News Study Reveals $5.88 Million in Ryzen 5000 CPU Scalping Sales

[Admin]

Latest market analysis gives us an insight on the situation of the Ryzen 5000 CPU scalping over on eBay.

Study Reveals $5.88 Million in Ryzen 5000 CPU Scalping Sales : Read more

 

[mossberg]

Really wish there was a way to punish these people. Scalpers are scum.

 

[GregoryDude]

I agree! The best punishment would be to not purchase from scalpers and then let them get stuck with too much stock and have to sell at a loss.

Sadly, human nature for consumers to "have it now" and other tendencies will continue to fuel scalpers.

 

[JamesJones44]

AMD should put requirements on their vendors to better control this situation. There is no reason AMD can't request their channel partners stick to one CPU per customer until they can keep up with demand, quality channel partners like Newegg, Amazon, Bestbuy, etc. do requests for other vendors (like what Sony and MS have done with PS5 and Xbox). Does it work flawlessly? No, but I know plenty of people who were able to get PS5's and XSX/XSS in the given stock windows provided by those channel partners offering only 1 per customer. With the Zen3 release you are basically screwed unless you are there the exact moment a notification comes in, otherwise Joe Scalper is buying the whole lot.

 

[Endymio]

AMD should put requirements on their vendors to better control this situation.

I find it truly amazing that people absolutely refuse to learn from history. There's only one way to solve a shortage -- raise the price. Nothing else works. Let me repeat that again for all the thick skulls out there: Nothing. Else. Works.

If AMD would raise the MSRP on a temporary basis, there would be no margin for these scalpers, and no demand. They would have to raise it far less than what the scalpers are actually charging, and the extra profit they would thus make would also allow them to increase supply as well, if only slightly.

 

[PapaCrazy]

I find it truly amazing that people absolutely refuse to learn from history. There's only one way to solve a shortage -- raise the price. Nothing else works. Let me repeat that again for all the thick skulls out there: Nothing. Else. Works.

There's only one way to fix a leaky boat -- drain the ocean. Nothing else works. Let me repeat that again for all the thick skills out there: Nothing. Else. Works.

 

[InvalidError]

Really wish there was a way to punish these people. Scalpers are scum.

It is only a few thousand chips, a few hundred wafers out of tens of thousand per month, only a few percent of total sales at most. Even if you successfully ended all scalping, availability would still be practically every bit as horrible overall.

I find it truly amazing that people absolutely refuse to learn from history. There's only one way to solve a shortage -- raise the price.

Ramping up production works too, only problem is that it takes about two years to bring new fab capacity online when all existing capacity is already booked.

 

[Endymio]

Ramping up production works too, only problem is that it takes about two years to bring new fab capacity online when all existing capacity is already booked.

True. And higher prices are the market signal to increase supply.

And while new fabs do take years, even in the short term, higher prices can increase supply, by allowing manufacturers to run just a little more closely to full 100% capacity.

 

[JamesJones44]

If AMD would raise the MSRP on a temporary basis, there would be no margin for these scalpers, and no demand. They would have to raise it far less than what the scalpers are actually charging, and the extra profit they would thus make would also allow them to increase supply as well, if only slightly.

I agree AMD is completely misguided for leaving all of that money on the table, clearly they could have charged more. However, I don't agree with nothing else works, the PS5 from BestBuy and XSX from Walmart in my living room beg to differ that other solutions don't work.

 

[Endymio]

However, I don't agree with nothing else works, the PS5 from BestBuy and XSX from Walmart in my living room beg to differ that other solutions don't work.

A supply shortage doesn't mean that absolutely no one gets product. It simply means that supply doesn't equal demand.

 

[InvalidError]

And while new fabs do take years, even in the short term, higher prices can increase supply, by allowing manufacturers to run just a little more closely to full 100% capacity.

Most of the major players have been operating at max capacity for the last couple of years, there isn't much extra capacity left under the couches unless they discover ways to reduce the number of manufacturing steps with minor modifications to the equipment they already have.

