Thread: Market Forces and Razor Prices

Originally Posted by holli4pirating

Perhaps we disagree on what scarce means. I don't think 1 or 2 per week on ebay is scarce. I'd actually bet that Filly's were more available when the prices were nuts than they were when the prices were low.

Yes, antique store stock is lower than it used to be, but I do not think it's gone. I actually think Ebay is largely responsible for the stock disappearing. A lot of people who may have taken razors to antique shops are going to ebay instead, because there are more buyers and more impatient buyers on ebay. And antique shops themselves are also turning to ebay for the same reasons. Not to mention a lot of people who don't know anything about straight razors think their poor condition razors are worth big bucks because they "saw it on ebay."

And that "saw it on ebay" is the same thing that drives up prices. People have seen Filly's selling for hundreds so now that is what they are "worth."

If you believe in supply and demand, than regardless of the differences we may see in supply, we believe the same thing about demand. Ultimately, it is the demand buyers have for razors and their willingness to pay the massively inflated prices that keeps straights expensive. You may not assign as much of the "blame" to the buyers as I do, but I don't think you can escape laying at least half the "blame" for high prices on the buyers. After all, they are half of the "supply and demand" chain.

I have re-read my posts and your posts - I don't even know why we are going back and forth about the statements. Neither of us have stated anything that is contrary to the other's statements. Of course the buyers are to blame. Of course it is that they want what they want when they want it and are willing to pay for it. When there is a shortage they pay more.

Right now the demand is outpacing the supply. But that does not mean that some collector is not going to kick off and his wife or kids puts up his stash and increase the supply, maybe even lower the prices.

BTW - how is your health

Originally Posted by HNSB

I think the demand curve has shifted more than the supply curve. Versus a few years ago, razors are more scarce relative to the demand, not relative to the supply.

But... "Scarce", IMO, refers to the moment and circumstances of the transaction. If you've been crawling around the Sahara for four days with no water, and I show up with a full canteen, I possess a scarce resource which you'd pay dearly for even though four days prior you wouldn't have paid more than a few dollars for it.

I think part of the confusion generated by prices of some particular razors is that they are "Veblen goods", where the price increases because the item is perceived to be more valuable as the price goes up.

Isn't the supply and demand curve integrated?

We get 100 new guys here and tell them that the best shaver in the world is a Bengal. Bam! 100 guys go out looking for a Bengal. The bay has 5 for sale. For 5 people there is no scarcity of supply. For the other 95 there is. So the next day, 1 more goes up for sale. All 95 guys that are red-butted because the lost out on the first 5 and have to have one go after the newly posted razor. The bidding ends and the razor went for a rediculous price. Now the new going price is going to be a lot higher.

It never matters to the market if something is as valuable as people are willing to pay - it only matters that the percieved value is what somebody is willing to pay.

I know guys that make a really good living buying and selling baseball cards. What is the value of cardboard and ink? It has to do with scarcity and the psychology of I have it and you don't.

what else is the newcomer supposed to do?

the newcomer may browse the classifieds here or the numerous vendors' websites who offer used non-hyped razors for a fraction of dubl duck and large-filarmonica prices or try their luck on ebay or rummage through antique store items

the newcomer has many choices, he or she is not under obligation to purchase an overpriced razor. if the newcomer decides to run with the first tip they get, they've limited their own options

Originally Posted by hoglahoo

the newcomer may browse the classifieds here or the numerous vendors' websites who offer used non-hyped razors for a fraction of dubl duck and large-filarmonica prices or try their luck on ebay or rummage through antique store items

the newcomer has many choices, he or she is not under obligation to purchase an overpriced razor. if the newcomer decides to run with the first tip they get, they've limited their own options

You do understand that I am talking about the market right? That it is not about the buyer making other choices? It is about the buyer needing the brand that got hyped. It is about the buyer needing what he does not have and is willing to pay whatever it takes for it.

I am trying to explain why the prices get rediculous, not what other choice the buyer has. You do realize that when I made that statement it was relative to the razor he wants, not the razor that is available and probably a better choice, correct?

I don't think there's any question how supply and demand works. The issue though is how do we affect it. From my observations not many people are willing to affect the supply side an provide sought after razors at below market prices. There was one seller few months ago that dumped a dozen or two filarmonicas at the same time and they all sold for around $100. Well, then sometime later some of them showed up in the classifieds for around $200.
Is it fair for somebody to take advantage of changing market prices and turn up profit? I don't see a reason of why not. Although it'd be a bit weird if at the same time they claim the market prices are unreasonable.

I am grateful that on few occasions somebody saw a nice razor well below market price and they didn't want it for themselves, so they told me. They could've easily made $100-$150 by just flipping it, but instead they preferred to save me that money. Great gestures but doesn't happen very often, and I don't expect it to, either.

Then comes affecting the demand side. Why is a standard dubl duck, filarmonica, puma, or vintage boker or dovo razor so hyped - they are relatively plentiful? I for one think any of them hones easier and shaves better than any current production razor. So I'm wiling to pay more for a better razor and I place premium on the condition too. Can I find other razors from less known brands that are just as good - of course, but the less known brands don't seem to have the consistency of these top ones. It seems that any dubl duck I can get (in excellent condition, mind you) is better than a current production razor, while a razor from brand ABC may be better, worse, or about the same. Of course, I may choose to buy 5 ABC razors, or one DublDuck razor and in both cases probably end up with at least one great razor.

