The best-selling author of the book Water For Elephants is facing potential “financial ruin” after spending $23,000 on Hatchimal toys in a Black Friday resale scheme. Sara Gruen says she used credit cards to purchase $23,595 worth of Hatchimals on eBay after Black Friday. In total, the mother and author would purchase 156 of the highly sought after toys. However, Gruen did not preplan how she would sell these popular toys before making the purchase and quickly realized she would not be able to peddle the toys as quickly as she had hoped, despite the high demand.
The Daily Mail reports that best-selling author Sara Gruen was hoping to use the Hatchimal Christmas craze as a means to raise legal funds for a man she believes is wrongly accused of a crime. Gruen is currently creating a documentary about an unnamed man that she says is innocent of murder. The author says that she has amassed $150,000 in debt trying to get the man’s case back before the Supreme Court and thought the Hatchimals would be a good way to raise additional funds for the effort.
However, Gruen was shocked when she learned that eBay would only allow her to sell three Hatchimals a week on the trading platform. This meant that she would only be able to offload a dozen toys before Christmas despite having purchased 156 of the popular toys. Gruen knew that her profits would dwindle to losses if she didn’t get rid of the toys before Christmas so posted her “sad” story to Facebook.
— Bob McGough (@bob_mcgough) December 2, 2016
In her Facebook post, which has since been deleted, Gruen says that she had no outlet to sell the toys due to regulations put into place by eBay and Amazon. She notes that Amazon would not allow her to sell the product without written consent from the Hatchimal manufacturer and eBay limited sellers to just three Hatchimal sells per week if they have never previously sold the toys. Therefore, Gruen said she began to have “Hatchimal nightmares.”
“Now there are Hatchimals stacked up around every side of my office. I am having Hatchimal nightmares. I have a fortune invested, only one venue to offload them, and in only three weeks they will magically transform into useless pumpkins that will take up space in my office FOREVER, and have caused my financial ruin.”
After posting her sob story, Gruen created her own Hatchimals online store and was able to sell 40 percent of her inventory at a price of $189 to $219. Though she has been able to get rid of the Hatchimals, she may have done irreparable damage to her reputation.
Numerous angry parents took to her Facebook page to decry her actions noting that she was “preying on families” that simply wanted to get their child a toy and did not deserve to pay three times the markup. A Scary Mommy blogger called her a Grinch who was just getting the karma she deserves for using parents desperation as a money-making scheme.
“Screwing over parents anxious to make their kids happy is just the wrong way to go, no matter how she tries to defend it.”
Others have pointed out that her approach was completely wrong as she paid an average of $148 per Hatchimal to purchase 156 of the toys on eBay which is 2.5 times its retail price. Philly notes that Brothers Mike and Stan Zappa were early purchasers of the Hatchimals, spending $5,000 to buy 100 Hatchimal toys back in October. It took just 40 sales for the brothers to break even leaving 60 of the creatures as pure profit. Mike Zappa says that Gruen made an incredibly poor business decision calling it “the worst business decision we’ve ever seen.”
“We are not trying to be negative here, but spending $24,000 on a product at its inflated price is probably the worst business decision we’ve ever seen in terms of economics. Economics 101: Buy low, sell high.”
In other words, they had no sympathy for Gruen given that she paid incredibly inflated prices for toys on eBay and then was disappointed when she couldn’t sell them for an even more inflated price.
What do you think of Sara Gruen’s Hatchimal scheme? Do you feel sorry for the Water for Elephants author or did she get what she deserves for trying to cash in on the Christmas craze at the expense of parents?
[Featured Image by Gunnar Rathbun AP Images]