Ebay, Playstation games, etc.

So I just replaced my horribly scratched copy of Madden 2001 for Playstation 2 with one I got off of ebay. I got it for $40 (no shipping since the guy was in the city, so I could pick it up). It was in the original plastic wrap, just like hundreds of other copies of the game for auction on ebay. Most of these also wind up going for about $40. In the city, the game retails for $52 and change, plus tax. I saved $16 and change by not buying it at Software Etc.

My question is this: Where do all these people get unopened copies of video games that they can afford to sell well below retail? Several people have dozens of such games. Is there something corrupt going on here, or just something shady? Thanks.

Thoughts:

The seller may work at a retailer and get a discount. Whether the discount is 10% or five fingered depends on the seller.

A local store may have ordered too many copies or wants to pull people into the store. The seller could pick up games for less than market value.

The seller may have received the game as a gift or through some other manner in which just returning it to the store is impossible.

If they’re selling a lot of games, it’s probably that they are really just running the business through eBay. And it’s a much cheaper business to run than a Software Etc. or even an Amazon. No retail space to rent. No employees to pay. No advertising. Presumably no taxes paid (even though you should have, right?, since it was an in-state transaction). The only cost is eBay fees, which are pretty low.

So this guy can make money on eBay if he sells the product at $1 over his cost. Of course he’s gonna beat the pants off the price that Software Etc. charges.