Ya'll need to understand fundamental Supply and Demand

[tikker]

4 hours ago, Jay427 said:

Know your enemy, put in the work.  I got a card the first day, the processor took 4.  If I can do all this while having a spine injury, not willing to camp for 1 day when you're healthy (potentially vaccinated now) and with a store that does not sell to customers unless they are present at the store (Sorry to those where this may not be an option for them) is just lazy.  I've had young and healthy new hires tell me similar excuses when they couldn't run 80% production when I ran over 100% for years with a severe tear in my hip joint, and it felt like going home with a broken bone every day.  Yes I have broken bones, I know what it feels like.  If you want something, then earn it.  I was proud to be a list master because everyone got a card that day, but I can't always be the list master - others need to step up and take responsibility too, or it won't change.

I'm sorry, but 1) your health issues give you no right or knowledge to judge other people's work capacity (especially new recruits) and your spine injury doesn't give you any status or badassness for obtaining a GPU "despite" that 2) saying people are lazy for not literally camping in front of a store for days is a bit ridiculous. You say it's poor management, I say if there's truly a list with who's next in line to prevent cheating, then it's literally just a preorder and it should just be treated like one. Your name gets put on the list, people get notified about stock in list order. If the store doesn't take preorders that sucks (but if they keep a list they clearly do and have a dumb policy), but that still doesn't make people lazy for not camping.

4 hours ago, Jay427 said:

How do I keep everyone safe when 50+ people wanted to wait in line in the dead of a northern winter? <snip. recordings protected and ensured everyone's position the list was on display at all times for all parties who waited

By doing the sensible thing of getting your preorders in order and sending them home? You literally have the list. If you have this list there is no reaon people should camp out 4 days to pick up their GPU when they can just as well wait at home until you get your stock. This is becoming a status symbol almost "look at me I waited 4 days in my car in front of Best Buy to get this bad boy!" while it can just as easily be "I waited 4 days in the comfort of my home doing other stuff I needed to do before I got my notification".

[Riccardo Cagnasso]

On 6/6/2021 at 11:07 AM, Amias said:

How Does the Law of Supply and Demand Affect Prices?

 

 

Demand is increasing. Supply is not.

 

People are not price gouging, scalping or ripping anyone off. This is core, basic economics at play.

 

Supply of many very complex goods, requires expensive complex manufacturing and supply chain management. On razor thin margins, any misstep can result in bankruptcy, so supply is balanced carefully to not exceed the demand. When the demand increases significantly in a short period, the resulting impact to supply is slow and takes time. Meanwhile natural price increases occur. If this doesn't happen at the supplier end of the chain, and only within the middlemen (distributers), then the suppliers can't expand production rates.

 

Costs are going up people, and we should be grateful when the suppliers reflect the demand. Not the middlemen. That allows them the margin to increase supply so they can eventually build up production capacity to meet the demand. 

 

We all know the recent new product announcement and outrage OUTRAGE at the price. I'm sorry but if they don't increase the price substantially, we'll never see supply start to meet the demand and our high end hobbies will die out. I'm extremely disappointed at the outrage perpetuated by many leading tech journalists that can't see the market for what it is and understand basic economics. Maybe they're isolated from the sheer frustration of the actual consumers due to getting overloaded with review samples and first dips on products 99% of people can't touch. Maybe they're not doing their job properly. Maybe they need to do their job properly and report on the current market fairly and educate their viewers to keep expectations in check.

 

 

Yes, the fact that MSRPs are (inevitably?) rising to match the supply/demand is clearly a good thing.

 

Frankly, the fact that gpus producers were selling stuff at MSRPs that caused that complete imbalance between supply and demand, was dangerous to the market. I wonder if that kind of price fixing should be illegal.

If GPUs prices skyrokets because availabilty, new players might try to enter the arena. The Italian manufacturer STMicroelectronics in 2001 released a quasi-competitive gpu in the lower end. They might try something like that again if they think that is profitable. Or maybe some mobile GPU manufacturer could say "hi,let's give a try". But if the MSRP is artificially kept low while, this is a lot more difficult. Doesn't really seem like a honest market practice.

[12345678]

On 6/15/2021 at 5:58 PM, 12345678 said:

what about the us that destroys crop to be able to not lower down prices?

nobody is replying to me?

 

I mean how can they even enforce such things, like farmers are forced to destroy their crop to let the prices be as they are

 

insanity

[Jay427]

1 hour ago, 12345678 said:

I mean how can they even enforce such things, like farmers are forced to destroy their crop to let the prices be as they are

 

insanity

Decomposing organic material nourishes soil for next season.

