have to reduce ballpark prices by an enormous factor (50% or more IMO) to lure most of those armchair fans to the ballpark. The current pricing and overall marketing models of today weren't created overnight, and they couldn't be reversed all that easily.

but he didn't begin to follow said "advice" when the rubber hit the road for him in the real world. Instead, he priced his product just as he is being told a rational supplier would do.

Really odd.

What's odd is how that every time you make a comment, you seem to subtract from the sum total of human knowledge on almost any given subject. You obviously have no idea at all how or why I priced my books the way I did,

You just told me, above.

and you clearly have no knowledge of the economics of the used book market in general other than what you inferred from your college textbook.

From what you wrote above it's clear that you priced a book based on what you thought the market would bear, taking into account supply and demand, but not the cost of the book.

McCoy, I understand what you're doing here, and obviously what you're saying is correct. But it was a really poor tactical move to shift the debate to book-selling, where Andy can use himself as his own appeal to authority and where he has an inexhaustible supply of anecdotal claims at his disposal.

That he's as nonsensical as ever isn't really the issue - from his POV, you just threw him a lifeline when he was dead in the water.

McCoy, I understand what you're doing here, and obviously what you're saying is correct. But it was a really poor tactical move to shift the debate to book-selling, where Andy can use himself as his own appeal to authority and where he has an inexhaustible supply of anecdotal claims at his disposal.

That he's as nonsensical as ever isn't really the issue - from his POV, you just threw him a lifeline when he was dead in the water.

Except I think Andy's view on his book business has pretty much shown anybody with an open mind that Andy is wrong on his opinion about baseball tickets. I'm not really interested in changing Andy's mind. Obviously that isn't going to happen. Argue with anybody over a handful of days and hundreds of posts and they are not going to suddenly say "oops, my bad" at the end of it. I'm interested in finding and uncovering new data which has been accomplished in this thread. If at the end of it Andy still thinks he is right, oh well. The rest of the world, besides SBB, knows he is wrong.

And as I've also said many times already, with the exception of a handful of windfall purchases my pricing was also based partly on cost. What part of that don't you three understand?

The part where the cost of the book bears any relation to what you can sell it for.

Then obviously you're confusing your wish with my actions, since it most certainly did in most cases.

You already exempted windfalls. If the market didn't bear a price above the cost of a book, did you refuse to sell it, ever?

The determination of the cost of my book was set by me, based on my knowledge of my many different "markets". But once I made that determination, that cost formed the parameters of my price point. And even in the case of a windfall, my nominal wholesale price would sometimes enable me to price the book well under my usual "market" price, even if I didn't always choose to do that.

If you acquired 2 copies of the same exact book at different costs, did you price them differently?

All the time, and I frequently placed the two copies side by side. It was a commonplace marketing strategy that always worked, since it enabled the bargain-hunting customer to think I'd made a "mistake" and that he was putting one over on me. Of course my regular customers recognized this and just smiled.

In a competitive market, cost is simply not able to influence prices, except by driving out of business those who can't meet market demand at a profitable cost.

So I guess that you're saying that if used book dealers' wholesale prices were to revert to what they were in 1975, the retail price of these same books today wouldn't budge an inch downward. That's your apparent logic, and it makes even less sense in the context of used books than it does in the context of ticket prices, which is saying quite a bit.

Let's be specific: You're saying that if a first edition of Gone With The Wind, which sold for about $500 (in a first state DJ) in 1975, were still available to dealers at that year's wholesale price of a few hundred dollars, it would still be selling at its current low to mid five figure amount today. I'd love to see you, or anyone else here (since you all seem to agree with it), explain that reasoning, and how you arrive at that conclusion.

But as a general rule, what any dealer has "in the book" (meaning how much he had to pay for it) is going to be a factor in how he prices it.

Of course it is, just as a baseball owner's payroll -- which he knows when he has his one-time-and-one-time-only opportunity to set his bid price on tickets -- will impact his bid price on tickets. No one's going to intentionally set a price on his entire inventory that is going to lead him to lose money. In baseball, they may for a year, maybe two, but no more. If that. Only a buffoon would look at his spreadsheet, see what he's spending on payroll and everything else, look at his market research data, project he's going to sell 30,000 tickets per game, and set the ticket price for the tickets he thinks he'll sell at a price that he thinks will lose him money.(**)

Once the offer price is set by the owner in baseball, the owner then takes additional steps to summon up the willingess of his customers to hit his bid.(***) In addition to catchy marketing slogans ("These Bucs Play Hardball!!," "The New York Yankees: Pride, Pinstripes," etc.) one of those steps, in the real as opposed to fantasy world, is to provide some reasoning as to why his offer prices are "fair." When his bid prices are materially higher than last year's bid prices, the owner almost always proffers a detailed list of justifications, which often include increased payroll. There's no evidence that that justification fails to resonate with fans, and there's every reason to believe that, for some fans, it does resonate.

