Scalpers who buy graphics cards and game consoles only to sell them at very high prices are a problem. An iD The co-founder of software, John Carmack, has an idea how to stop it, as he explained Twitter last night. What if manufacturers simply auctioned their own stock directly to consumers?
“We would really be better off with a transparent auction system directly from the manufacturers and a more efficient market,” he wrote.
I’m not sure there are enough words to express how terrible it is. Not only does it fly in the face of business ethics and comes down to federal level in a murky legal area, but it is also wrong with the usual supply chain and could potentially make it more difficult than it is now for people to have a RTX 3080 or a PS5.
In a previous life, I worked for a small middleman business in the semiconductor industry for a few years, so let me break down the production process. As an example, let’s use tscrews called toroidal cores, these are thick rings with magnetic properties that are usually made of iron (but they may contain other metal elements). If you were to open the power supply unit of your computer, you would get one in it.
A raw material company sells the iron powder to the company that manufactures the core. That company then uses their equipment to push the power into the core models, then they paint it, and then they can sell it directly to the company that makes the PSUs, or they can sell it to distributors who then sell it to the companies. make the PSUs. The companies that allows the PSUs to sell them directly to companies like NZXT that provide services for PC buildings, or sell them to retailers like Micro Center that supply entire PC components to consumers who want to build their own PCs.
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This is the supply chain that everyone is talking about in the middle of the stream shift card. Computers and consoles need a lot of components to make it work, down to raw materials and small parts like toroidal core. If there is a shortage at any point along the way, supply becomes scarce, prices rise and consumers have to wait before they can get their hands on the products at a normal price.
When scalpers come in and buy all the GPUs and consoles, it creates a false scarcity by keeping the end products outside the normal marketplace. The proposal from Nvidia, AMD, Sony and Microsoft is coming to an end devices outside the normal marketplace and force users to go directly to them to buy graphics cards would not create the false scarcity in itself but to have those businesses auction their usual stock to the highest bidder would – nTo mention that it will anger many consumers.
Cthe distribution of distributors would also be a terrible idea for Nvidia, AMD, Sony and Microsoft, which rely on retailers or manufacturing / distribution agreements with companies such as Asus and MSI to sell their products. Not only would the companies have to take on the entire distribution task themselves, but also combined with an auction process that Carmack says “must ultimately earn the best for consumers” as all manufacturerss participated, it also offers all the companies for potential Sherman Act violations (legislation that prevents competitive behavior and pricing).
When it comes to auctions and bidding specifically, the Sherman Act prohibits anything that can be seen as a bid or price approach that is in conflict with a competitive market. Signs of this include price increases that at no stage of the manufacturing process as described above are in line with cost increases. and bid prices that decrease when a new or infrequent bidder submits a bid.
To completely eliminate the distributors and move to this manufacturer-direct action process can be interpreted as increasing prices that do not correspond to the natural price increase in the supply chain – not to mention, it is likely to adversely affect businesses such as Micro Center which sells entire PC parts to consumers.
Carmack’s thread, of course, commented. Some pointed out that scalpers can still decide to win a GPU or console at an auction. If the companies somehow acknowledge that the bidder was a scale accelerator and would adjust the bid price to be more reasonable, it could put them in a situation where they are being investigated by the DOJ for collusion.
The processes, according to Carmack, more problems than it would solve. The issue of scalping can not and will not be resolved at the manufacturer level. This must be resolved with federal legislation. But until this law exists, the only way we can stop scalpers from buying scalpers – even if you have the money to spend on a $ 1000 RTX 3070. Just be patient and wait for more stocks to market come. Scalpers will only keep copying as long as they think there is a question. As manufacturers auction their own stock, it just keep the products out of ordinary consumers hands, because only the rich can afford it. This is no different than what scalpers do.