John Carmack's idea of manufacturers auctioning hardware directly to consumers is flawed

[arrowflash]

Yea you see all those Trump supporters out there screaming about "stay away big government" are also many of the ones screaming for this type of regulation.

the fact is this is its capitalistic market and how would any government control companies / markets that work on a global scale?

This is isn't buying concert tickets to Madison Square garden.

This is international business with independent companies and independent 3rd party markets (from around the world).

There's no real way to "regulate" this that would truly fix it.

The answer to me is to be better prepared next time and don't let they hype train beat you... You beat the hype train.

I KNEW this was coming for almost a year and I was fully prepared on day for a battle. I never used paid for bots or anything of the sort but I did make sure my notification game was top tier and my checkout process was down to a science (I mean how many people likley got screwed cause they didn't memorize their cvv code?)

I did the work before hand and even stayed phsyclaly attached to my phone / pc for days at a time but all in all I pulled 1 3080 on day 1 after 8 hours of trying and within the first 3 weeks I had gotten 9.

Not to sell so don't come at me with that just have lots of friends and family (and their gamer spouses) who headed my advice and "got 1 now before it's too late" so I hooked them up and now they all owe me a life debt lol

I even kept picking up cards as the initial one I got wasn't the one I wanted and in the end by December I had bought a total of 12 with no bots or scalping involved.

There was plenty of warning all year that this was going to happen and if you truly absolutely knew you couldn't make it without you should have done the work to make sure you didn't miss out.

I don't get why you felt the need to throw partisan politics into the discussion since it's a recipe for derailing. Anyways I never fully subscribe to prepackaged politics and belief systems, and when it comes to economics, business and labor my ideals do tend to align more with the left - just like there are other things where my ideals do align more with the right. But I digress.

You do have a point that we are talking about businesses and markets on a global scale, but I thought the implications were obvious. The point is not to completely end scalping, just like it's impossible to completely end drug and arms trafficking or modern day slave labor despite all the laws and regulations. The idea is to discourage the practice by making scalpers lives miserable. Discouraging it by making the scalping process as expensive, slow and cumbersome as possible, forcing most scalpers to either quit or downscale their operations - not only because of more hurdles in the process, but also because of decreased demand for their "services" since more people would be able to obtain cards through legitimate channels at MSRP.

The markets do work on a global scale, but with a couple of big markets putting enough hurdles, it would already help things immensely and encourage other smaller markets to look into it.

Of course since you pretty much admitted to being a small-time scalper yourself (your claims of "no scalping involved" won't change this fact - if you want to argue semantics then let's call you a hoarder or a whale instead), any attempts at addressing the issue will be bad for you. Also nice attempt at derailing the discussion by introducing partisan politics.

 

[Austinturner]

From the article
“Manufacturers have one task: to make products. Selling goods directly to customers isn’t part of their job description,”

Absolute rubbish, many manufacturers in many industries have found selling directly to consumers improves margin, the consistency of service, brand loyalty and the amount of information and feedback they can learn from their customers.

Having to sell only to retailers is a pre-internet legacy mindset snd manufacturers should definitely think about direct sales opportunities.

 

[m3tavision]

It's called Retail and has an MSRP for a reason.

The Problem is Online retailers selling more than one, to a customer. And of coarse nVidia selling more than 70% of their stock out the backdoor at Prosumer prices.

Brick & Mortar stores should get the buik of online sales.... which should come a month after retail stores have them. To aid better local traffic.

 

[Eflow]

Price Discrimination is a common practice used by marketing departments to maximize revenue and profits. Traditionally, we see price discrimination when items are originally sold at MSRP and then later discounted to others who want the item, but aren't willing to pay the original price.

Online commerce makes it easier for price discrimination to move the opposite direction. Auction each item individually to maximize fianancial performance. How much money did Nvidia and AMD forego in the past 3-4 months because they're selling to retailers at fixed costs? How long will it be before one of them decides that the benefits of auctioning (I.e. revenue upside) outweigh the cons (I.e. alienated customers and vendors who won't carry your product)?

Retailers like Amazon have already implemented "dynamic pricing" models on some products. We may see manufacturers cut out the middle man and sell dynamically-priced items directly to consumers.

 

[PEnnn]

Earth to John C: Have you heard of eBay?? It's a friggin' auction house!!

 

[Reehahs]

It's called Retail and has an MSRP for a reason.

The Problem is Online retailers selling more than one, to a customer. And of coarse nVidia selling more than 70% of their stock out the backdoor at Prosumer prices.

Brick & Mortar stores should get the buik of online sales.... which should come a month after retail stores have them. To aid better local traffic.

Online platforms can help by preventing listings of things less than an year old above MSRP.

 

[havok585]

The only flaw here is OP's thinking :

If a miner has 100-10000 cards for himself, the other 9999 people that use for what they are, gaming, cant have them because of human greed.

 

[Dirges]

Online platforms can help by preventing listings of things less than an year old above MSRP.

I think this is the only logical way to deter online scalpers. I would change it a little by not allowing new product releases to be posted or sold on these 3rd party seller sites for the first 6-8 months and after that 3-6 months where they can only be posted as used products, maybe even put a limit on pricing. Then deregulated after that... But to do this regulations need to be implemented.