(**) Heinously-managed operations like the Mets or Dodgers may have no choice, but after a year or two of missing the numbers, they'll be in bankruptcy or wards of Bud or -- at best -- shedding assets at fire-sale prices.

(***) He doesn't, as some seem to think, stand mute and hope that the Demand-O-Tron spits out a result to his liking.

Except I think Andy's view on his book business has pretty much shown anybody with an open mind that Andy is wrong on his opinion about baseball tickets. I'm not really interested in changing Andy's mind. Obviously that isn't going to happen. Argue with anybody over a handful of days and hundreds of posts and they are not going to suddenly say "oops, my bad" at the end of it. I'm interested in finding and uncovering new data which has been accomplished in this thread. If at the end of it Andy still thinks he is right, oh well. The rest of the world, besides SBB, knows he is wrong.

And in return, most of the rest of the outside world would send for the St. Elizabeth's wagon if they were to read what you've been saying about 2011 prices being sustainable alongside 1975 CPI-adjusted salaries. But it's really only that dogmatic insistence that there would be NO lower prices that I find insane; I'm certainly not talking about payrolls being any sole cause or primary cause of all those ticket price hikes, even though someone who read some of the responses to what I've written might think that this were the case. The collective inability here to recognize or acknowledge any gradations between "ALL" and "NONE" is what I find totally strange, but it's not the only topic where I've seen many of the same people exhibit this same rigidity of reasoning.

But that said, I've also appreciated the new links and info, including Prof. Haupert's, whose article I'd seen before but forgotten to bookmark. I wouldn't advise any of you to try the used book business, even with a time machine aimed at 1975, but OTOH I probably wouldn't last a week trying to figure out how to earn a living doing whatever it is that you guys do.

And Ray (#421), obviously that "advice" was purely conditional. It wasn't anything more than that, and it was based on a hypothetical assumption that I openly acknowledged wouldn't have been in their interest. If I were telling owners that they "should" be lowering their prices today, that would be "advice" in the normal sense of the word, but that's not what I was doing.

Let's be specific: You're saying that if a first edition of Gone With The Wind, which sold for about $500 (in a first state DJ) in 1975, were still available to dealers at that year's wholesale price of a few hundred dollars, it would still be selling at its current low to mid five figure amount today. I'd love to see you, or anyone else here (since you all seem to agree with it), explain that reasoning, and how you arrive at that conclusion.

If the end-consumer had no access to the wholesale market, and was still willing to pay five figures? No, it wouldn't change.

Take a slightly different hypothetical. You and I invest 50:50 in a house as a rental property, and discover that the previous owner (who used to work or the GWTW printer) left behind some mint first printing copies of GWTW, which we split 50:50.

Why would we ever sell them for less than the market price? Even though they were free to us.

Unless, the quantity we found was so large as to fundamentally shift the market, i.e. if we found 20,000 of them, that would presumably lower the value of a individual book remarkably. In which case, our best bet would still be to slowly sell them at market price, until the market figured out what we were doing.

Hi, guys! What'd I miss?

Why would we ever sell them for less than the market price? Even though they were free to us.

You'd probably put them up for auction. Baseball owners didn't have that luxury. They had to pick a bid price and live with it all season.(**)

(**) Completely on the upside, practically completely on the downside. They could always add on a free hot dog or somesuch to their unsold inventory to lower the effective, but not face price.

Let's be specific: You're saying that if a first edition of Gone With The Wind, which sold for about $500 (in a first state DJ) in 1975, were still available to dealers at that year's wholesale price of a few hundred dollars, it would still be selling at its current low to mid five figure amount today. I'd love to see you, or anyone else here (since you all seem to agree with it), explain that reasoning, and how you arrive at that conclusion.

If the end-consumer had no access to the wholesale market, and was still willing to pay five figures? No, it wouldn't change.

Take a slightly different hypothetical. You and I invest 50:50 in a house as a rental property, and discover that the previous owner (who used to work or the GWTW printer) left behind some mint first printing copies of GWTW, which we split 50:50.

