Mule Team flipping

[tvenuto]

I just can't see how, in this day and age, someone can argue for less personal responsibility and honesty. Recently, the Lil' Lionspy was erroneously priced on the SFO. Did we see a feeding frenzy on that model? No, we saw people here emailing the SFO to correct the mistake, and several people declaring that although it would be awesome to get that knife on the cheap, they'd not be able to look at themselves knowing they took advantage. Was it legal for them to buy the knife at the lower price? Wouldn't the free market dictate that they had a chance at material gain by buying something below its fair market value? Of course, but their moral compass told them not to do it, and I think that should be applauded, not declared completely illogical.

[chuck_roxas45]

I just can't see how, in this day and age, someone can argue for less personal responsibility and honesty. Recently, the Lil' Lionspy was erroneously priced on the SFO. Did we see a feeding frenzy on that model? No, we saw people here emailing the SFO to correct the mistake, and several people declaring that although it would be awesome to get that knife on the cheap, they'd not be able to look at themselves knowing they took advantage. Was it legal for them to buy the knife at the lower price? Wouldn't the free market dictate that they had a chance at material gain by buying something below its fair market value? Of course, but their moral compass told them not to do it, and I think that should be applauded, not declared completely illogical.

Well said!

[Cliff Stamp]

Of course, it might be easier to just start with a simple check box on checkout where you have to agree to terms stating that you do not intend to flip your mule. Maybe it wouldn't dissuade anyone, but people tend to be honest and it would be easy enough to implement.

I would have to review laws, but I don't think that is legal. There is a bit of a fine line there, but I think that may cross it. A seller is allowed to have a specific customer base and offer specific discounts but you have to take care in what you are restricting. I think you could be acted against if you tried to restrict secondary sales directly.

The other runs though are interesting. What about if there was a list and once it reached the number which is practical for Spyderco they just made that run of Mules.

One thing that you hit on is that if you do make it very rare to flip mules as it is hard, and there is not a lot of them, when they do flip the price will be extreme. Thus in acting to prevent it, you could make the problem much worse.

[akaAK]

The simple fact is that the more you try to restrict flipping the more likely you are to make it profitable to do so.

I would hate to see the mule program go away. I haven't bought all of the models but I have bought the ones I was interested in or the ones that were available when I had the funds. None from the secondary market all from SFO. If I had to pay up front and have my funds tied up for 1-2 years I could live with that.

Also Cliff, in you chicken story they aren't your customers as you are giving the chickens away. If one of these less fortunate people accepted the gift of one of your chickens turned around and sold it on the open market and then used the money for shoes or medicine that were badly needed would that potentially be fraudulent? While I don't agree with a lot of what you write in this forum I think I have a pretty good idea of which side of this you would land on. I believe once you have provided a gift your rights to that gift go away unless you have established specific conditions that are agreed to by both parties.

Lets be honest, I look at this as a gift, sure we pay for them but the sheer availability and generosity of this program is the gift. Some people will take advantage, arguing about the morality or right and wrong is never going to change that.

[tvenuto]

Lets be honest, I look at this as a gift, sure we pay for them but the sheer availability and generosity of this program is the gift. Some people will take advantage, arguing about the morality or right and wrong is never going to change that.

Very true, and maybe we've stirred the pot to little avail. However I'm glad Sal opened up the question, and I think it's a worthwhile thing to discuss. After all, discussions, ideas, and arguments are what a forum is good for. Maybe the answer is that there's no practical solution that keeps the integrity of the mule team project intact. I guess it's just up to those who appreciate what the project is for to use the **** out of our knives and keep this awesome program rolling!

[Cliff Stamp]

If one of these less fortunate people accepted the gift of one of your chickens turned around and sold it on the open market and then used the money for shoes or medicine that were badly needed would that potentially be fraudulent?

