Will scalpers get away with it?

[Edgar R. Zakarian]

So they bought Graphics cards at MSRP or around there. 
They've been selling it at really high price, with the only risk of having to lose money, if stock became available and prices fell, so nobody would buy from them anymore, while they have a huge stockpile.

 

Now, since the new tarifs increasing GPU prices and covid still going on, their prices (or at least higher than MSRP prices) will become the new normal? -  So they have a win-win situation?

[SlashedM]

2 minutes ago, Edgar R. Zakarian said:

So they have a win-win situation?

They essentially do, and I wouldn't be surprise if they rise their prices until more stock comes in either way.

 

[starry]

theyll just raise their prices even more as long as they can keep supply down

[chnapo]

9 minutes ago, Edgar R. Zakarian said:

So they bought Graphics cards at MSRP or around there. 
They've been selling it at really high price, with the only risk of having to lose money, if stock became available and prices fell, so nobody would buy from them anymore, while they have a huge stockpile.

 

Now, since the new tarifs increasing GPU prices and covid still going on, their prices (or at least higher than MSRP prices) will become the new normal? -  So they have a win-win situation?

We had similar situation with the first mining boom. At the time, RX 580 was worth 400-600 eur as far as I remember. So like, not scalpers but people were selling GPUs way above their value (2x MSRP and more) because of a high demand. After the boom has ended, it took a while for the prices to drop (many buyers genuinely thought they bought GPUs at their value and that they will get their money back) but half year later it was not a problem to get RX 580 for around 100 eur.

Nowadays we have:
- Covid = more gaming, more interest in gaming hardware
- New generations of GPUs = I think changing the manufacturing to the new model definitely hurts the yields for some time
- New generations of GPUs = people are upgrading
- Christmas (recently) = high demand for all things incl. GPUs, especially in combination with covid
- Mining boom = miners are buying all GPUs that can mine (even old RX 580 8GB doubled its price on used market in one week!)
- Scalpers = buying all that is possible just to resell it

What we are going to see in my opinion is:
- Manufacturing speeds will go up to meet the demand

- People who wanted to upgrade or get a new GPU will already have one
- Christmas time is over
- Covid will hopefully go down and people will be less interested in gaming again. Many will try to sell their hardware.
- BTC may get cheaper again (or mining less profitable) and miners will stop buying + sell their current GPUs

Scalpers may be in for a bad time if all of this happens. If mining remains a thing though, it can save scalpers. I would say that mining is now the main reason scalpers are still earning money. If only mining went down, scalpers would be ducked.

My point is, prices went down once, they will go down again. Although something remains - GPUs went more expensive by a tier since RTX 2000 series.

[Arrogath]

The only way scalpers lose is if they hold stock too long and it becomes too difficult to buy up enough of it to limit supply. Normally physical locations could help alleviate the scalper problem somewhat by limiting hardware sales and being a slower moving inventory channel.

 

Now, scalpers of the 6900xt 3rd party cards don’t seem to be doing well in my area. Guy that bought a card out from under me is still trying to flip it while I’ve already got my own through standard retail channels. Like the 3090 there’s limited interest in the halo products, too expensive for most of us so stock is available somewhat more often.

[straight_stewie]

35 minutes ago, Edgar R. Zakarian said:

Will scalpers get away with it?

I don't know much about property law in Denmark.

But, at least in the US, yes. They will definitely get away with it. They bought the property legally, and because it's not a restricted item (such as a firearm, tobacco, alcohol...) can now sell it legally.

Now there is some argument to be had that if they bought the graphics cards with the sole intent of selling them for profit (which I'm sure that anyone falling under the definition of "scalper" did), then they would actually be running a retail business then they should be paying atleast income tax on the gross amount of sales to the IRS. Depending on their state, they might also have to be paying sales tax, state income tax, or be entirely illegal (not every state allows you to do that from your own home with or without a business license). Additionally, not every city allows you to run a warehouse (which is what it is, even if very small) out of your private property, but that depends on many things.

