The concept of supply and demand T.M.X. Elmo and Playstation 3

If you don't know basic economics you may end up overpaying for something and kick yourself when you see that item go on sale after the holiday season. Two examples.

1. T.M.X. Elmo - the 10th anniversary addition of the infamous "Tickle Me" Elmo. This is the must have toy for toddlers this season. Prices jumped (at the peak of the holiday shopping season). According to Reuters Los Angelos:
   

"The most popular e-commerce site, eBay reported that 2,537 T.M.X. Elmos—Mattel's popular but hard-to-find toy—were sold on Black Friday for an average price of $70.10.

The toy, eBay's No. 1 searched-for item, retails at Wal-Mart Stores Inc. for $39.97 and can be found on Shopping.com for as much as $150."

The lesson don't get caught up in the hype. Don't let your kid get you caught up in the hype. One of my co-workers ended up with 5 TMX Elmos after getting summersed in some vicious bidding wars. She lost track of which ones she bid on (being a novice ebayer) now she's trying to unload them. She paid $50 per toy and stands to make out like a bandit, (if she had any financial savy), but she decided to give them to friends for the price she paid (which is a deal now).

2. Playstation 3 - the greatest, most powerful gaming console ever created (with the heafty price tag to prove it). Retailing for $600 is Playstation's answer to Xbox and Wii. There was a limited number of units shipped to the U.S. Due to the small supply and great demand - people lined up to get a chance to buy one. I think someone actually got injured while waiting in line, others were robbed -- crazy stuff, it's not like the Playstation is a new Star Wars film, but people came out in droves.


Also from Reuters Los Angelos:
Other popular items on eBay included Sony's PlayStation 3—14,675 have been sold on eBay for an average price of $1,186.39 from November 17 to November 24

Due to small supply and huge demand the price increases. The key here is to know someone in Japan that can hook you up or just wait it out. I saw an ad for the original Nintendo game system for $20 (I remember getting it for Christmas one year, the classic SuperMario Bros and Duck Hunt combo game, I believe the cost then was about $150, that's how much PS2 goes for now). One kid bought 20 PS3's and is now going to sell them. And there it is. Happy Holidays!