The intent is still there, so no. If they however needed the chicken, picked it up and then sold it and bought cigarettes while their children were hungry then the claim could be made. However each time you walk down this chain it gets harder to say "you can't do that" because at some point you have to help people but let them decide on what they need help. What about if they pick it up, decide they don't like chicken really and give it to their neighbors dog. It is easy to come up with examples which appear to be wrong but are pretty muddy/diluted. However someone who is at no risk of being hungry but just wants to maximize profit is clearly not the intended customer.

This is a fairly serious problem in real life with social welfare programs. Locally for example there were people running food banks and similar to help low income families. There were people perfectly willing to get the food/items by pretending to be low income and then "flipping" . The fact that people do this often leads to such programs being shut down. There was a clothing store (not local) which used to donate all damaged items to shelters. Then someone got the idea to take them and start doing returns/warranty claims on them and again "flipping" them. That shut it down. At the bottom line, as long as people are willing to ignore the intent and collect / but because they want to, then it is likely to happen.

I believe once you have provided a gift your rights to that gift go away unless you have established specific conditions that are agreed to by both parties.

Yes, the claim here is that is what is being done in both cases. Spyderco makes the Mule team to get very inexpensive knives in rarer steels out for people to experience them and provide some kind of testing/feedback ground. People are leveraging the rare nature by flipping them at high prices, that happens with all exclusive runs given the internet and shopping, it is no different of course than ticket scalping.

[Cliff Stamp]

Maybe the answer is that there's no practical solution that keeps the integrity of the mule team project intact.

I think you have to look at best solutions, not ideal ones.

Lets say you really enjoy working with sharpening stones and you buy a lot of them, learn about them through experiment. At some point you will learn what you want to know and you will never use up all of them so you decide to give them away. You have a weekly sharpening stand and each week you give away a stone to the person you feel would most benefit from it, who is most likely to use it. Now a guy finds out you are giving them away and he then show up and asks for it for no other reason than to "flip" it. When you discover it, he just asks a friend to do it. Would you let this stop you from giving them away? Is the fact that you want to stop this guy from having a "wrong" benefit enough to stop you from helping even one other person "right".

This by the way is a very classic problem in human psychology (and/or economics). It is a very simple game to be played with two people :

-one person gets $10
-that person makes an offer from $1 to $10 to the other person
-if the second person accepts it then they distribute the money as offered
-if the second person rejects it then both people get no money

Now rationally you should accept even $1. However a lot of people would rather not have $1 if it meant someone else got $9 as they don't think that is fair. In fact some people will reject any offer just to keep money out of the other persons hands.

[Ankerson]

If one of these less fortunate people accepted the gift of one of your chickens turned around and sold it on the open market and then used the money for shoes or medicine that were badly needed would that potentially be fraudulent?

The intent is still there, so no. If they however needed the chicken, picked it up and then sold it and bought cigarettes while their children were hungry then the claim could be made. However each time you walk down this chain it gets harder to say "you can't do that" because at some point you have to help people but let them decide on what they need help. What about if they pick it up, decide they don't like chicken really and give it to their neighbors dog. It is easy to come up with examples which appear to be wrong but are pretty muddy/diluted. However someone who is at no risk of being hungry but just wants to maximize profit is clearly not the intended customer.

This is a fairly serious problem in real life with social welfare programs. Locally for example there were people running food banks and similar to help low income families. There were people perfectly willing to get the food/items by pretending to be low income and then "flipping" . The fact that people do this often leads to such programs being shut down. There was a clothing store (not local) which used to donate all damaged items to shelters. Then someone got the idea to take them and start doing returns/warranty claims on them and again "flipping" them. That shut it down. At the bottom line, as long as people are willing to ignore the intent and collect / but because they want to, then it is likely to happen.

I believe once you have provided a gift your rights to that gift go away unless you have established specific conditions that are agreed to by both parties.

Yes, the claim here is that is what is being done in both cases. Spyderco makes the Mule team to get very inexpensive knives in rarer steels out for people to experience them and provide some kind of testing/feedback ground. People are leveraging the rare nature by flipping them at high prices, that happens with all exclusive runs given the internet and shopping, it is no different of course than ticket scalping.

There will always be people out there that will find ways to exploit positive things and turn them into negatives one way or another.