Like, for example, if I were to be a graphics card scalper in my city in Mississippi, I could legally do it from my house, provided that I stored the units entirely in one of the buildings that appears on the deed to the property, that I did not generate any excess amount of vehicle traffic, that none of the buyers were visiting my house, that I paid my federal income tax(es) on the income, that I paid state income tax on the income, that I remitted sales tax to the state (unless collected for me by, i.e. Amazon), that the total volume of products moved stayed below $5,000,000 USD per year for that concern (a restriction that applies only to consumer product retailers operating a home occupation out of their homes), that only people in my immediate family living on this property did any work for the concern, that I didn't give anyone (including friends living anywhere and family not living at this property) "tours" of the operation, and that I remembered to always call it a "home occupation".

I know these things (for my state and city) because I run a reasonably large cricket farming operation out of my house. I'll refrain from posting the name of the LLC that I hold the concern under, so as not to dox myself.

[aisle9]

21 minutes ago, Edgar R. Zakarian said:

So they bought Graphics cards at MSRP or around there. 
They've been selling it at really high price, with the only risk of having to lose money, if stock became available and prices fell, so nobody would buy from them anymore, while they have a huge stockpile.

 

Now, since the new tarifs increasing GPU prices and covid still going on, their prices (or at least higher than MSRP prices) will become the new normal? -  So they have a win-win situation?

There's nothing to "get away with". It's called the free market. Is it fair? Yes. You have as much chance at those cards as resellers do. If retailers implicitly allow them to use bots by way of not blocking or banning them, then bots are fair game, and you're free to use a bot or a script too. And if you buy a card and realize that someone else out there is dumb enough to pay twice what you did for it, you're free to resell it as soon as it arrives. Or before, in a lot of cases, where some dipshit is literally paying hundreds of dollars for first dibs on a card that may or may not ever be handed to them.

 

So yes, it is sort of win-win for them. Prices north of MSRP will become normal even straight from retailers, which means they're just this side of guaranteed not to lose money on cards purchased at the original MSRP. At some point, inventory will (theoretically) catch up, and their demand will come down. Of course, if that happens, a lot of them would either sell the cards to miners or start mining themselves to recoup value. The only possible legal pitfall would be with the IRS, but you'd have to sell a lot of cards to land on the IRS' radar.

 

So basically, no, there is no penalty for freely using the free market to make money.

[NineEyeRon]

Well they have been doing since the invention of money, if we have not been able to stop them in over a thousand years then I don’t think we will any time soon.

[Edgar R. Zakarian]

But what's the manufacturer's incentive (AMD / NVIDIA) to produce up for the demand? Aren't they in a perfect position atm.? 

They sell more than they have any other yeah (ANYTHING they produce gets taken like hotcakes at FAR higher prices). Basically like monopoly. 
So what's to press them to increase supply even more, other than their own greed? 

Competition between the two?

[airborne spoon]

On 1/11/2021 at 10:09 AM, straight_stewie said:

I know these things (for my state and city) because I run a reasonably large cricket farming operation out of my house. I'll refrain from posting the name of the LLC that I hold the concern under, so as not to dox myself.

the fuck? a cricket farm, that's a thing? i just get my fishing crickets from out in a field. you have a cricket farm at your house that's too many bugs too close to the bedroom

[straight_stewie]

6 minutes ago, airborne spoon said:

the fuck? a cricket farm, that's a thing? i just get my fishing crickets from out in a field. you have a cricket farm at your house that's too many bugs too close to the bedroom

It's in a detached garage and generates me enough revenue at a high enough margin and low enough workload to be worthwhile. I could quit my day job if I wanted to, but whatever: A day job gives me an opportunity to get out of the house.

https://www.globenewswire.com/news-release/2019/04/01/1790970/0/en/7-95-Billion-Edible-Insects-Market-Global-Forecast-to-2030.html#:~:text=Also%2C in terms of volume,reach 732%2C684.1 tonnes by 2030.&text=Based on insect type%2C crickets,market during the forecast period.

Most people just go to their local baitshop or grocery store to buy fishing/pet feeding crickets. Human consumption is also increasing across the world, and has been popular in Asian countries since time began basically.

[Donut417]

8 hours ago, Edgar R. Zakarian said:

But what's the manufacturer's incentive (AMD / NVIDIA) to produce up for the demand? Aren't they in a perfect position atm.? 

Well to be honest they couldnt product more even if they wanted. Both AMD and Nvidia are Fabless. Meaning they dont product their own chips. I know TSMC does AMD and Apple for that matter. I cant recall if Nvidia also use TSMC or they use Samsung. Either way TSMC produces a large amount of chips for many companies and it only has so much manufacturing capacity.