They let him keep the money he'd made so far. Obviously he didn't do anything wrong, but he clearly wasn't going to be able to take on Apple in court. (Yes, this is stupid.)

More like a dick move by him not telling them they could just get a new iPod.

It could also be construed as an arbitrage opportunity vis-a-via the time value of money.

Obviously some parties to the transaction might be unaware that their device is still under warranty, but the OP is providing a valuable service allowing them to liquidate their broken iPod into immediate cash and avoiding the risk that the warranty might be void, as well as the delay between sending and receiving the repaired unit.

The OP didn't force the people to put their broken iPod on ebay, he's merely taking advantage of an existing offer.

I doubt many people would take the deal rather than get a new iPod if they knew all the facts.

Since the OP did not write about his interactions with these sellers it is hard to know if he did or did not inform them. But I don't believe the OP was obligated in any way to tell everyone about Apple's warranty terms... so I don't think not telling them was a "dick move". I can also think of plenty of reasons why a person might know all those facts and still choose to sell the broken, still-in-warranty iPod. One of them being that you don't get a new iPod... you get a refurbished iPod and some people just don't want someone else's used stuff. Other people may have already upgraded to a new/different model and no longer need the broken one replaced.

"Other people may have already upgraded to a new/different model and no longer need the broken one replaced."

That was usually the case. People often felt they were due for an upgrade anyway and wanted to simply part ways rather than dealing with the warranty process.

I would gladly sell something under warranty rather than go through the pain of having to deal with a corporate. It is not a cost free transaction to complete a warranty claim, as our own time should be valued, and not all of us are that organised.

I did something similar with a MacBook Air after I broke its screen. I purchased a new MBA immediately, and eventually sold the old MBA to the repairer.

Most money in the world is made by exploiting knowledge of facts that others don't have. See: "trade secrets."

Exactly!

Efficient market hypothesis virtually demands this and instructs us that economies should be run by the free market because by acting on the information via the market we disseminate information about the supply/demand of goods and their alternative uses. By buying iPods under warranty he puts upwards pressure on price, disseminating information that an iPod under warranty is more valuable.

Sorry OP, just replying here so one of your commenters sees it:

schraeds, you've been hellbanned for the last 30 days, just FYI. I see you trying to post twice, but every comment you've made for the last 30 days has been auto-dead.

I honestly cannot figure out why, unless you deleted an atrocious violation of the rules or spam. Your last comment that wasn't auto-dead was about the "hippy generation", so maybe someone took offense with that?

http://news.ycombinator.com/threads?id=schraeds (turn showdead on)

Agreed. Huge dick move on behalf of Apple. If in fact the warranty was/is "transferable" (haven't read it myself) than you weren't doing anything wrong. Should have kept the business going.

how do you know it was a bad deal?

he was paying something for that broken ipod. those people would have to pay shipping and then sell their refurbished ipod, also at a loss since they do not have the volume he had to make a profit from used eletronic sales (last time you were able to sell a used consumer camera at a good price on craigslist?)

in the end, the profit for both parties may have been the same.