It's human nature and a morality issue.

Personally I believe those types are the lowest form of scum on the planet down there with pedophiles and rapists.

Opinions may vary, but that is mine for what it's worth.

[akaAK]

Cliff, you are right, the further down the chain and the more scenarios proposed the harder it is to draw a line in the sand. As I suspected you are of the same mindset as me I think, if someone is providing necessities for their family or community I can see the "morality" in their actions. If someone wants a couple of extra drinks at the bar or the latest pair of sneakers I have a harder time seeing that "morality" in their actions.

It is a good thing that we get to discuss this without our lives on the line.

[QUICKSILVER]

Maybe the answer is that there's no practical solution that keeps the integrity of the mule team project intact.

I think you have to look at best solutions, not ideal ones.

Lets say you really enjoy working with sharpening stones and you buy a lot of them, learn about them through experiment. At some point you will learn what you want to know and you will never use up all of them so you decide to give them away. You have a weekly sharpening stand and each week you give away a stone to the person you feel would most benefit from it, who is most likely to use it. Now a guy finds out you are giving them away and he then show up and asks for it for no other reason than to "flip" it. When you discover it, he just asks a friend to do it. Would you let this stop you from giving them away? Is the fact that you want to stop this guy from having a "wrong" benefit enough to stop you from helping even one other person "right".

This by the way is a very classic problem in human psychology (and/or economics). It is a very simple game to be played with two people :

-one person gets $10
-that person makes an offer from $1 to $10 to the other person
-if the second person accepts it then they distribute the money as offered
-if the second person rejects it then both people get no money

Now rationally you should accept even $1. However a lot of people would rather not have $1 if it meant someone else got $9 as they don't think that is fair. In fact some people will reject any offer just to keep money out of the other persons hands.

Cliff,

Is your example a version of the prisoners dilemma from game theory? In game theory, the rules shape behavior. Maybe this is the answer to flipping.

How could Sal change the rules to discourage flipping and provide an improved buying opportunity for highly motivated users and collectors?

For example, separating payment from receipt would increase risk for flippers. In the current system, Spyderco plays the role of the distributor and flippers play the role of retail outlet. Selling almost immediately maximizes profit for flippers. If they have to wait for months to receive the mule, they have their money tied up and the desirability of the particular mule may decrease. If they are buying with a credit card, 20% interest will eat profits quickly. Risk of loss increases and flipping becomes less desirable.

Spyderco has complete control in setting the buying rules. Crowd sourcing rule changes on this forum should be useful to Sal. How could the buying rules be changed to make the buying system better?

Bill Maier

[Ankerson]

It's difficult to control, they set a limit of 2 per person, but some will find ways to exploit the system one way or another.

I am sure Spyderco isn't selling blocks of 20 or more so to people.

Now the Sprint runs, well we have to look more at the Distributors and actual Knife Shops on that.

Some how people end up with large blocks of sprint runs before anyone else and they end up on EBAY for crazy prices, and that's not just Spydercos either so we have to look at the Knife Shops and Distributors and start digging into how the **** these people end up with those products. That's not something that would be easy or cheap to do and would cause friction between the Knife Manufacturers and the supply line. Those products aren't just falling out of the sky, they are getting them from somewhere in the Supply line.

Would it be worth it?

That's totally up to the Knife Manufacturers.

However one way to help track the products would be to start adding Serial Numbers, but that would add cost and workload for the Manufacturers.

But it would make it easy to track the products in the end from the Manufacturer to were they end up and every step along the way.

So when blocks of products end up on EBAY etc they would be numbered and very easy to track and find were the problem is in the supply line and address it accordingly.

I would highly recommend adding Serial Numbers to all Limited Editions and or Sprint Runs.

[moe1a]

I wonder why this is a problem? Thanks to EBAY I was able to add a couple of Mules to my collection that i originally missed out on. Unless some fake Mules made with "Exotic" Chinese steel start showing up where's the problem?

[Philo Beddoe]

I would highly recommend adding Serial Numbers to all Limited Editions and or Sprint Runs.

