[SOLVED] Who's reaping the profit?

[ManOfArc]

I suppose this question has been asked here a thousand times, so please excuse me if I ask it again. With graphic cards selling at near double their MSRP (at time of launch), who is reaping all the extra profit? The retailer, the shipper, the local government, the manufacturer, the chip maker? All the above? I'm just curious where my money is going when I buy a card these days. Thank you.

PS: I suppose this question would pertain to all chip-based electronics.

 

[Wolfshadw]

The seller or coughcough* "retailer" is making all the profit.

-Wolf sends

 

[USAFRet]

I suppose this question has been asked here a thousand times, so please excuse me if I ask it again. With graphic cards selling at near double their MSRP (at time of launch), who is reaping all the extra profit? The retailer, the shipper, the local government, the manufacturer, the chip maker? All the above? I'm just curious where my money is going when I buy a card these days. Thank you.

PS: I suppose this question would pertain to all chip-based electronics.

The scalper, mostly.

ex.
MSRP = $200
The retailer sells it to the scalper for $220.
The scalper sells it to the gamer who cannot wait for $400.

YOU acn't get it for $220, because the scalper has an army of bots to buy up the whole stock before you can.

 

[ManOfArc]

The scalper, mostly.

ex.
MSRP = $200
The retailer sells it to the scalper for $220.
The scalper sells it to the gamer who cannot wait for $400.

YOU acn't get it for $220, because the scalper has an army of bots to buy up the whole stock before you can.

The online retailers like the EGG buy from these scalpers? Can't they get the card manufacturers to not sell to scalpers; sell directly to legit retailers? The card manufacturers wouldn't be getting any of that grift if I understand you correctly. What would be in it for them by selling to scalpers?

 

[USAFRet]

By "EGG" you mean Newegg?

They get them for whatever price from the manufacturer.
In batches of hundreds or thousands.
At some agreed upon contractual price.
Maybe $125 each.
MSRP = $200.
Newegg lists them for $220, to cover the Newegg shipping and overhead.

They sell them. As in the above numbers, $220.
The scalpers and their bot army sucks up the whole inventory, before you can get to it.

The scalpers then sell them at whatever price they will command.
$400.
Often, selling as a 3rd party on the Newegg platform.

 

[Amddefector]

If you see any retailer selling for double msrp then the retailer is reaping all the profits! If people didn't pay the ridiculous prices the scalpers are selling them for they would be forced to lower the price or sit on several grands worth of gpus they can't sell. Then factor in the manufacturers that say there's a shortage on silicon and stocks are low then 1000s of these cards show up in mining rigs all over the place meanwhile the consumer can't find one for <Mod Edit>

 

[USAFRet]

If you see any retailer selling for double msrp then the retailer is reaping all the profits! If people didn't pay the ridiculous prices the scalpers are selling them for they would be forced to lower the price or sit on several grands worth of gpus they can't sell. Then factor in the manufacturers that say there's a shortage on silicon and stocks are low then 1000s of these cards show up in mining rigs all over the place meanwhile the consumer can't find one for <Mod Edit>

Just because it is sold via Newegg does not mean Newegg is reaping these "profits".
3rd parts sellers on the Newegg platform are.

 

[alceryes]

I suppose this question has been asked here a thousand times, so please excuse me if I ask it again. With graphic cards selling at near double their MSRP (at time of launch), who is reaping all the extra profit? The retailer, the shipper, the local government, the manufacturer, the chip maker? All the above? I'm just curious where my money is going when I buy a card these days. Thank you.

PS: I suppose this question would pertain to all chip-based electronics.

Don't forget the actual manufacturers like AMD, NVIDIA, and all the AIBs! They are making money hand over fist in this market.

Setting an MSRP is a murky business at best. Remember the last great deal, the FE RTX 3080 at $699? At THAT price, NVIDIA was making a nice profit. All subsequent GPU releases now have the corrected 'ludicrous MSRP'. The 3080 Ti, who's performance is roughly 12-13% higher than the RTX 3080, has an MSRP that is 42% higher! Although supply woes, etc., etc. are definitely biting into NVIDIA's profits a small amount, the FE 3080 Ti doesn't cost 42% more to make than the FE RTX 3080 - not even close. Where's the difference going you ask?? Right to these mfgs. bottom lines, where they've seen record revenues the past four quarters. Remember, MSRP is the base price. That price gets multiplied by X amount by resellers and scalpers to come up with the current ludicrous price.

 

[ManOfArc]

You guys make excellent points. I tend to think that every single person along the way that handles the cards, is pocketing some of that grift. By the time the cards get to the end user, we've all helped a little to promote their thievery.

Or, if you're a true Capitalist, you might just chauk it up to "supply and demand"... and smile.

 

[Amddefector]

Just because it is sold via Newegg does not mean Newegg is reaping these "profits".
3rd parts sellers on the Newegg platform are.

I've seen more than one retailer selling the cards well over the msrp and they don't sell 3rd party. And not just the latest editions. I've just seen one asking nearly £500 for a 1660s. Before all this I payed less than that for a 2060s. I brought my kid a 1660s for around £250 a couple of years ago.

 

[USAFRet]

I've seen more than one retailer selling the cards well over the msrp and they don't sell 3rd party. And not just the latest editions. I've just seen one asking nearly £500 for a 1660s. Before all this I payed less than that for a 2060s. I brought my kid a 1660s for around £250 a couple of years ago.

Yes, some retailers do this as well.