 

[Deleted member 1560910]

Really wish there was a way to punish these people. Scalpers are scum.

why ? There are just people trying make a living

 

[LB23]

I find it truly amazing that people absolutely refuse to learn from history. There's only one way to solve a shortage -- raise the price. Nothing else works. Let me repeat that again for all the thick skulls out there: Nothing. Else. Works.

If AMD would raise the MSRP on a temporary basis, there would be no margin for these scalpers, and no demand. They would have to raise it far less than what the scalpers are actually charging, and the extra profit they would thus make would also allow them to increase supply as well, if only slightly.

Clearly I must be "thick skulled" as I don't see how raising MSRP would stop or even slow scalpers. We are talking about companies that are only made for scalping using bots to buy full inventories now not Joe Shmoe using his savings to make a couple bucks. If there is demand for the double or even triple priced scalped cards now it shows some people will pay anything. So raising the MSRP will just make the scalpers charge double or even triple the new MSRP and make MORE profit.
As long as the retailers are not truly doing anything to block scalpers the only way to stop scalping is to have a supply that can overwhelm how much the scalpers can afford to keep the market dry. Now that we have companies that are built just for scalping and have large amounts of money they can suck up all the cards and consoles as long as the supply only trickles in. Dropping 100 cards a week isn't going to do it.

 

[InvalidError]

Clearly I must be "thick skulled" as I don't see how raising MSRP would stop or even slow scalpers.

Simple supply-and-demand economics: higher retail price means fewer people can afford or justify the expense even at MSRP, which makes it that much harder for scalpers to re-sell whatever units they manage to get since the MSRP is already above most of their potential customers' pain threshold. Reduced demand from high prices also means more units staying in stock longer, also raising the difficulty scalpers will have re-selling their goods above MSRP.

It won't help you get a GPU if you cannot afford the higher MSRPs but it will achieve the goal of keeping units on store shelves so people who want 'em bad enough can get 'em.

 

[TerryLaze]

Simple supply-and-demand economics: higher retail price means fewer people can afford or justify the expense even at MSRP, which makes it that much harder for scalpers to re-sell whatever units they manage to get since the MSRP is already above most of their potential customers' pain threshold. Reduced demand from high prices also means more units staying in stock longer, also raising the difficulty scalpers will have re-selling their goods above MSRP.

It won't help you get a GPU if you cannot afford the higher MSRPs but it will achieve the goal of keeping units on store shelves so people who want 'em bad enough can get 'em.

Yeah but that would reduce the sales of a company by a huge amount for that whole duration costing them a whole lot of money.
Reducing demand is the last thing a company wants.
It would cure the headache by cutting off the head.

 

[Endymio]

Most of the major players have been operating at max capacity for the last couple of years, there isn't much extra capacity left under the couches

Yes, but "max capacity" is a slightly elastic term. In a normal situation, if a $100M pattern aligner or other critical piece of equipment breaks down, you call the repairman. When prices are higher, you hire a repair team on duty 24x7, standing by. When prices are even higher, you buy an extra, unused aligner, positioned to take over at a moment's notice.

For process-constrained manufacturing (rather than labor-constrained) such incremental gains are admittedly minor. But they do exist, and, as basic economics predicts, as prices rise, so do their marginal utility.

 

[Endymio]

Yeah but that would reduce the sales of a company by a huge amount for that whole duration costing them a whole lot of money.

No. A shortage by definition implies demand exceeds supply. If a company raises prices to the point that demand exactly equals the number of units they're capable of producing, then their sales don't drop by even a single widget, and there is no shortage.

Furthermore, because scalpers have overhead and marginal costs beyond the manufacturers', such a price increase can be considerably smaller than the "scalper markup" and still balance supply and demand.

 

[TerryLaze]

If a company raises prices to the point that demand exactly equals the number of units they're capable of producing, then their sales don't drop by even a single widget, and there is no shortage.

