Free Market Efficiency vs GPU Scalpers 2

[Hydrogen]

So what can consumers do about GPU scalpers killing free market efficiency?  

One drawback for scalpers centralizing GPU markets are associated storage costs. Storing 51,000+ GPUs in warehouses carries monthly fees. If consumers could organize and boycott GPU purchases. Those units would sit idle racking up significant costs. Suffice it to say, scalpers rely on steady and consistent sales to keep their enterprise profitable. Their ideal scenario is one of quick turnaround where they aren't forced to hold & store GPUs long term, where depreciation might come into play.

Another option to deter GPU scalping is for owners of GPUs to sell their units at lower prices than normal. Collectively, it could force the average cost of market prices below a threshold where GPU scalping can be profitable. This is similar if not identical to an old aggressive tactic called dumping. Which some say japan utilized to destroy US market share in the television manufacturing industry around the 1980s.

Scalpers rely on market centralization. The creation of additional decentralized markets for buying and selling GPUs, which they do not influence or control is yet another option. I wouldn't necessarily recommend buying GPUs on craigslist. But having more available markets, could provide us with more options and opportunities. Which could make consumers less reliant upon centralized markets dominated by scalping practices.

Ok I think I covered the most obvious options with a potential for curbing GPU scalping and market inefficiency.

Are there others I missed? Please, share.  



Part 1 in case anyone missed it is here:

https://bitcointalk.org/index.php?topic=5323513.0

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[The Sceptical Chymist]

Storing 51,000+ GPUs in warehouses carries monthly fees.

Are people actually squirreling away that many GPUs?  I've been watching Youtube videos about the GPU shortage and none of them have mentioned anything like that.  I had assumed the scalpers were just individuals with enough cash to snap up a handful or two of the most popular models and then selling them at jacked up prices on eBay.  If there are large-scale operators hoarding GPUs like that, I'd love to read about it.

This is all the result of having a free market, by the way and I'm not sure anything should be done about it except for manufacturers upping the supply and maybe do a pre-order system or something.  I know gamers are pissed off because of this, but I'm happy I was able to get my gaming computer that I don't use for gaming that has an RTX 3080 in it!  That thing crunches Folding@Home problems like a beast.

[Hydrogen]

Are people actually squirreling away that many GPUs?  I've been watching Youtube videos about the GPU shortage and none of them have mentioned anything like that.  I had assumed the scalpers were just individuals with enough cash to snap up a handful or two of the most popular models and then selling them at jacked up prices on eBay.  If there are large-scale operators hoarding GPUs like that, I'd love to read about it.

This is all the result of having a free market, by the way and I'm not sure anything should be done about it except for manufacturers upping the supply and maybe do a pre-order system or something.  I know gamers are pissed off because of this, but I'm happy I was able to get my gaming computer that I don't use for gaming that has an RTX 3080 in it!  That thing crunches Folding@Home problems like a beast.

...

Scalpers sold over 53,000 new Nvidia/AMD cards worth $65 million

Michael Driscoll's update on the state of eBay/StockX scalping continues with a look at the latest graphics cards from Nvidia and AMD. Just over 53,000 Ampere/RDNA 2 products were sold on the platforms, bringing in $65.45 million in sales and just over $16 million in profit.

Following on from his examination of Zen 3 scalping earlier this week, Driscoll looked at the turbulent graphics cards market. Nvidia’s RTX 3000 series and AMD’s RX 6000 line have been notoriously difficult to find unless you pay over the odds on reseller sites.

https://www.techspot.com/news/88446-scalpers-sold-over-53000-new-nvidiaamd-cards-worth.html

These scalpers seem to have deep pockets. Its not a new practice. I seem to remember gaming desktops, laptops and assorted high demand / limited supply markets being bought out and resold on ebay as far back as 10-15 years ago. Mostly during the black friday and christmas holiday season. Not certain how much of an improvement these new GPUs represent over previous generations. If it were possible for consumers to organize a hard boycott of GPU purchases for even a few months. The outcome may not go favorably for GPU scalpers.

GPU scalping could be disruptive to the crypto BTC mining industry. The main motive for posting this.  

[Twentyonepaylots]

Dumping could be a very good tactic but in this day and age, I highly doubt corporations will even drop their prices even for a little. They may say they are actively against scalping but those are hollow words, knowing that they wouldn't do anything to battle them out themselves. Implementing KYC for GPU purchases above a certain threshold (I'd say 2 because of SLI) is the bwst way we can keep these scalpers out of the game. What are they going to do if they are disallowed to buy more than 2 without proper reason? Karen their way out of a new GPU?

[odolvlobo]

So what can consumers do about GPU scalpers killing free market efficiency?  

I hope you don't mind if I also comment in your part 2 that GPU scalpers are direct result of a lack of market inefficiency.

As for a solution, the GPU manufacturers should either increase production or raise their prices so that the scalpers can't make money.

[hatshepsut93]

Scalpers rely on market centralization. The creation of additional decentralized markets for buying and selling GPUs, which they do not influence or control is yet another option. I wouldn't necessarily recommend buying GPUs on craigslist. But having more available markets, could provide us with more options and opportunities. Which could make consumers less reliant upon centralized markets dominated by scalping practices.