 

Allowing prices to plummet will mean more food destruction because people will wait to see how far down it will go, like it did during the depression, then there will be no food.
 

There isn't enough resources and equipment in distribution centers to redistribute or preserve food because it was processed under different expectations of food service, which have already been doing double mandatory overtime for over two years (I work in distribution).  Example being using salt and cans to preserve food - you need to double raw material supply (millions upon millions of pounds), manufacturing capabilities, and storage capacity for buildings that take multiple years to construct.  Combine this with a labor shortage because people are getting more money to stay home than to work at a factory, and you have about 2 weeks until the food you're trying to store expires and becomes poisonous to consume.

 

Domino effect.  Politicians living in an ivory tower their whole lives have never walked in a warehouse or factory floor enough to see the big picture, which is why all that food got destroyed.  Warehouse workers in some companies have been working 70 hours a week for multiple years now, expecting anything more from them at this point would just be cruel.

[12345678]

48 minutes ago, Jay427 said:

Decomposing organic material nourishes soil for next season.

 

Allowing prices to plummet will mean more food destruction because people will wait to see how far down it will go, like it did during the depression, then there will be no food.
 

There isn't enough resources and equipment in distribution centers to redistribute or preserve food because it was processed under different expectations of food service, which have already been doing double mandatory overtime for over two years (I work in distribution).  Example being using salt and cans to preserve food - you need to double raw material supply (millions upon millions of pounds), manufacturing capabilities, and storage capacity for buildings that take multiple years to construct.  Combine this with a labor shortage because people are getting more money to stay home than to work at a factory, and you have about 2 weeks until the food you're trying to store expires and becomes poisonous to consume.

 

Domino effect.  Politicians living in an ivory tower their whole lives have never walked in a warehouse or factory floor enough to see the big picture, which is why all that food got destroyed.  Warehouse workers in some companies have been working 70 hours a week for multiple years now, expecting anything more from them at this point would just be cruel.

I'd say that's more a political issue(like wads of money), than an infrastructure one;

 

there are different products/conservation methods that do last a while besides canned food; if the market was actually free, I doubt that manufacturers would have issues into allowing more prime matter to be worked in whatever second product

[Jay427]

47 minutes ago, 12345678 said:

I'd say that's more a political issue(like wads of money), than an infrastructure one;

 

there are different products/conservation methods that do last a while besides canned food; if the market was actually free, I doubt that manufacturers would have issues into allowing more prime matter to be worked in whatever second product

I'm sorry, I don't know what to tell you.  I worked in Logistics and distribution for over 15 years.  You can't make storage space, supplies, and labor in 2 weeks out of thin air.  It's not as simple as "repurpose this for that" when it's not designed for something or doesn't exist.

[WkdPaul]

12 hours ago, 12345678 said:

I'd say that's more a political issue(like wads of money), than an infrastructure one;

 

there are different products/conservation methods that do last a while besides canned food; if the market was actually free, I doubt that manufacturers would have issues into allowing more prime matter to be worked in whatever second product

it's not political, so please lets not make derail further, we have a no tolerance rule against politics.

 

Destroying supply isn't limited to the US, it's in other countries, but I know more about my own ; Canada.

 

Supply is tightly controlled and supply will often be destroyed to have a stable market. It might sound weird, but here it's made so that bigger farms don't strongarm smaller farm into bankrupcy. Bigger farms will have bigger financial means and can easily manipulate the market to have price of something crash, they ride the price crash and get out of it on top with less competition and a better handle on the supply.

 

Companies aren't moral, they're there to make money and don't care if they have to put people on the street to do it. Regulating them and not allowing them to do things (like over supply a specific market) is sadly something that has to be done to protect everyone, including the consumer.

[birdhuman]

let them dig. I'll just keep using my 1070 till rtx40xx. If 40xx NOK, I'll wait for 50xx.

[QuantumSingularity]

On 6/17/2021 at 10:52 PM, Riccardo Cagnasso said:

If GPUs prices skyrokets because availabilty, new players might try to enter the arena. The Italian manufacturer STMicroelectronics in 2001 released a quasi-competitive gpu in the lower end. They might try something like that again if they think that is profitable. Or maybe some mobile GPU manufacturer could say "hi,let's give a try". But if the MSRP is artificially kept low while, this is a lot more difficult. Doesn't really seem like a honest market practice.