Last week I bought my first razor for 2011 on ebay. It had rust on the blade and ivory scales, but I knew it will turn out rather well and was happy to get it for the $40 or so it ended. After it's cleaned up it'll certainly be an over $100 razor, and that's alright with me. I also would've happily paid $200 for it, had I found it as a cleaned up and proven shaver in say the classifieds.
I'd also pay the market price for a filarmonica, but it has to be a very specific model, point and scale color. I already have few nice ones and at this point I'd only replace with something that perfectly matches my taste.

Originally Posted by Alembic

Right now the demand is outpacing the supply.

I disagree with this statement. It's not just supply and demand.

I think the high prices are due to two main factors:

1. People have seen razors sell for crazy prices and actually believe those crazy prices are normal and then are willing to pay those crazy prices.

2. People are impatient, and will throw out maximum bids every time they see a razor they want, rather than waiting to get one at a lower price (either at an antique shop, or an under the radar auction, or from wherever else.

Like I said before, the Fillies were never lacking in supply; there have steadily been one or two per week and there were very clear indications that there were lots more coming. But because of 1) and 2) above, they were still crazy expensive.

I draw further support for this line of thinking from a contrary ebay example. One seller listed about 10 Filly DT 13's and about 10 Filly DT 14's, all were NOS. Maybe you saw it? There was a thread about them here on the forum. The 13's went for about $90 each and the 14's ranged from about $100 to $140 or so. These are the same razors that others are paying $200-$300 for. Why the price difference? With that many coming up at once, people were putting in low bids and figuring they would get at least 1 rather than putting in high bids because they HAD to have one THIS WEEK.

In short, we do disagree. We disagree about what the supply is, and we disagree about why people pay so much. You seem to be saying it's because razors are scarce and people want them. I do not see razors as scarce, and I think what people pay is a product of their ignorance/rationalization of prices/impatience. There is a big difference.

After all, how many posts do you see where people say "Yea, some guys have more money than brains" or "Yea, I just love the local finds!" or "Gotta love the off the radar auctions!"

I echo Holli's rhetorical question as to whether prices overall have really skyrocketed recently. My feeling is that they have not. For every posting that touts an astronomical final auction price of a sought after razor (which forces me to wipe the drool from my chin with one hand and grab the camera and think about selling said razor or razors from my collection and make money with the other), there seems to be another posting from someone gleefully announcing that they got such a razor for a song.

If I really thought that razor prices in general increased dramatically, I would be unloading my collection on Ebay. Instead, most of my modest collection is stored away for another day.

I do agree that new production razors could be a good investment in my mind if I could be assured that they would not one day be made illegal in the U.S. since dealing in the black market on anything does not interest me in the least. I've daydreamed about buying one or two vintage razors per month from the Revisor website and putting the razors unhoned in long term storage for an investment. But I neither have the funds nor the real motivation to do it.

I've also hesitated on investing in collectibles of any kind (small scale collecting for me is enjoyable) given the fact that such tangible items are prone to loss and damage due to fire, theft, etc. Try telling an insurance claims adjuster that the vintage razors you lost in the fire are absolutely high valued antiques, every one of them, and worth at least as much as the top prices paid on recent Ebay auctions. Most people, myself included, if they can get the coverage for "agreed value" on such collectibles scheduled on a homeowners policy for example, probably wouldn't want to bother with paying the additional premium even if, relatively speaking, it may be affordable.

Chris L

Originally Posted by Alembic

Isn't the supply and demand curve integrated

No. You're on the right track, but there are economic models that explain this...
See the picture below: P is price, Q is quantity of product. S is supply, D1 is original demand, D2 is what happens when a product gets hyped... When a brand gets talked up here the demand curve shifts to the right, but the supply curve doesn't move. Supply shows how many people are willing to sell a given product at various prices. Demand shows how many people are willing to buy products at various prices. When we talk about "supply and demand" usually we are discussing a shift in one of those curves. When a razor gets talked up, more people want to buy it. Various people will fall into different price ranges, but bottom line the curve shifts to the right because in general people want it more than they did before. Notice where the curves intersect... That is market (equilibrium) price. When the demand curve goes right, market price goes up. The same is true if the supply curve shifts left. (less products available at all prices makes the market price go up)

I will explain this in more detail later tonight, but for right now I have to go back to work.

Originally Posted by Alembic

I am trying to explain why the prices get rediculous, not what other choice the buyer has.

Ah. I was just replying to the bit about "what else is the buyer is supposed to do?"" - I don't understand the razor market psychology yet. maybe someday!

Originally Posted by hoglahoo

I don't understand the razor market psychology yet. maybe someday!

It's very complicated - the more talk about how such and such razor is the Chronic, the more people want to have it, the more prices are going up, the more people with such razors want to dump them and make a nice profit.

Or, one can take a shortcut, and just increase the price when a razor doesn't sell because it's undervalued. When the price gets closer to the value of the razor it sells. It's been demonstrated to work, similarly to the more conventional way to handle it and decrease the asking price.