ub4ty
Senior member
- Jun 21, 2017
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Little bit of anecdotal evidence from an admittedly small sample size. Having worked in PC part sales through the original Bitcoin craze and now this Eth craze I can tell you for certain that the middle men wholesalers absolutely 100% mark up based on the highest price they think they can pass on to actual retailers. This sounds like AMD knew the volume was going to be extremely limited, so they tied in the bundle pricing to loose cards to keep the bigger re-sellers from buying all inventory and holding the price at a higher point. It's simple economics, AMD isn't doing anything shady in the slightest, in fact as was mentioned earlier AMD is actually LOSING more money on the rebates to keep the retail channel from doing absurd mark ups due to limited quantity. The reality that people don't want to accept is that the retail/wholesale channels are extremely greedy and knowing what I know I can say with 100% certainty they don't want people to know how badly they rip off customers during a fiasco like this. If AMD was going to do a super low volume initial launch they really should have done what NVidia does and pick an AIB partner to launch the reference design and control the supply themselves for 2-3 weeks while AIB's make custom designs.
To give an example of what my shop is doing to keep from gouging our customers on graphics cards with the bundle strategy. Our shelf GPU's we have in stock that are in high demand (RX 580, 570, GTX 1060, 1070) are subject to market fluctuations as loose cards, but we get a few in stock that we bundle with new builds at cost as system specials. We make the margin back on other products, but as long as a customer is buying the card to game on with a new PC we'll sell them the card at MSRP (which is usually cost for us right now). What has happened is retailers had X number of bundle pack cards, they saw how fast the solo cards sold out and decided to can the whole bundle, take the cards from those and sell them as loose cards at a higher price (probably because the bundles weren't moving at all due to how much money you had to spend to receive the full savings) The margin was intended to be made up for on bundle cards on the other parts, much like my margins in store are made up for in up sells like RGB lighting kits, custom sleeved cables, water cooling, gaming peripherals or new monitors. Retailers decided to double dip, as in, not take a hit on any margin at all to incentivize more sales because the quantity wasn't enough to justify it, likely cancelling the bundled savings and just deciding to maximize profit from the inventory they had.
TLDR: everyone wants a slice of a pie, retailers are the culprits in price inflation products, this is always true. AMD sells to AIB at x price, AIB marks up X% to make more to wholesale channel, wholesale channel marks up X%, then retailers mark up to literally whatever they think will sell. If people are buying Vega 64 for $750, you can bet it will be priced at $750
Edit: Spelling hard.
And this is exactly why such inefficient non-value added aspects of a distribution channel eventually get put out to pasture. Unbounded greed from individuals who contribute no value at all to producers or consumers except skimming and leeching. It's exactly why the B&M Armageddon happened and exactly why one will occur to formal distribution chains.
People are becoming increasingly aware of who the problem is with incidents like this and its only a matter of time before something is done about it. I guarantee you that this Vega fiasco has only just begun in terms of coverage and investigation. Before its all said and done it will be known exactly who makes what and who marked up what. The real fallout comes after that.
Everyone wants a slice of pie. Some are greedy and given the non-valued added service they provide don't deserve even an ounce of pie. Eventually and for some time myopic businesses always overstep and get beyond greedy... It's at those moment that the shenanigans come to light and whales or new entrants disrupt and sometimes destroy a stale/stagnant/non-value added portion of business.
Quite clearly the only two parties of value are the people producing the product and the people who consume it. Everything else is skimming/leeching. The more consumers are paired with producers and the fat is cut out the better the world and markets. Huge market disruptions have happened before and they'll happen again and again because many groups get lazy and greedy and do nothing but non-value added leeching/skimming. It's a function of nature to cleanse such things out of any system.