The only "new player" we could expect realistically is intel. The development and production of a GPU now days is such an expensive and complicated process, no company outside USA/China can afford to do it. Especially none here in Europe since the EU isn't funding as well as the US is. You need few tenths of billions of dollars just to build and equip the factory itself. Then you need some good engineers for the R&D department and these are already hard to find, cause the really good ones already work for nVidia or AMD. The only companies who could afford this are either Google, Amazon or Apple. But you don't wanna any of that:

Google - makes a prototype and keeps it in developing stages for years,a couple of times changes the design (and the EULA for good measures) and all of a sudden pulls the plug of the entire project; decides to start making smart beer bottle caps instead.

Amazon would go for the cheapest chinese manufacturer possible and just rebrand it while in the meantime removing the rest of the options from their store.

And Apple - although they announced their plans for their "own" GPU, it's still an AMD based design. Even so, i'm pretty sure they'll find a way to make you pay a monthly subscription fee for "your" already VERY overpriced GPU and after the warranty runs out, all of a sudden it will become much slower than it used to be just a few days ago. Also as a must, it will work only with other Apple parts and won't be susceptible to repair.

Back in the days (20-some years ago) there were many GPU manufacturers, but there is a reason why most of them are already gone. Ati, 3Dfx, SiS, BFG, Genoa, 3D Labs, SGI, VMI, Matrox - all of those plus many more one way or another left the market, bankrupted OR were bought by AMD, Intel or nVidia, because none of them managed to keep afloat with the ever increasing complexity and expenses involved into the development of each new generation of GPUs. But it was a good time for us the gamers - the fierce and i mean really fierce competition between multiple manufacturers was sooo good for the end-consumer. I remember back in 2001 i was 14 and also able to buy a GeForce3 Ti 500 (the very high-end GPU) with pocket and lunch money i saved for about 2-3 months and some money my grandparents gave me for Christmas. It was $300. GL today buying a 3090 with lunch money collected over the period of 2-3 months and some $50 in total collected on Christmas.

[SteveiJobs]

People who try to use pure Supply and Demand as anything more than a thought exercise are missing the point in my opinion.

 

Supply and demand can't account as easily for how the market actually works (i.e. things like distribution vs direct sales, available competition, marketing, global shipping, etc).

 

For instance, there are different flavors of "demand." Certainly there are gamers out there who want a GPU for their gaming rig. There's also universities building supercomputers for AI/ML, there's miners, there's engineers who need GPU acceleration for Solidworks/AutoCAD, and of course there's bad-actor scalpers who are only buying GPUs for profit. S/D doesn't have a neat explanation for all these different market requirements.

 

Another thing that irks me is on the supply side of the equation because there is definitely a tier of consumers. The supply of GPUs goes to the biggest customer first, which usually means OEMs, supercomputers/universities, and miners simply because they have an enormous amount of buying power. Consumer cards that go to retailers are only a small fraction, and there's always the direct sales on Nvidia's website.

 

TL/DR: yea people need to understand Supply and Demand to make sense of the issue right now, but that's like saying people only need a table saw to build a piece of furniture. It'll get you pretty far but it's not the only tool you need.

[Amias]

59 minutes ago, SteveiJobs said:

It'll get you pretty far but it's not the only tool you need.

Enlighten us then.

 

Because right now S&D is describing the market exactly right.

 

Demand > Supply = Cost Increase

[Ar558a]

On 6/16/2021 at 8:13 AM, Amias said:

 

Let's say I require a high powered GPU for my job, there are many many out there, from gaming development to modelling and CAD software etc. A high powered dedicated GPU is critical to my role and without it I have no livelihood. My current GPU just burnt out and I need to complete a project by the end of the week. Every. GPU. Is. Out. Of. Stock. Except ... wait for it ... ebay!

 

Without the current 'scalping' market, I would struggle to get equipment for my career, if I had a full team ... forget about it. Everything would be sold out. Except I can go buy the card I need right now. "Scalpers" have plenty of stock at a price that is meaningless for maintaining my career and livelihood, but keeps the rabid gamers from buying 'because it's a rip off'.

 

Without that service, many many careers would be at risk.

 

Nvidia should triple the price of its cards until it can sustain supply. I'm not happy most of that money for these cards is going to bots, retails campers. I'd much prefer that money go back to the company developing the actual hardware. But if Nvidia wants to be stupid they can be. Scalping is just a symptom of poor market pricing.

I think the problem you describe is the overlap between domestic and industrial products. I understand that there will be some people who need GPUs for business and may be willing to pay significantly increased prices as it necessary for them to continue and the ROI still makes sense. I would argue that this should be limited to the commercial Quadro cards and possibly the 3090 (which isn't a gaming card and no gamer should have been paying the 100% markup for 10% performance over the 3080). 

