That's not how scalpers operate. They're interested in getting the product off their hands as fast as possible. Given that PS5s are produced in mass quantities, and that supply disruptions are easing, buying and holding PS5s is almost certainly a money losing proposition.
Isn't that the fault of Sony for selling them at a lower price than what people are willing to pay?
And the value being provided is the possibility of buying the PS5. Even without scalpers, chances are that someone else would have bought it. Scalping only works when the demand is very high compared to the supply.
Scalpers exist when a company chooses to ignore the supply demand curve. The value of a Ps5 is much above the asking price, which is easily seen in the price scalpers are asking. This is similar to video cards as well right now, or tickets to many sporting events.
Scalpers essentially make it always possible for a customer to buy a product if they want it enough ($$$). Otherwise, it's more of a lottery system, if the product is not priced well enough.
>by making it difficult for manufacturers and retailers to manage demand effectively
This doesn't add up.
Every person who buys a PS5 from a scalper for $700-$800 would also buy it for MSRP at $500, unless they are insane. Demand would outstrip supply even in the absence of scalpers, because one PS5 would be bought at MSRP from a retailer for every one that would have otherwise been bought and then sold by a scalper.
The only kink is that because PS5s immediately sell out at a price of $500, people who don't have the time to camp checkouts and/or want the item immediately are shit out of luck. However, they could pay a scalper an extra $200 to do that for them, because that's the value of the time they would lose acquiring the PS5, or the value they would miss out not having the PS5 immediately. In economics parlance, this is a service. You can call it something else if it makes your feel better. Either way, scalper activity cannot oversell the demand for a PS5 beyond not accurately modelling the sales you would lose from customers not wanting to deal with the effects of illiquidity on the market. The only thing scalper activity misrepresents if your MSRP is below what they're charging is the customers who won't buy your product at all if you're constantly sold out. Scalpers do not change forecasts.
If you really want a ps5, then I’d recommend buying one off StockX. The seller sends it to StockX, StockX verifies it as an unopened ps5, and then StockX ships it to you. They’ve been doing this with sneakers and such for a while, and their bid/ask market is entirely transparent.
Some would probably say this is only encouraging scalpers, and while this may be true, scalping wouldn’t be an issue if there wasn’t first a supply issue. The scalpers are actually providing a service here: enabling those who want the product the most to get it first. Why should the blind luck of pressing “add to cart” at the exact right moment between inventory filling up and servers coming back online determine who gets a product and who doesn’t?
It makes me wonder how many other areas in life could be “scalped” — how many products have scarcity that only need a reseller marketplace to ensure a variable pricing that takes into account 1) that demand is not actually an aggregate, and 2) that disposable income is not an average.
Granted, a haggling-driven economy is onerous, as anyone who has lived in a developing country can attest to. But what if haggling weren’t onerous? What if every purchase on Amazon was a bid/ask market? If you want the product now, then bid at the lowest ask. If you are okay with waiting, then put in a low bid and hope for the best. I’m trying to think of a good reason that prices should be fixed, but the only reason I can think of it that verbal haggling is inefficient and that digital markets are not trivial to build.
I’m probably just trying to assuage my guilt over paying scalpers, but I think there is probably a unicorn of a startup somewhere in here.
Okay, let's discuss ethics. I don't see or have an ethical problem with this. Scalpers are taking a risk, if the supply was greater they lose, if the supply becomes greater before they can move their inventory then they lose. The supply is not greater. It is an amoral reality.
> I'd like to live in a world that isn't full of selfish assholes trying to fuck everyone else over all the time. I understand market dynamics just fine - I got rich from it and I'm a shittier person for it.
It is not possible to live in a market based economy and fulfill that desire. It is very easy for me to accept that. Demand for the asset simply has to dry up. It has not. People that want a PS5 can get one, at the available price. Scalpers are providing liquidity, you provided liquidity. Individual owners would be removing liquidity, likely causing greater premium in price to let one go and further hoops to jump through.
Now days PS5's and graphics cards are bought up quickly and sold by scalpers. So I am guessing some may not be suspicious at all but assume it is just a scalper and may even expect to pay a mark up on said items.
They're not forcing you to do anything at all. It's not even close, and I can float a guess that you haven't actually tried to buy a PS5 or any item like it at MSRP because you wouldn't seriously believe what you're saying if you did. I guarantee you that if you have time to burn and subscribe to one of the myriad sources of restock updates, you can get a PS5 at MSRP. I know multiple people who have done it. Just because it's possible doesn't mean that it isn't a pain in the ass. It's so annoying, people pay $200 to not have to do it. If the scalpers didn't exist, it would still be just as much of a pain in the ass, because the scalpers definitionally need somebody to buy everything that they do. The demand isn't erased just because they don't exist.
You're going on about how scalpers are abusive, deceptive, dishonest, immoral, rent-seeking leeches and are refusing to engage with the reality that their existence doesn't change anything other than giving you the option to pay $200 and skip the bullshit. I'm not asking you to like them, I'm just telling you that not much would be different if they were gone.
Downvoted or not, my ps5 has been shipped to StockX and will be sent along to me soon enough. Scalping is a fascinating economic topic with ramifications beyond sneaker and consoles.