Scalpers rely on situations when demand is high but supply is low. Centralized markets or not, this doesn't matter to them, they make bots that instabuy GPUs the moment they are available. Just solve the problems with supply, and scalpers won't be a problem.

Also, this problem is really caused by miners, because they are the ones who are creating all this extra demand. In the previous GPU generation there was no problem with prices, because crypto wasn't as profitable as it is now.

[Hydrogen]

As for a solution, the GPU manufacturers should either increase production or raise their prices so that the scalpers can't make money.

Scalpers rely on situations when demand is high but supply is low. Centralized markets or not, this doesn't matter to them, they make bots that instabuy GPUs the moment they are available. Just solve the problems with supply, and scalpers won't be a problem.

Over the last 5 years, there have been many occasions where thousands of tons of surplus food wound up in landfills. Tons of excess food supply destroyed rather than be distributed to the poor. Or allocated to local food markets where it might decrease food costs. Shipments of aluminum are often delayed to produce artificial scarcity and inflate prices. In this way, shortages of aluminum are created despite there being a large abundance of supply.

Increasing GPU production wouldn't cut costs for reasons mentioned above. And many others. As long as the GPU market remained centralized enough for scalpers to retain control. They would be able to consolidate and inflate prices.

[paxmao]

Are people actually squirreling away that many GPUs?  I've been watching Youtube videos about the GPU shortage and none of them have mentioned anything like that.  I had assumed the scalpers were just individuals with enough cash to snap up a handful or two of the most popular models and then selling them at jacked up prices on eBay.  If there are large-scale operators hoarding GPUs like that, I'd love to read about it.
...

I agree with that and I am sceptic about the argument. As of now, there is general worldwide shortage of electronics, precisely of chips, due to the extreme unexpected demand due to COVID and some shortages of raw materials such as tin due to the commodities cycle.

As far as I am concerned, this market is no different from other oligopolistic ones. It is very difficult to get into the GPU business and there are just three options in the market, and that if you consider Intel Graphics and option at all.

[Lorence.xD]

Are people actually squirreling away that many GPUs?  I've been watching Youtube videos about the GPU shortage and none of them have mentioned anything like that.  I had assumed the scalpers were just individuals with enough cash to snap up a handful or two of the most popular models and then selling them at jacked up prices on eBay.  If there are large-scale operators hoarding GPUs like that, I'd love to read about it.

This is all the result of having a free market, by the way and I'm not sure anything should be done about it except for manufacturers upping the supply and maybe do a pre-order system or something.  I know gamers are pissed off because of this, but I'm happy I was able to get my gaming computer that I don't use for gaming that has an RTX 3080 in it!  That thing crunches Folding@Home problems like a beast.

If that was true, then that is not just any scalper because that is definitely a syndicate and I think that the only way to defeat this kind of thing that is happening is to create more GPUs and to limit the buy order for GPU per person.

[kaya11]

Are people actually squirreling away that many GPUs?  I've been watching Youtube videos about the GPU shortage and none of them have mentioned anything like that.  I had assumed the scalpers were just individuals with enough cash to snap up a handful or two of the most popular models and then selling them at jacked up prices on eBay.  If there are large-scale operators hoarding GPUs like that, I'd love to read about it.

This is all the result of having a free market, by the way and I'm not sure anything should be done about it except for manufacturers upping the supply and maybe do a pre-order system or something.  I know gamers are pissed off because of this, but I'm happy I was able to get my gaming computer that I don't use for gaming that has an RTX 3080 in it!  That thing crunches Folding@Home problems like a beast.

If that was true, then that is not just any scalper because that is definitely a syndicate and I think that the only way to defeat this kind of thing that is happening is to create more GPUs and to limit the buy order for GPU per person.

It is getting worst, I was happy when I saw prices of gpu last year was affordable in our place but now, it's doubled the price. And guess what, there none to buy at this moment of time. Scalpers are the worst, and the dealers don't bother limiting a single guy purchasing most of the cards. I see post of facebook that scalpers posting brand new gpu's for sale and no limit at all, it's like a network of scaplers and they now what to do, it's nearly like dealing with drugs but the thing is it's not illegal and noe actions were taken. I guess it's true that there are no emotions on marketing.

[Lorence.xD]

~

It is getting worst, I was happy when I saw prices of gpu last year was affordable in our place but now, it's doubled the price. And guess what, there none to buy at this moment of time. Scalpers are the worst, and the dealers don't bother limiting a single guy purchasing most of the cards. I see post of facebook that scalpers posting brand new gpu's for sale and no limit at all, it's like a network of scaplers and they now what to do, it's nearly like dealing with drugs but the thing is it's not illegal and noe actions were taken. I guess it's true that there are no emotions on marketing.

Don't worry about it, remember that companies will still continue to make those GPUs and it is only a matter of time before those scalpers will lose their potential profit, my advice is to not buy from this scalpers because it perpetuates their scummy business model, so if you don't buy from them, they won't get a profit and eventually they will stop scalping because they know that no one is going to buy their overpriced products. Patience is the key here, once there is a new supply, they are definitely going under.