Why would we ever sell them for less than the market price? Even though they were free to us.

Obviously we'd sell them at our optimal price, which would be a combination of top market price and the timeframe within which we'd want to get our money.

But that flukish situation has nothing to do with what I've been talking about, which is a universal refusal by all dealers to voluntarily pay any more than the 1975 wholesale price from anyone, much like a reserve clause that kept all salaries artificially low. I'm not talking about a lucky garage sale find, and I'm not talking about an isolated crooked dealer who consciously offers some book widow a pittance instead of a fair wholesale price. I'm talking about a buyers' market that in its own way would be just as rigged as the reserve clause was for ballplayers.

In that situation two things might happen: Either the retail price would drop dramatically---because any customer would feel like an absolute chump in accepting that sort of a systematic markup, as opposed to a fluke---or the dealers' supply would evaporate, and the owners of the books would start selling their copies directly to customers. IOW normal market forces would quickly resolve the contradiction.

Unless, the quantity we found was so large as to fundamentally shift the market, i.e. if we found 20,000 of them, that would presumably lower the value of a individual book remarkably. In which case, our best bet would still be to slowly sell them at market price, until the market figured out what we were doing.

That's actually happened a few times, though not in nearly that large a quantity,** and not ever with a book that's nearly that popular. This book is one of the better known examples within the collectors' market.

**A "20,000" scenario would be impossible to begin with, since the number of books per printing is a matter of record, and in a case like GWTW the price is jacked up by the knowledge that the first printing was only 10,000 copies, and virtually all of them were well read and discarded long before their owners realized that many decades later they were going to be worth (in fine condition with a fine dust jacket) a king's ransom. Even with ebay and amazon around to ease the strategy of bypassing the middleman, there are seldom more than 15 or 20 copies offered for sale in any given year, and that's practically a flood compared to The Great Gatsby (top price well into six figures) and other choice rarities.

EDIT: Even selling as few as half a dozen truly "mint" copies of GWTW within a timeframe of more than one every 2 or 3 years would be extremely dicey. You'd have to find a different dealer as a beard for each copy you'd sell, and you'd still wind up raising a lot of eyebrows trying to unload that many copies of a title that almost never shows up in that sort of prime condition. You'd still make out like a bandit, but if you tried to push your luck for more than those half a dozen copies, you might wind up crashing the entire market.

#429 I have a friend (in my Strat league as it happens) who owns a long running (4th decade of business) game store. He always prices everything at cost plus standard markup and doesn't care if this leads to identical games on the shelf with different prices.

I've been there when perplexed customers have asked him what's different about the two games. If Rusty is lurking, he can confirm that Randy will answer something like "the price".

It works for him.

EDIT: Many competitors have risen over the decades. He's still in business. Mostly he buries them with the cost advantage he gets by refusing (still) to take credit cards and by being willing to take personal checks from people he knows. He had to bend and take debit cards, but that's as far as he'll go.

As usual in a discussion with Andy, since he won't concede defeat

GUFFAW

Which makes him different from you and David how? Please, tell me, I beg you.

He always prices everything at cost plus standard markup and doesn't care if this leads to identical games on the shelf with different prices.

And your friend has the choice to decide on whether to buy a game or not. He is buying games that he can turnaround and sell. He decides his costs based on what he knows the market will bear.

If everybody else is willing to sell him Super Mario Bros for $1 is he going to buy that game from somebody for $30?

#443 Sure he can choose which games to carry (even then though he'll generally get a copy or two of most everything. Wide range of customers), but even in the short run his costs vary considerably in that he's a Canadian business dealing with American suppliers and has to (or to be more precise, chooses to) deal with exchange rate changes all of the time.

The interesting thing to me is that he does a fair amount of special orders and quotes the price as "about". Even here he follows his standard pricing model and he doesn't know exactly what his costs are going to be. His customers are generally fine with this, though I'm sure his approach has cost him sales over the years. I'm equally sure he just doesn't care much. He's not interested in trying to figure out what the market will bear.

His model is good enough for him given the pricing advantage he has over the rest of the field. Not paying credit card fees or for any form of loans generally leaves him way ahead of the field.

Yeah, because he isn't paying his taxes.

As usual in a discussion with Andy, since he won't concede defeat

GUFFAW

Which makes him different from you and David how? Please, tell me, I beg you.

He gets defeated.

Priceless.

I was going to post "The difference is Ray and David never lose" earlier but knew doing so would be superfluous.