29 September 2013

music magpie and zoverstocks

A couple of years ago I started noticing the name Zoverstocks as a re-seller on Amazon UK. I began buying CDs and DVDs from them, lured by their keen prices and rapidly escalating tally of positive transactions. These days they are almost always the lowest priced re-seller in a saturated market. Oh, and their positive transactions tally is close to four million - yes, four million.
 
In seemingly no time at all Zoverstocks has cornered the UK market in secondhand CD sales, with a typical selling price of just one penny. How the heck do they do this? Well, a few years ago Music Magpie started offering a simple "buy your old CD collection" service and they still do. Using your webcam you scan the bar code from a CD case and get an instant non-negotiable offer. Not a high offer but enough to steer many from donating discs to charity shops.
 
Yes, Zoverstocks is the sales arm of Music Magpie and it piggy-backs on the biggest online music retailer in the world, Amazon.
 
The way reselling works, and I did this myself quite a bit in the UK, is you list an item for sale on Amazon and when a buyer nibbles the bait, Amazon sends you the purchase money (minus a modest commission) plus a generous contribution to your postage and packing costs. In fact this contribution is so generous it completely covers your costs and adds to your profit. Now you see how Zoverstocks does it. Imagine the economies of scale when you can buy padded envelopes by the million!
 
But this is good isn't it? The free market (with the help of Amazon) is redistributing music to the ears of those who want to hear it, and at a great price. Well it's not entirely good... what about the Artist who used to enjoy royalties on consistent sales of his back catalogue? This new recycling system seems to benefit The Royal Mail, Amazon (by way of commissions) and Music Magpie/Zoverstocks more than anyone. What about the little man who tries to sell online? He can't compete.
 
The scheme is a clever manipulation of the system. Seller A gets something for his unwanted CD, Buyer B gets it for one penny plus postage. In between the two, MM/ZO are creaming off Amazon commissions and the over-valued postage contributions. And what if MM/ZO get hold of rarities? They apply digital scripts to permanently undercut the lowest Amazon reseller price by one penny. As to their costs, research reveals MM/ZO are staffed with cheap Eastern European labour and they 'up' the condition of their discs with a mechanical buff. Various Forums lament the lack of customer care when you get a wrong/damaged disc from them.
 
Are they living on borrowed time?  Digital media is gradually taking over. Soon the likes of MM/ZO will have forced the little seller out and will be the only ones left recycling a diminishing stock of discs to a shrinking audience of committed downloaders. I suppose you can't blame them for making hay while the sun shines.

3 comments:

Russell C.J. Duffy said...

You are right. Although it is not just the artist who suffers but the working man and woman too. For every stolen CD or DVD, downloaded illegally, and this applies to these chaps too re-selling stuff, an electrician, a carpenter, a sound engineer, a studio cleaner, a tea maker, a gaffer all are affected. The companies making films or paying recording contracts will still pay the artist their due. In order to do that they will cut costs. The axe always falls on the working man first.
Another fine post mate.

Perfect Virgo said...

I'm all for secondhand trading, it's healthy. Even though this isn't stealing (it's perfectly legitimate secondhand trading), at one penny it's not ethical, it's squeezing the remaining small retailers and it's cheating the system.

I'm overstating the impact on 'new' back catalogue sales of course as bands admit making more money from T-shirt sales than CDs, but it's pernicious, this selling for one penny malarky. I suppose it keeps the Royal Mail alive pending floatation.

Russell C.J. Duffy said...

Oh no, I wasn't implying this was theft or anything like it. Second hand dealing is very healthy and is something I do every time I buy from a charity shop.
My comment was more to do with what I, you and my old friend Dave have done in the past, download stuff, which is theft. I am as guilty as the next man and no sudden road to Damascus for me, no saintly overnight virtue found. I just feel a tad guilty knowing blokes like me have lost their jobs from my wanting to have music that wasn't legally purchased.
No, I agree. Zoverstocks is nothing, as far as I can see, but good news.
As for the Royal Mail, having worked with then for years and having had European clients (Holland, France and Spain), some fifteen years ago now, who would only use the Royal Mail (THEN) as it was the best postal service in the world, we now find that having gone through an appalling time with said RM when they must have ranked as the worse, they are now making a profit again thanks to Amazon. At which point we privatise them. As a general rule I favour privitisation but not in the case of the railways or the postal service. RM was destroyed by poor management and interfering centralised government.