 

[alexnode]

Well I am boycotting nvidia, they should sort it out. Despicable practices, I might buy something in two years time and only if it is half the price of current msrp prices.They need transparency and accountability, as for retailers, most of them are the cause of this. I am with Carmack that direct sales have better accountability

 

[TheFrogmanCometh]

EVGA already has a queue system in place to divert scalpers, but the issue is low supply of GPUs from Nvidia and they're also still fulfilling orders for their retail and distribution partners. I would imagine they could sell all their inventory directly in the current climate, but they probably don't want to damage their relationship with retailers and such, for potential future business, when the craziness dies down.

 

[pildorman321]

My idea is simpler: skip this generation. I been doing that just fine ( like most steam users) since polaris.

 

[cliffordcooley]

My idea is simpler: skip this generation.

How many do we need to skip? I'm still running a GTX 660. I might wait another year and then get the 2060.

 

[jpuroila]

Carmack's absurd idea will only make the problem even worse. In the kind of market Carmack proposes, scalpers and whales will still exist, and they're still the ones who will hoard most auctioned cards to resell them to consumers at an even higher price than they were auctioned for. It would never work. It would only inflate prices even more.

Why would anyone buy from a scalper when they can just bid in the next auction(and with all the benefits that come from buying directly from manufacturer or authorized retailer)? If the prices in the auction will be higher, then scalpers must pay those prices the same as everyone else which kills their profit. The advantage scalpers have right now is that they can snatch the supply the instant it becomes available, which is simply not an option with(properly done) auctions. If you're the first to bid, that just means you get to bid first, and if you're a few minutes late, that doesn't matter: the price is either in the range you're willing to pay in which case you still have the option to bid, or it isn't and any scalper trying to sell to you will have to accept a loss.

Now, there are still situations where scalping would work(for instance, if you live in a locale where the manufacturer doesn't ship to, or don't have access to internationally accepted credit card), but for the most part scalping would just not work. Carmack's proposal does have actual problems(many of which are outlined in the article), but it would certainly be very effective against scalpers.

 

[arrowflash]

Why would anyone buy from a scalper when they can just bid in the next auction(and with all the benefits that come from buying directly from manufacturer or authorized retailer)? If the prices in the auction will be higher, then scalpers must pay those prices the same as everyone else which kills their profit. The advantage scalpers have right now is that they can snatch the supply the instant it becomes available, which is simply not an option with(properly done) auctions. If you're the first to bid, that just means you get to bid first, and if you're a few minutes late, that doesn't matter: the price is either in the range you're willing to pay in which case you still have the option to bid, or it isn't and any scalper trying to sell to you will have to accept a loss.

Now, there are still situations where scalping would work(for instance, if you live in a locale where the manufacturer doesn't ship to, or don't have access to internationally accepted credit card), but for the most part scalping would just not work. Carmack's proposal does have actual problems(many of which are outlined in the article), but it would certainly be very effective against scalpers.

I think this is a very optimistic assumption, almost naively so. I say scalpers would probably keep outbidding most buyers (even using bots for that) and still hoarding the cards to resell at even higher prices. Maybe it could partially fix the issue if the prices asked by scalpers to keep their rackets profitable reach a point where most people won't purchase new cards anymore, but like all else about this, that's a big maybe.

Don't forget about the crypto miners, too. They probably will also keep outbidding consumers and buying from scalpers to hoard cards no matter how high the prices.

Theoretically auctioning could work, as long as manufacturers combined auctioning with the anti-scalping measures proposed by me and others to limit purchases to 1 or 2 cards per consumer. Then again, it would only fix the scalping problem but not the overpriced hardware problem, and at the end it might still end up making the product even more expensive than with the current scalping market.

 

[jpuroila]

I think this is a very optimistic assumption, almost naively so. I say scalpers would probably keep outbidding most buyers (even using bots for that) and still hoarding the cards to resell at even higher prices. Maybe it could partially fix the issue if the prices asked by scalpers to keep their rackets profitable reach a point where most people won't purchase new cards anymore, but like all else about this, that's a big maybe.

Don't forget about the crypto miners, too. They probably will also keep outbidding consumers and buying from scalpers to hoard cards no matter how high the prices.

Theoretically auctioning could work, as long as manufacturers combined auctioning with the anti-scalping measures proposed by me and others to limit purchases to 1 or 2 cards per consumer. Then again, it would only fix the scalping problem but not the overpriced hardware problem, and at the end it might still end up making the product even more expensive than with the current scalping market.

Who is going to pay those higher prices? If they're high bidders, then almost by definition they're going to have a very hard time finding anyone willing to pay more(this of course assumes that the auction is well designed so it's not possible to place a new bid 0.1 seconds before the auction ends and win by default, regardless of whether anyone else would be willing to pay more - but even if that's not the case, the auction prices would stabilize at a level where scalping doesn't work since we're talking about thousands of units being auctioned).

And yeah, as I already said, this has a host of other problems and would do nothing to deter miners, but I don't see how it would fail to solve the specific problem of scalping.