By Tom Bell
Portland Press Herald, Maine.
Some savvy capitalists are profiting from the scarcity of L.L. Bean boots by reselling them on the Internet at marked-up prices.
Call them boot scalpers.
This is how it works:
Need a pair of size 9 women’s tumbled leather shearling-lined L.L. Bean boots by Christmas? Those boots retail at the Freeport store and on its website for $199, but the historic outfitter and apparel company can’t keep up with demand. For that model and size, the company expects to deliver the boots Jan 4.
But a Scarborough resident with the eBay name “jenque” will sell you a brand new pair and deliver them on Dec. 10. The price: $399.
Mainers in Harrison, Scarborough, Portland, Bath and Bangor are among the many eBay and Amazon retailers hoping to make money by speculating on the classic rubber-bottom boots and reselling them.
The practice is called “retail arbitrage” or “flipping.” People buy items at a marked-down or a retail price and sell them online at a profit.
Traders have been making transactions like this since the dawn of capitalism, but the Internet has made it so much easier.
It famously happened in 2006 when Toys R Us began selling Tickle Me Elmo, and the doll almost immediately was sold out nationwide. Then Tickle Me Elmo began appearing on eBay at prices up to $500.
Thousands of people across the country today are operating home businesses based on this concept, said Skip McGrath, an online retailer and author of several books, including “The Complete Idiots Guide to eBay.”
The business is based on the law of supply and demand, he said. The key is to buy a product with a limited supply and growing demand.
“The seller has to have knowledge about which products are going to be hot,” he said.
It helps to have a deadline, like Christmas or Mother’s Day, because people are willing to pay more for a product if they need it quickly, he said.
For example, in September 2013, Toys R Us had a clearance sale of Buzz Lightyear goggles with built-in flashlights. The store was selling the goggles for $6, or less than half the normal price. McGrath had the notion that goggles would be a popular item for Halloween and bought a bunch. He sold them on eBay for $14.95 and jacked up the price above $20 as Halloween approached. He sold them all.
The online trades may appear to offer little value to society, but they do serve a purpose, McGrath said.
“People want stuff, and they want it now,” he said. “If the local store is out of a toy and that’s what their granddaughter wants for Christmas, they will go online and pay any price.”
In the case of L.L. Bean, college and high school students have driven up demand for the iconic boot, and the company’s factories in Brunswick and Lewiston can’t keep up.
A decade ago, the company sold about 100,000 pairs of boots a year. This year it will be selling 450,000, company officials said.
L.L. Bean sells 65 versions of boots, ranging in price from $79 for a low-cut boot to $199 for a shearling-lined women’s boot.
Many of the most popular styles are out of stock and on backorder. Boots ordered now online or by telephone through the retailer’s catalogs likely won’t be shipped until after the holidays are over.
The company is hiring 100 workers to make more boots.
“We’re making them as fast as we can,” said Mac McKeever, a company spokesman.
The company won’t consider raising its prices to capitalize on the surge in demand because it wants to maintain the “integrity” of its original price, he said.
“That is something we do not do.”
McKeever said the company isn’t worried about retail arbitrage traders. He said the fact that people are selling the boots at marked-up prices indicates the boots’ popularity.
The company has seen it before with other products, such as a limited-edition bag made from the rain tarp used at Boston’s Fenway Park, McKeever said.
“We have seen cases like this before,” he said. “Anytime you have a product that is in high demand, you are going to see things like that.”