I'm not following u? ZT puts Serial Numbers on their LE's and it hasn't made a bit of difference..their LE's are flipped as much if not more than Spydercos..

You say tracking all these serial numbers would be easy..are you sure about that? Say 1000 Millie sprints are made then one winds up on ebay/BF's etc...IF the seller doesn't take a pic of the serial number then how would we know which one it is? Also who does the tracking? Spyderco? That would add a lot of work to Spyderco's already busy schedule and time=money so we wind up paying more in the end.

One question I've never seen accurately answered is how long do you have to wait to sell a LE/Sprint before you aren't considered the "lowest form of scum on the planet down there with pedophiles and rapists." A week..month..117 days..248 days..year? Grey area?

[Ankerson]

I would highly recommend adding Serial Numbers to all Limited Editions and or Sprint Runs.

I'm not following u? ZT puts Serial Numbers on their LE's and it hasn't made a bit of difference..their LE's are flipped as much if not more than Spydercos..

You say tracking all these serial numbers would be easy..are you sure about that? Say 1000 Millie sprints are made then one winds up on ebay/BF's etc...IF the seller doesn't take a pic of the serial number then how would we know which one it is? Also who does the tracking? Spyderco? That would add a lot of work to Spyderco's already busy schedule and time=money so we wind up paying more in the end.

One question I've never seen accurately answered is how long do you have to wait to sell a LE/Sprint before you aren't considered the "lowest form of scum on the planet down there with pedophiles and rapists." A week..month..117 days..248 days..year? Grey area?

Extremely easy to track if they actually wanted to do it.

Just like a car for example, they can find out who had that car every step of the way in it's history from the time it was made until it's melted down all by the Vin Number.

Very, very simple to do, almost trivial.

The Manufacturer records the Serial Numbers and were they went so if they end up on EBAY etc, well the Serial Numbers are on the Invoices, simple, look it up and make a freaking phone call.

Trivial.

All they need is one in the block that ends up on EBAY etc, the Serial Number will be on the knife and they can track it and the others in that Block of numbers.

[Philo Beddoe]

I would highly recommend adding Serial Numbers to all Limited Editions and or Sprint Runs.

I'm not following u? ZT puts Serial Numbers on their LE's and it hasn't made a bit of difference..their LE's are flipped as much if not more than Spydercos..

You say tracking all these serial numbers would be easy..are you sure about that? Say 1000 Millie sprints are made then one winds up on ebay/BF's etc...IF the seller doesn't take a pic of the serial number then how would we know which one it is? Also who does the tracking? Spyderco? That would add a lot of work to Spyderco's already busy schedule and time=money so we wind up paying more in the end.

One question I've never seen accurately answered is how long do you have to wait to sell a LE/Sprint before you aren't considered the "lowest form of scum on the planet down there with pedophiles and rapists." A week..month..117 days..248 days..year? Grey area?

Extremely easy to track if they actually wanted to.

Just like a car for example, they can find out who had that car every step of the way in it's history from the time it was made until it's melted down all by the Vin Number.

Very, very simple to do, almost trivial.

The Manufacturer records the Serial Numbers and were they went so if they end up on EBAY etc, well the Serial Numbers are on the Invoices, simple, look it up and make a freaking phone call.

Trivial.

Yep and give me 30 seconds with a Dremel tool with a grinding stone and I'll remove that pesky serial number :D

VIN numbers are a whole other can of worms..SUMMARY: Illegally removing or altering a vehicle identification number (VIN) or selling or possessing a motor vehicle or motor vehicle part with an altered or removed VIN constitutes a crime in most states.

You can get in some serious doo doo removing/altering VIN numbers..not so with knife serial numbers..

[Ankerson]

I would highly recommend adding Serial Numbers to all Limited Editions and or Sprint Runs.

I'm not following u? ZT puts Serial Numbers on their LE's and it hasn't made a bit of difference..their LE's are flipped as much if not more than Spydercos..

