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spongiemaster
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- Dec 12, 2019
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Supply and availability are not interchangeable terms. I doubt there is a huge national supply of sauerkraut juice, but you will never have a problem finding it at any grocery store, because they all carry it, and no one wants to buy it. Low supply, high availability. Scalpers do not increase supply, they increase availability to specific parts of the buying market. So the availability of the supply is not the same as you state. The number of cards getting scooped up by scalpers can be roughly estimated by tracking sales at major auction sites. From that, we know with certainty that scalpers are not reducing retail availability remotely as much as major mining companies who are buying 100's of thousands of cards. That's where tangible reductions in the retail supply chains are occurring. Newegg says they get around 100,000 entries every day for their shuffle. If Amazon gets 50 cards of a certain model and you're competing in a free for all with 100,000 people/bots to get a card in your cart and checkout, you have no realistic chance of getting one. Forget 5-15%, it wouldn't matter if scalpers land 50% of those, it would not alter your chances of getting a card by any meaningful amount. You were never going to get one anyway. However, the 25 cards scalpers bought, will go up on auction at some point, and you will have the ability to bid on those. 25 cards you had no chance to buy before are now available to you if you're willing to pay the piper. Same supply, increased availability.
helper800
Judicious
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Well seeing as I was able to get 5 3000 series cards at or close to MSRP through various means I would have to disagree that scalpers are only a drop in the bucket. 3 of them were from EVGA's waitlist. A 3080 ftw that I got early for myself, and a 3080 black that I sold at cost to a friend, and a 3090 ftw that I sold to another friend at cost. Later on I got a Gigabyte Aorous Elite 3060 ti from microcenter for 500 that I gifted to my best friend for his birthday. And most recently a 3070 ti I grabbed off best buy for 700 I sold at cost to my cousin. If I can get 5 cards, albeit 3 from EVGA by luck, my assumption is that the supply is close to real demand and is only being stifled by scalpers grabbing most of the retailer cards before actual end users can.
spongiemaster
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I have 4 3000 series cards myself, all at MSRP or just above. 2 from Best Buy, 2 from Newegg shuffle. I've actually won more cards on Newegg, including a couple AMD 6000 GPU's early this year, that I didn't go through with the purchase. I've been on the EVGA waitlists, never gotten anything from them. None of these are viable options if I need a card today, except the Newegg shuffle which would require a significant amount of luck, and has a very limited number of options of models on any one day. As I said, you can purchase any GPU with a significant amount of different model options at any time you want from scalpers. With any other current option, you don't have any control over when you can get a card, and your model options are extremely limited.
Of the 9 cards we have bought, 5 were by luck, my 2 shuffles, your 3 EVGA. 3 more were from Best Buy, which are no longer an option for me, because I'm not camping out for a card. The last card you got from Microcenter is not an option for most of the country, including myself, because we don't have a Microcenter anywhere close. As I said in another thread, the best way for mere mortals to purchase a GPU near MSRP is to enter the Newegg Shuffle every day if they have a card you want to purchase, you will eventually get picked. However, that requires persistence and patience, you may end up with a bundled item you don't want/need, and you have no idea when you will get picked. If you need a card immediately. Scalpers give you the only viable option. Increased availability.
And this is the problem with the entire argument as a whole. The unspoken part is that it's at the cost of reduction of availability to other specific parts of the buying market.
So, instead of offering equal availability to the members of the buying market as a whole, it's just saying "I'm taking away availability from A to offer BETTER CHANCES of availability to B (and pocketing a crapton of money in the process)."
thepersonwithaface45
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helper800
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I am not sure what you are trying to say. In any case, it seems to be irrelevant to the point I was trying to make, but I could be wrong. What are you getting at?
Someone in the market for the latest-generation graphics card is not "poor". Consumer graphics cards are a luxury item.
That's the standard definition of a luxury good:
From Cambridge University's online dictionary (dictionary.cambridge.org): "luxury goods: expensive things...which are pleasant to have but not necessary."
In a shortage situation, some people will be shut out of access to the product. That's the very definition of a shortage. Welcome to economic reality.
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Exactly so. That is the primary economic benefit of scalping: they eliminate the shortage condition, albeit at the cost of substantially higher prices. (The secondary economic benefit of scalping is the strong upstream signal they send that pricing is incorrect, but that's a different issue)
The disappointing thing here is that AMD and NVidia could solve the shortage themselves by boosting their own pricing directly. Done by them, the price required to bring demand in line with supply would be substantially lower than that charged by scalpers -- a net win for everyone ... except the scalpers, of course. They don't do that for fear of being accused of profiteering from the Covid crisis; the shame is that this supposedly "noble" restraint on their part is actually self-serving, and detrimental to consumers.
GenericUser
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thepersonwithaface45
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"Never in the history of consumer graphics cards has the barrier to entry vs. peoples income ratio been so disparaged. "
I was just thinking about how the entire worlds economy has grown into what it is now, I mean 1/5th of all USD was printed last year. Feel like that would make prices increase along with supply chain stuff. But I also don't know any poor people that are trying to build a PC with a modern GPU, they tend to stick to consoles in my experience.
Firstly, I don't think that anyone has asked you this yet: do you engage in the conduct which you are defending? I.e. what people here would call "scalping".
