| After some research, I believe I found out about a new business model that is probably legal but nevertheless stinks. It is built on our increasing inability to tell Internet from reality.
On uBid, an auction site that auctions off stuff from professional vendors rather than just individuals, there have been a number of auctions trying to sell lots of 500 to 600 pieces of luxury watches. The brand names of these watches are Louis Bolle, Balmer, Bulova, and others.
Using Google, I found that these brands are largely unknown to the public (as measured by the number of hits on Google, and as compared with well-known brand names). The watch companies behind the brands have a website with some marketing material, but it is all simple and static HTML. There is only one other site that offers to sell these watches online, and there is no physical place where you could buy these watches. This other website is selling only those brands that you can try to buy at uBid.
The "official" MSRPs for these "luxury watches" range from $3000 to $7000. The average sales price for one of these watches as I could glean it from uBid is in the range of $100 to $300. What a deal! Just 3%-5% of the MSRP! Except that the MSRP is likely to be a fantasy price and the production cost of these watches much lower than the price the sellers get through uBid.
I actually bought one of these watches. It is nice looking and looks like it is a quality watch. So I guess I shouldn't be complaining.
What is happening here? In a world of impulse buys and greed, the Internet is turning out to become a manifest alternate reality. By setting up a simple website for a brand, it appears you can convince a non-discerning public that your product is for real. Using a fantasy MRSP you anchor people's perception so high that they start to believe they are in for a great deal.
As I said initially, what I described are probably legal business practices. But if you ask me, this money stinks.
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