You say tracking all these serial numbers would be easy..are you sure about that? Say 1000 Millie sprints are made then one winds up on ebay/BF's etc...IF the seller doesn't take a pic of the serial number then how would we know which one it is? Also who does the tracking? Spyderco? That would add a lot of work to Spyderco's already busy schedule and time=money so we wind up paying more in the end.

One question I've never seen accurately answered is how long do you have to wait to sell a LE/Sprint before you aren't considered the "lowest form of scum on the planet down there with pedophiles and rapists." A week..month..117 days..248 days..year? Grey area?

Extremely easy to track if they actually wanted to.

Just like a car for example, they can find out who had that car every step of the way in it's history from the time it was made until it's melted down all by the Vin Number.

Very, very simple to do, almost trivial.

The Manufacturer records the Serial Numbers and were they went so if they end up on EBAY etc, well the Serial Numbers are on the Invoices, simple, look it up and make a freaking phone call.

Trivial.

Yep and give me 30 seconds with a Dremel tool with a grinding stone and I'll remove that pesky serial number :D

VIN numbers are a whole other can of worms..SUMMARY: Illegally removing or altering a vehicle identification number (VIN) or selling or possessing a motor vehicle or motor vehicle part with an altered or removed VIN constitutes a crime in most states.

You can get in some serious doo doo removing/altering VIN numbers..not so with knife serial numbers..

Not so easy on a knife blade if it's engraved/lazor cut into the steel, would be almost impossible to hide that it has been altered, one would have to grind a good bit of steel away.

[Cliff Stamp]

I wonder why this is a problem?

The rarity is causing people to invest in mules, to buy a bunch of them and then "flip" them for a much larger price. In the extreme just consider this situation - I buy all of the mules of one run, triple the price and put them on Ebay. This obvious would cause Spyderco and the fans some concern.

By the way, if you want to see this kind of thing sprints/etc. then it happened to the comic book market already. There was a boom caused by people who would buy in gluts comics that were rare and then do the same thing, it was one of the reasons attributed to the huge crash in comic sales when the market shifted because of the inability to buy comics unless you had the ability to invest in large runs.

[Cliff Stamp]

Is your example a version of the prisoners dilemma from game theory?

Not exactly, it is similar but works on a different principle. The ideal solution to that problem is however very interesting. Your approach to dealing with the problem of flipping is however much simpler/more efficient than the one I proposed and far easier to implement. I do think though that the simplest thing is to increase the runs and simply remove the rarity. As HS5 noted, if the runs would in fact not be special edition and for example each year a run could be made which was the most in demand, it alone would severely reduce secondary market flipping.

[Ankerson]

The Serial Number thing is pretty simple really.

The Serial Numbers are recorded and Sent off in blocks to the various Distributors and Knife Shops, dates shipped etc.

So when a number of them end up on EBAY or whatever before anyone else has them like still on pre order etc the Manufacturer gets one of them and looks up the Serial Number.

Then once it's looked up and they find out were that block went to they pick up the phone and call that Distributor or Knife Shop and simply ask them how the **** X number of knives in Y Block of numbers that THEY HAD ended up on EBAY or whatever Z amount of time before anyone else got them.

Specifically if the Knife Shop has a Limit of 1 or 2 per customer, how did 20 of them in their Block of Serial Numbers end up on EBAY from the same seller before any of the Customers got them?

Or to the Distributor how did that block of Serial Numbers ended up on EBAY etc before the Knife Shops got them?

Or the Shops don't have any, but there are 50 of them on EBAY or whatever..

It would be VERY easy, trivial to track down, wouldn't take more than maybe 5 or 10 mins of actual time to find out what happened once they had the Serial Numbers.

That's if the Manufacturer actually really wanted to do something about it in the 1st place.

That's something they couldn't hide from or even begin to try and deny as it would all be in black and white.

[jtoler_9]

How about this as a solution.

All those against flipping, buy two mules and sell your second at cost. It will drive the price down on the secondary market.

I still fail to see how flipping mules hurts the intent of the program any more than folks buying two and shelving one for a rainy day. Similarly those that buy a mule just to display it on a shelve.