 

GPU's may have many uses but the primary one is for Leisure in terms of PC Gaming. To triple the price of all GPU's would basically kill PC gaming overnight outside of a very small group of gamers who would be willing to pay minimum $1500 for any GPU. This would likely cause game sales to drop dramatically for any new titles that need the latest cards causing developers to close or switch to Console only work. It would likely also alienate a significant portion of nVidia/AMD's gamer customer base and would lead to a big PR problem and cost future sales unless the Mining and commercial demand for GPU's continues to fill the supply in the medium to long term.

 

The current PC market is also designed around the availability of GPU's as many CPU's (Esp AMD) have no video capabilities so without a discrete GPU you simply cannot use your PC. This would need to go through a big shift to APUs to at least facilitate usage of all PC's for Non gaming Purposes. This doesn't take into account the current PC's who have GPU's which could fail and then would be forced to buy a new APU (assuming it was compatible) or a whole new system because GPU's have become and industrial product.

 

While you are technically correct that due to the secondary market prices, scalping is possible due to a difference between the MSRP and the secondary price, the idea that consumer goods should exist in an ungoverned price environment is unpalatable at best. Also for a Manufacturer suddenly charging up to several thousands of dollars more for an identical product as 6 months or year ago would be both exploitative and suicide PR wise if those mainstream customers (who represent 90% the market) are ever needed as customers in the future.

[SteveiJobs]

17 hours ago, Amias said:

Enlighten us then.

 

Because right now S&D is describing the market exactly right.

 

Demand > Supply = Cost Increase

I'm just saying that supply and demand are only two variables that affect the price and cost of something.

 

A company like Nvidia manufactures these cards and sets a price based on the margin they make per card and the number they expect to sell. That's MSRP and in a stable market, that's usually the highest it will go for.

 

Something like scalping introduces another variable, competitive purchasing, that artificially inflates demand. If scalpers didn't have bot networks that scooped up cards before retailers could get them, the cards would still go for over MSRP, but nowhere near the 2x-3x markup they're going for now. Scalping bots introduce a competitive disadvantage (just look at all the saltiness in the VAG thread about how it doesn't level the playing field *enough*) and demand rises artificially because of FOMO. Another example would be the Colonial Pipeline hack and a rush on gas in the American Southeast There was a relatively insignificant change in the supply and demand wouldn't have changed if the news never came out, but consumer panic is a real thing.

 

And then there's tariffs, global shipping, market competitors, available alternatives (used cards, APUs), etc. It's a much more complex model than a couple non-mathematical graphs would indicate.

 

At the end of the day, people are frustrated that they cannot get their hands on not just new cards, but even 600/700/900/1000 series cards at reasonable prices. Telling people "suck it up, that's economics" is true, but it's also not helpful. Retailers are trying to find inventive ways to get them in the hands of regular consumers, but the above factors are making that difficult. I don't have an answer (I don't think anybody really does right now), but I empathize with people's frustrations and they are valid.

 

 

[tikker]

20 hours ago, SteveiJobs said:

There was a relatively insignificant change in the supply and demand wouldn't have changed if the news never came out, but consumer panic is a real thing.

I think demand indeed increased artificiall a bit because more people started looking to turn a profit from it, but it would probably still have been very high even without them as that is why scalping starts and is profitable in the first place.

[Rex Hite]

I see supply and demand as a behaviour not a law so its causes and effects can be complex, chaotic and unpredictable. How the effect of supply and demand is allowed to continue in a market can depend on the product in question; toys vs food might be an example.

 

[Amias]

22 hours ago, SteveiJobs said:

I'm just saying that supply and demand are only two variables that affect the price and cost of something.

Yet you continue to say nothing...

22 hours ago, SteveiJobs said:

A company like Nvidia manufactures these cards and sets a price based on the margin they make per card and the number they expect to sell. That's MSRP and in a stable market, that's usually the highest it will go for.

 

Something like scalping introduces another variable, competitive purchasing, that artificially inflates demand. If scalpers didn't have bot networks that scooped up cards before retailers could get them, the cards would still go for over MSRP, but nowhere near the 2x-3x markup they're going for now. Scalping bots introduce a competitive disadvantage (just look at all the saltiness in the VAG thread about how it doesn't level the playing field *enough*) and demand rises artificially because of FOMO. Another example would be the Colonial Pipeline hack and a rush on gas in the American Southeast There was a relatively insignificant change in the supply and demand wouldn't have changed if the news never came out, but consumer panic is a real thing.

All affecting one thing. Demand.

 

I don't want to get into the arguement of what's driving the true demand. There isn't enough data to understand.