It's impossible for us to come up with this number...
This number could be the added $50 plus no cooler.
It could also be the hundreds of dollars more that the scalpers ask for or it could be somewhere in-between.

But in general increasing MSRP creates less favorable reviews that lead to less sales.

 

[Endymio]

It's impossible for us to come up with this number [that exactly balances demand]

Business major graduates spend a great deal of time learning how to do this. It's never perfect of course, but with iterative feedback they can get astonishingly close.

In general increasing MSRP creates less favorable reviews that lead to less sales.

The entire point of a supply shortfall is that you can decrease demand without decreasing sales. If you can only produce 1000 widgets a day and higher prices means that, instead of 2000 people trying to buy, only 1200 do, then you've nearly balanced demand, and you haven't decreased sales at all. You've simply increased revenue, and profitability. This is really a very basic concept, and shouldn't be difficult to understand.

As for the "less favorabke reviews", those evaporate pretty much instantly when a price cut comes along. Or a manufacturer could head it off entirely by leaving the official published MSRP unchanged, and simply charging a short-term "shortage surcharge", set to expire at a given time. That would be the best of all possible worlds for us the consumer -- but manufacturers won't do it, because a herd of ignorant dolts on social media would instantly accuse them of "profiteering from the crisis". So instead, we struggle with scalpers, and even higher average prices.

Finally, I point out that unrealistically low prices that lead to shortages also cause unfavorable reviews, through endemic unavailability and unhappiness with scalping -- as seen in this very thread.

(edit: clarity)

 

[InvalidError]

But in general increasing MSRP creates less favorable reviews that lead to less sales.

If there is a SHORTAGE then by definition, sales = 100% and you aren't losing any sales from raising prices until you raised prices enough for sales to become less than 100% no matter how many people throw hissy fits about it - I'm PO'd about decent ~$200 GPUs being effectively nonexistent but I understand the reality that market forces won't allow those to exist in any meaningful capacity for the foreseeable future.

Reviewers may not like it but that is moot when you cannot keep stock on shelves and the prices are up from manufacturer, retailer and scalper markups anyway.

 

[TerryLaze]

If there is a SHORTAGE then by definition, sales = 100%

But there is no shortage of CPUs...



only a shortage of AMD CPUs.

Increasing MSRP will drive more people to intel than having scalpers inflate the prices the former would be directly caused by AMD while the latter is not directly AMD's fault.

 

[InvalidError]

But there is no shortage of CPUs...

only a shortage of AMD CPUs.

Increasing MSRP will drive more people to intel than having scalpers inflate the prices the former would be directly caused by AMD while the latter is not directly AMD's fault.

If there is a shortage of AMD CPUs, people will be driven toward Intel anyway since they cannot get AMD CPUs regardless of what AMD's MSRPs are. That's what an actual shortage is - people are struggling to get a product regardless of the price they are willing to pay.

 

[mossberg]

why ? There are just people trying make a living

And I say to them, get a real job. Frankly, I think scalping hardware should be illegal, just like ticket scalping is.

 

[Endymio]

And I say to them, get a real job. Frankly, I think scalping hardware should be illegal, just like ticket scalping is.

Guess what? Illegal or not, you still still buy scalped tickets in front of every venue in the country.

 

[Deleted member 1560910]

And I say to them, get a real job. Frankly, I think scalping hardware should be illegal, just like ticket scalping is.

I dont see anything wrong with. You can still buy tickets and sell at higher prices using other means you cant sit in front of the stadium and sell but you can at home. This isnt toilet paper its just business. Honestly people should of saw this coming last match when covid was hitting bad. Did you honestly think GPU and other parts were not going to become harder to get hence why i built a brand new machine right before lock down but i digress. There is nothing against the law if i want to buy 5 gpu and then sell them at a mark up. Its called being smart buy for one sell for 2. Salon businesses do this all the time with there products also Plumbers do that as well and grocery stores buy for 1 sell for 2. GPUs are a not a essential item