Indeed, I hate that the MSRP is far below the market determined pricepoint. The invites shortages and opens the door for scalping.
I have been trying to get an Xbox Series X for months. I would like to have a new one, with a warranty. However, I finally gave up and "won" one with a $606 bid on stockx.com. After fees, shipping, etc, its close to $170 over the unrealistic $500 MSRP, which just shows how out of touch the MSRP really is.
> I hate that the MSRP is far below the market determined pricepoint. The invites shortages and opens the door for scalping.
For some reason, this combination of sentences confuses me. The scalpers determine the market price by buying almost the entire volume. The only way to beat scalpers is to raise prices beyond what people are willing to pay, which forces scalpers to charge more to turn a profit, further raising the total price.
I guess I don’t see how an initially higher price would stop scalpers at all, they’d just keep buying the entire stock, anyway.
What you are describing isn't scalping. Scalping isn't about buying the entire supply. That's something completely different, namely market manipulation and this requires a huge amount of capital and you are not guaranteed to sell all your stock which makes it highly risky since the artificial demand could be outstripping regular demand. If you buy 100k GPUs and consumers only want to buy 75k GPUs then you would be stuck with 25k in this market manipulation scheme.
However, since there is actually more than 100k demand for GPUs there aren't enough GPUs for regular customers. Meaning that a large portion of consumers are actually getting ahold of GPUs which would make it impossible for market manipulators to buy the entire supply. You can't have both things at the same time. You can't be angry that stupid idiots get stuck on inventory because you aren't actually buying GPUs while at the same time being angry for there not being enough inventory because people are actually buying GPUs.
The reality is that people are buying GPUs and thus there is a lack of supply. Scalpers try to get ahold of the supply and auction it of fairly so that anyone who wants a GPU can get it since Nvidia failed to make sure that everyone who wants a GPU can get it.
>The only way to beat scalpers is to raise prices beyond what people are willing to pay, which forces scalpers to charge more to turn a profit, further raising the total price.
I guess I don’t see how an initially higher price would stop scalpers at all, they’d just keep buying the entire stock, anyway.
As I said, if scalpers keep buying the supply while nobody wants the GPU they will simply be stuck with the excess stock and since they are in it to make money they will be forced to sell the GPU at market rates which is a net loss for them since they bought above market rate and a net gain to Nvidia. For the customer there is no difference.
> The only way to beat scalpers is to raise prices beyond what people are willing to pay, which forces scalpers to charge more to turn a profit, further raising the total price.
No, this can't happen. If you raise prices beyond the market-clearing point, scalpers would need to charge prices higher than that -- and sell all their inventory -- in order to turn a profit. This can't be done; the higher prices prevent them from selling everything they bought.
> I guess I don’t see how an initially higher price would stop scalpers at all, they’d just keep buying the entire stock, anyway.
Again, this can't happen. Scalpers are not able to keep buying products they can't sell. You can only buy the entire stock if your revenue from selling the amount you can sell exceeds your cost of buying the entire stock. Exceeding your cost of buying the amount you can sell isn't enough.
Your economic model implies that all goods are controlled by scalpers who can never be dislodged. That's not even close to the truth. Why do you think that might be?
I have been trying to get an Xbox Series X for months. I would like to have a new one, with a warranty. However, I finally gave up and "won" one with a $606 bid on stockx.com. After fees, shipping, etc, its close to $170 over the unrealistic $500 MSRP, which just shows how out of touch the MSRP really is.