Secondly, you use economics to justify your position. That implies that the field of economics has nothing to say about the issues I raised. E.g. my analogy with medicine. If you substitute "GPU" with "life-saving drug" in this context, whilst keeping the same scenario, i.e. people who don't need the product and only buy it in order to sell it at a greatly inflated price, then, is that okay? I would guess so, according to your posts here. If not, then why the different treatment of essentially the same economic activity? Couldn't you call that activity "rent-seeking"? Economics has nothing to say about this? You don't think that this activity is market distortion? Economic theory has nothing to say about this? If not, then I think that good public policy beats great economic theory any day. And it's not as if the smartest economists in the room have no instances of blundering in their beliefs, behaviour of policies.
As to the rest of your reply, I'd query some of your assumptions:
1) "This is the primary reason why price controls (either government-imposed, or, in the current instance of graphics cards, self-imposed by the manufacturer) are always harmful".
Always harmful? It seems to me excluding rent-seekers (if that's not the right word, you know what I mean, right?) would always be beneficial. If I'm right, how much is the Nobel Prize for Economics worth?
2) "If AMD , NVidia, and their AIB partners raised prices to reflect market reality, the price required to eliminate shortages and scalping would be significantly less than the price scalpers are able to demand".
They aren't? I would have thought it was not only fair but smart to increase their prices if, e.g. shipping costs have increased down the chain. I don't follow this topic closely but I would assume that that's what intelligent companies do. So, if the retail price has increased to account for higher shipping costs, then that is nothing to complain about on these boards, unless profiteering is involved.
3) " If scalpers resell 100% of the total supply, they're only able to charge FMV, not more".
I dunno about that. It's not logically impossible for that to be false. In fact, given the current circumstances, it would seem to be false. I.e. more buyers for the product than there is product. In that equation, the range would be "between what you can get away with in your wildest dreams and profiteering".
You also didn't comment on the issue of bots. That makes the market unfair, in my view, when they are used by speculators. If everybody had bots that would be a fair market.
Another suggested remedy
* You buy what you need. If you are found to have engaged in speculative activity, via KYC measures, ideally, then you would be sanctioned such that any windfall you made would be wiped out and furthermore, you would be economically penalised for the behaviour.
that should be obvious, the way he keeps defending scalping so adamantly, is proof of that, why else would he defend it so much ? cause he is a scalper himself, look at all of his replies in this thread. " That is the primary economic benefit of scalping: they eliminate the shortage condition, albeit at the cost of substantially higher prices " which is 100% BS. it doesnt eliminate it, it contributes to it, all while instead of making the card some what affordable at store prices, makes it only afordable to the rich, or those with more money then brains. N O one i know would pay the prices the scalpers are charging for any rtx 3000 or radeon 6000 series cards, as they are nothing more then a rip off. as such they are just waiting for the cards to be instock in the stores, and prices to start to drop, which sadly may not be until the rtx 4000 and radeon 7000 cards are out.
To correct you, posters here ask me that every time these threads arise. Before answering, I'll note that your posing of the question -- as well as the following poster's response -- is an example of one of the most blatant and simplistic of logical fallacies. Rational individuals judge an argument on its own merits, rather than attempt to impugn one of its proponents character.
Your question deserves no answer, but I will give you one anyway. No. I defend the activity for the same reason I defend IP property rights, crypto miners' right to exist, corporations' right to set their own prices, and other basic tenets of free-market activity. There is a rising tide of ignorance in the US that threatens the imposition of the same failed economic policies that led to lives of misery for countless hundreds of millions of individuals. Having grown up on the former Soviet Union, I have first-hand experience with these policies, and the lines of thinking you believe are so "new" and "progressive".
I segmented the argument to luxury goods in an attempt to remove some of the emotion from the debate. However, there are those here who are as emotional over their graphics cards as they are for life-saving drugs, so that attempt failed.
Economics has a great deal to say on all issues, even on medications. The argument here is slightly more involved, however, so before answering I will ask you a question. Two, actually, both of which will aid your understanding.
- If life-saving drug is being scalped, then a shortage exists, and thus some people will get the drug and live, whereas others will not, and die. Given the power, how would you choose who dies?
- Many thousands of such drugs exist today and, in most areas, they can be bought and resold for any price the seller wishes, yet are not being scalped. Why do you believe that is?
Now you're being intentionally deceptive.
You can't call all luxury items by hiding behind the definition of "pleasant but not necessary" and say "therefore, I can treat a GPU as equal to a Ferarri" - that's a load of crap, and you know it.
By that definition, even some limited form of malnutrition is acceptable, because fully avoiding malnutrition is not necessary. It may make your health worse, and shorten your lifespan, but it's merely "pleasant to have, but not necessary."
You weren't talking about shortages overall . . you are still dancing around the fact that you're trying to sell BS. You are saying that a system that shuts out those on the lower end of the economic scale, and creates an exclusive benefit for those at the higher end is a BETTER system for availability.
You are arguing that less availability for those on the lower end of the spectrum, as the price for greater availability on the higher end of the spectrum, is better.
That is false. You were being intellectually dishonest by saying that scalping increases availability.
Scalping only increases availability for the privileged, at the expense of those not so privileged. You are arguing for an inverted Robin Hood.
You are preaching both worship and sacrifice on the altar of Mammon, but you're desperate to paint it as virtue.
helper800
Judicious
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There is no rationale behind it. The science of wear and tear on electronics is clear, more use equals more wear which in turn equals more of all potential factors that can render a device inoperable. This is not to say you cannot make something that will last a substantial amount of time past its expected viable use. For instance, there are many lightbulbs that have been in use continuously for over a hundred years, which is well past the life expectancy of 2-5 years.
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