 

That been said there are known factors which very well could affect demand. Covid, WFH, mining, iot, and prior gen poor performance. All of which are tangible real problems.

 

Scalping however is a small reaction to this problem. Not an underlying cause.

 

People are not scalping car silicon, yet we're seeing significant shortages there. 

 

People are not scalping direct silicon fab time, yet Samsung is still considering delaying it's next products due to the increased demand.

 

https://www.bbc.co.uk/news/technology-56433082

 

22 hours ago, SteveiJobs said:

And then there's tariffs, global shipping, market competitors, available alternatives (used cards, APUs), etc. It's a much more complex model than a couple non-mathematical graphs would indicate.

S&D doesn't model supply nor demand. You're getting ahead of yourself. It just tells you that when demand is higher than supply, prices rise.

22 hours ago, SteveiJobs said:

At the end of the day, people are frustrated that they cannot get their hands on not just new cards, but even 600/700/900/1000 series cards at reasonable prices. Telling people "suck it up, that's economics" is true, but it's also not helpful.

No it's setting their expectations. Prices will rise. Until the GPU market can stabilise, which is very unlikely for years (thanks Apple, Samsung, miners, Nvida, and gamers) budget double to triple what you expect for a GPU.

 

Prices are only going one way. This isn't a spur of the moment for a shiny new product, we're only 6 months into a very long term issue. 

 

All stock is gone. There are practically no new or last gen cards on the "MSRP" market. People need to realise that.

22 hours ago, SteveiJobs said:

Retailers are trying to find inventive ways to get them in the hands of regular consumers, but the above factors are making that difficult. I don't have an answer (I don't think anybody really does right now), but I empathize with people's frustrations and they are valid.

Increasing the price does that.

 

People and gamers need to realise we lived through a unique part of history of cheap, incredibly powerful GPUs. The market and works has moved on and the demand structure completely changed.

 

The inherent value of these cards has at minimum doubled or tripled. This is the new future.

[slyyfox]

Very interesting post.

[Freakwise]

On 6/15/2021 at 6:12 PM, Whos Sayin said:

The tech community just obsesses over new hardware and always uses the most demanding games to show a difference between them like this. 

Well, the name said it all isn't it, it's TECH COMMUNITY, get it?

No?, well no problems

 

And they're using most demanding game because it's the ONLY way we can visibly see the differences that actually MATTERS, 

 

If they're using pac man or Tetris when comparing 3080 vs 3090, it will be well over 500+ fps at 1080p in which case it's already diminishing returns, and people who play games like that doesn't need anything close to that,

Not to mention people who buy new gpu always targeting to play "modern" games once they get it...

 

[Amias]

10 hours ago, Caroline said:

Whenever I want to have a good laugh I read this post and OP's comments.

Always happy to be of service.

 

Interestingly the ongoing impact to the crypto mining in China is hitting my theory two fold.

 

Firstly the demand has dropped through the floor, they have clamped down on mining and the number of actual miners was I believed massively under estimated. 

 

But more importantly these cards haven't just burnt out and gone, they are being resold, so the supply is technically increasing massively.

 

Demand goes down, supply goes up. Prices can drop.

[whm1974]

17 hours ago, Amias said:

Always happy to be of service.

 

Interestingly the ongoing impact to the crypto mining in China is hitting my theory two fold.

 

Firstly the demand has dropped through the floor, they have clamped down on mining and the number of actual miners was I believed massively under estimated. 

 

But more importantly these cards haven't just burnt out and gone, they are being resold, so the supply is technically increasing massively.

 

Demand goes down, supply goes up. Prices can drop.

I wouldn't buy any dGPU that has been used for Mining. It may just die on you when you can the least afford to buy a replacement.

[Coastqr]

On 6/6/2021 at 2:15 AM, Spotty said:

Oh, so people aren't lining up at Best Buy to buy a graphics card for $800 so that they can immediately sell it on Craigslist for $1500?

 

This is going to be an interesting thread...

lmfao if i got a 30 series card for my poor little 10700k suffering from a 1660 ti, i would want t o scalp it, except for, 

 

a. it would be hard to get another one, and

 

b. i dont think my dad would approve of me being that scummy

[Amias]

On 7/12/2021 at 2:55 AM, whm1974 said:

I wouldn't buy any dGPU that has been used for Mining. It may just die on you when you can the least afford to buy a replacement.

Maybe, but it's already likely survived it's bathtub curve ...

 

I would also hazard a guess they don't overclock their cards due to the energy efficiency dropping off.

 

So a well run functional card that hasn't be overclocked ... Probably will have a better reliability than new bought.