A simple "pre-ordering"-queue seems it would decrease scalper interest as well (?) as it would be much more risky to order a bunch, hope you get early in the queue and sell to people who might get their machine just little time later.
Let people put up a small deposit as well for getting a place in the queue, and it'll be deducted whenever you buy the machine. Keep the deposit if you cancel your place in line. Would incentivize less manipulation as well.
I've been trying to get a PS5 for 2 years now, and I refuse to pay some scalper 200USD more than market price, out of principle. (But I guess that is also why I still don't have one :) )
If you're going to just completely refuse to engage with the three times you've been reminded in this thread that an economically viable scalper's resales definitionally represent the minimum demand for a product, you're either arguing in bad faith or are too pissed about this to think straight, and I'm just wasting my time. Scalping is obviously an emotional topic for you and it has you so wound up that you're saying stupid shit like this:
>these absolute useless low-lifes that should be unceremoniously kicked back into whatever minimum wage gutter they crawled out of.
If your perception of this situation is that minimum wage "useless low-lifes" should kicked back into the gutter because you have this logically unsound idea that it would be easier to buy a PS5 if scalpers didn't exist, you've lost the plot. Your understanding of the demographic that is doing this is wrong, and even if it wasn't, you have completely uncalled for contempt for a class of people who are trying to do better for themselves (or maybe even just trying to make rent and groceries).
If you're going to leave another comment hollering about rent seeking or how scalpers singlehandedly create this problem, but refuse to even acknowledge that you've already been told:
>The scalpers are selling them to somebody -- that somebody would have just bought at MSRP and you would still have to do what I mentioned above.
>because the scalpers definitionally need somebody to buy everything that they do. The demand isn't erased just because they don't exist.
>The fact that scalpers are still buying consoles means they're still selling them. That means if the scalpers didn't exist consoles would still be sold out, it would just be individuals following twitter accounts to spam refresh for a single console instead of 10.
I'm just going to ignore it, so you can save yourself the typing. I'm trying to give you the benefit of the doubt but it looks a hell of a lot like you don't have interest in a good faith discussion.
> I'm not arguing people aren't willing to pay more. I'm pointing out that the scalper is providing nothing of value to anyone but himself.
How is the scalper different from the retailer or the distributor (assuming there's a distributor between Sony and the retailer, although their might not be)
The scalper is providing value to the retailer by paying for and taking delivery of their inventory (although, if the scalper overbuys and then returns, that's a negative); although, if the demand is so high that the product never sits on shelves, the scalper doesn't provide much value to the retailer.
The scalper provides value to the customer by having inventory available.
I personally don't like to pay more to get something now, when I could wait and get it later for less, so I wouldn't buy from a scalper, but I can see there's value provided. The market shows there's value too.
Ethically, as long as you're honest about it, and personally, that would include not returning items you overbought, I'm not sure I see an ethical problem. If something is hard to find, and you take time and effort to find it, you can and should charge a premium to compensate you for your time. Sure, people buying to resell may move forward demand, and make the item harder to find, and that feels a bit squishy, kind of like if everyone stocks up on a commodity at once, it makes it harder to find, and makes stocking up more desirable, etc, but eventually people have enough and there will be a lull and then back to normal. Does that make stocking up unethical? I don't think so, but maybe it could be argued.
Scalpers do hurt innocent consumers, which is why they are so widely hated. Someone trying to buy their spouse a GPU or a PlayStation for Christmas isn't the one responsible for a fragile just-in-time supply chain. Many times, the problem isn't even the supply chain, it's just the fact that demand exceeds the total possible supply, like with concert tickets.
In the consumer space, there are many ways for vendors and retailers to combat scalpers, but their motivation to do so is minimal. They make the same money off a GPU or PlayStation regardless of who buys it.
> But no one says there is a need for this extra liquidity.
The fact that scalpers can sell the consoles for a much higher price shows that there is no market equilibrium with respect to the prices that the console vendors set. To achieve this, console producers could choose two strategies:
a) increase production
b) increase prices
a is impossible because of chip shortages, so b would be the way to choose to achieve "supply = demand" (i.e. everybody who is willing to pay the market price will get a console). Since console producers are not willing to do this move (perhaps for "marketing reasons" à la "our console is this cheap"), scalpers will make use of this market inefficiency, and ensure that the prices are those where there is a market equilibrium.
So, scalpers change the situation from "there is more demand than supply" to "supply = demand", making the market balanced.
Thus, the existence of scalpers is rather are sign that the console producers chose a price that is too low. The existence of scalpers is thus a mere symptom of this bad pricing decision of the console producers.
Right, the console isn't the source of most of the revenue (or any, some have been losses). The point is to get them being used with newly purchased games/accessories. The scalpers are actually taking money away from the console manufacturer for the period of time the console is held by the scalper. They're also scalping revenue off the top of the console and having a negative income effect upon the end user/customer of the console - which definitely negatively affects how much the end user/customer winds up sending to the manufacturer.
"artificial scarcity through predatory automation"
It's not artificial scarcity, though. The number of Pis or PS5s that get into the hands of end users is determined by the manufacturers. The scalpers only affect the allocation. Rather that the devices being allocated randomly among folks willing to pay the sticker price, they go only to the ones willing to pay the most.
reply