Rock-N-Roller Confronted With Capitalism

Jack White recently of the band The White Stripes has realized something important, capitalism works. At least it works when properly approached and with the release of several special vinyl albums he is trying to do it right, much to the consternation of some of his cheapskate fans.

As it happens, Mr. White is part of Third Man Records label, a company that produces special pressings on vinyl for the collectors market. But, seeing as how they are both limited and collectors editions, they aren’t cheap. This has apparently made some of his fans mad.

With a price tag of upwards to $300 a piece, some fans have claimed Jack White is ripping them off. But Mr. White begs to differ. He says there is no reason why he should sell these collectors items at cheap prices just so that ebay speculators can buy up a large number of them only to go online and flip them for two, three, or more times as much as the original purchase.

We sell a Wanda Jackson split record for 10 bucks, the eBay flipper turns around and sells it for 300… If 300 is what it’s worth, then why doesn’t Third Man Records sell it for 300? If we sell them for more, the artist gets more, the flipper gets nothing. We’re not in the business of making flippers a living. We’re in the business of giving fans what they want.

White has told his fans to quit the whining because he is giving them exactly what they want, a collectors item that is actually worth the money and giving more money to the actual artists and producers of the works.

White is exactly right. Unfortunately, too many people simply don’t understand how capitalism works (and more especially the capitalism of the collector market). Or perhaps more to the point, they refuse to understand.

In any case, it is good to see someone in the music industry so business savvy as Mr. Jack White. May he prosper.

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  • Ray Dawson

    I’m constantly meeting people who really don’t understand how prices are created. It’s simple, if I have three buyers who are all ready and willing and able to buy something at a certain price, that is the price. 

  • GarandFan

    Guess they expect “artists” to work for free.  After all, didn’t Nancy-poo arrange for “free” medical care so that they could pursue their creative urges?

    • Walter_Cronanty

       SillyFan, they don’t expect “artists” to work for free, they expect the government to pay them with your money.

    • jim_m

       Guess they expect “artists” to work for free.

      That’s the left’s mantra, “I want it, therefore it should be given to me for free”.  You can apply this to everything on the left’s agenda:  Healthcare, College loans, The want free food, they want jobs where they don’t have to work, etc. 

      As Walter correctly points out, it is easiest for them to get he government to pay for what they want, but ultimately they would be just as happy in taking what they want by force.

  • GarandFan

    Guess they expect “artists” to work for free.  After all, didn’t Nancy-poo arrange for “free” medical care so that they could pursue their creative urges?

  • ackwired

    One of the challenges of business is pricing to market.  If your costs are higher than the market is willing to pay, it probably is not a good business model.

    • warnertoddhuston

      One of the challenges of replying to a post on the Internet is being relevant. Since Mr. White is easily getting the prices he wants for his collectibles, your comment is apparently superfluous.

      • ackwired

        Sorry  I must have misunderstood..  I thought you wrote that he was getting complaints about his pricing.

        • warnertoddhuston

          Yet, they are still selling perfectly fine. That was the point. But, you are right that some have been grumbling, so yes, I see what you mean. 

        • Commander_Chico

          The complaints are a benefit to marketing. It’s possible that Jack White is the one publicizing the “complaints.”

          A strategy for marketers who control the supply of a “collectible” is to initially sell at a high price point, to provide the illusion of scarcity and exclusivity.   

          Saps get sucked into paying $$$ initially, then the potential of the market is fully milked by a succession of price cuts.  Since the marketers can produce an unlimited supply, they can successively sell to different groups, first to buyers who are willing to pay $$$X, then $$X-1, then $X-2, etc. 

          The marketing campaigns can even be done through different media targeting different demographic groups, so the stooges who paid $$$ never become aware when the same item is being sold to a different cohort at $$ or $.

          Yes, that is a successful capitalist strategy, too: the ads on back page of Parade magazine, and “collectibles” and “limited editions” sold on QVC are testimony to this. Ten million is a “limited edition,” no?

          How much does it cost to press a vinyl record? I guess under a dollar. Maybe two or three with the cover and packaging.

          As a fan of the History Channel show Pawn Stars, it’s always a hoot when someone rolls into the store to try to sell some “limited edition” “collectible” that they think is worth a lot of money, only to get shot down and told their heirloom is worth $9.99.

          A good rule of thumb is: never buy a “collectible” where the supply is under the control of the seller.

          As Barnum said . . . .

          • ackwired

            I’ve never been involved in the collectibles business.  But this does sound like a sound pricing strategy.

          • Commander_Chico

            Yes, this has been another edition of Chico taking Warner to school.

          • warnertoddhuston

            As if.

          • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

            He has delusions of both relevance and competence…

          • Commander_Chico

            I think you both should buy a few of those records for $300 – they’re a good investment.

          • SCSIwuzzy

            The rare Chico conspiracy theory that does not implicate the Joooooos

  • cirby

    Yesterday, I was sitting in a bar, and a friend of the owner showed up.  He and the owner started talking about the guy’s new business – he had bought a t-shirt printing press, and was going into the custom t-shirt business.  They started talking about prices, and the guy tossed out “$12.50 each for runs of ten and under, $10 for 10 to 99, $7.50 for 100 or more.”

    The bar owner had to explain that he already got t-shirts from his current supplier for less than that – almost $2 less per shirt at each level.  The guy was gobsmacked – he was upset that his old buddy the bar owner would buy cheaper shirts (better quality at that) from someone he’d been doing business with for years instead of changing over to a new supplier and paying more money.  You know, because they were old buddies and all…

    I see that a lot with the “old hippie” type of small business owner.  They start making something, and either pick a really low price point (where they can’t make a profit once they account for rent and other costs) or a crazy-high price point that nobody will pay.

    • ackwired

      Spending a little for market research almost always pays off!

  • LiberalNightmare

    I’m uncomfortable with any thread that starts out with the assumption that Jack White is an artist.

  • LiberalNightmare

    I’m uncomfortable with any thread that starts out with the assumption that Jack White is an artist.

  • http://www.facebook.com/people/Paul-Hooson/100002939023994 Paul Hooson

    Life is better with money. But, Jack White was better with The White Stripes. His latest solo album wasn’t as good as The White Stripes.

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