A Better Way Of Selling

lentro

I was wondering, what do you guys think of this?

A lot of the recent product launches have gone awry. NVIDIA's 30-series, AMD's Ryzen 5000 and Big Navi, PS5, etc. etc. have faced stock shortages. However, they cannot raise prices out of fear of needing to lower them too drastically in the future (I assume).

This has created a huge market for scalpers, who buy for MSRP and sell for often 2x+ the MSRP on eBay/StockX.

This is the same for BF deals - many run out too quickly.

That got me thinking, why not have auction-based pricing for more products?

E.g. if NVIDIA can have say 100 items with a high BIN (E.g. $1300/NVIDIA 3080) and an auction price too. People would bid, and after 24 hours, the 3080s not sold via BIN would go to the highest auction prices.

Hosts could have this for their BF sales to ensure all are sold (pricing too high > not enough ppl buy to fill up the server, pricing too low > sells out and people who actually need the machine can't get it)

Thoughts?

seriesn

@lentro said:
I was wondering, what do you guys think of this?

A lot of the recent product launches have gone awry. NVIDIA's 30-series, AMD's Ryzen 5000 and Big Navi, PS5, etc. etc. have faced stock shortages. However, they cannot raise prices out of fear of needing to lower them too drastically in the future (I assume).

This has created a huge market for scalpers, who buy for MSRP and sell for often 2x+ the MSRP on eBay/StockX.

This is the same for BF deals - many run out too quickly.

That got me thinking, why not have auction-based pricing for more products?

E.g. if NVIDIA can have say 100 items with a high BIN (E.g. $1300/NVIDIA 3080) and an auction price too. People would bid, and after 24 hours, the 3080s not sold via BIN would go to the highest auction prices.

Hosts could have this for their BF sales to ensure all are sold (pricing too high > not enough ppl buy to fill up the server, pricing too low > sells out and people who actually need the machine can't get it)

Thoughts?

I have registered the domain and planned to do vmauction. But crap it was a pain in the ass to figure out a valid working logic.

yoursunny

Auction can potentially increase profits but it comes with a risk of having to sell at lower than cost.
It cannot prevent reselling.

Not_Oles

Hetzner

yokowasis

The problem it took too long to clear the inventory.

lentro

@yoursunny said:
Auction can potentially increase profits but it comes with a risk of having to sell at lower than cost.
It cannot prevent reselling.

Ideally, this ensures all resources a host has are sold at maximum price (better to sell at a loss than none at all, and you can dictate the minimum bidding price), which should theoretically maximize profits. Disable service transfers, and the second problem is solved too

user123

@lentro said:

@yoursunny said:
Auction can potentially increase profits but it comes with a risk of having to sell at lower than cost.
It cannot prevent reselling.

Ideally, this ensures all resources a host has are sold at maximum price (better to sell at a loss than none at all, and you can dictate the minimum bidding price), which should theoretically maximize profits. Disable service transfers, and the second problem is solved too

Except for all those resellers who also give the account login information to the buyer.

Adam1

Let's be real here. Sony, nvidia, AMD and co were fully aware that they would face stock shortages and create the scalper market immediately after launch, yet they decided to launch them anyway.

These companies have no interest in solving the "problem" - it wont benefit them.

Scalpers benefit Sony, because they will resell the products to someone that is clearly willing to pay far too much for the console, which means they are likely to buy more games and accessories, so win win for sony - vs holding back and launching later.

Nvidia benefit because they have a load of old stock to shift, which they wont have to reduce the unit prices of because of availability.

AMD too, although I think AMD CPU's are overhyped anyway.

swat4

@lentro said:
I was wondering, what do you guys think of this?

A lot of the recent product launches have gone awry. NVIDIA's 30-series, AMD's Ryzen 5000 and Big Navi, PS5, etc. etc. have faced stock shortages. However, they cannot raise prices out of fear of needing to lower them too drastically in the future (I assume).

This has created a huge market for scalpers, who buy for MSRP and sell for often 2x+ the MSRP on eBay/StockX.

This is the same for BF deals - many run out too quickly.

That got me thinking, why not have auction-based pricing for more products?

E.g. if NVIDIA can have say 100 items with a high BIN (E.g. $1300/NVIDIA 3080) and an auction price too. People would bid, and after 24 hours, the 3080s not sold via BIN would go to the highest auction prices.

Hosts could have this for their BF sales to ensure all are sold (pricing too high > not enough ppl buy to fill up the server, pricing too low > sells out and people who actually need the machine can't get it)

Thoughts?

Having an auction on special/festival occasions is definitely beneficial to both the customers and providers. To make sure both parties are happy, a mixture of auction types should be adopted.

(1) English auction - I guess that's the most common auction type that needs no explanation here. All current bids are made public and the highest bid wins.

(2) First-price sealed-bid auction - Blind bids. Each participant submits the price privately. The highest bid wins.

(3) Dutch auctions - This one is like Hetzner's auction. The item starts at a higher price (normally higher than the market value) and will be progressively lowered until a bidder is prepared to buy at the current price, winning the auction

(4) No-reserve auction - Self explanatory enough, the item for sale will be sold regardless of price. Providers might feel they might be looted, however they usually end up being the winners in the long run because it potentially attracts a greater number of bidders due to the possibility of a bargain. With more participants, the chance of selling at a good price is higher.

(5) Vickrey auctions - Similar to (2), bids are submitted privately and the person offering the highest wins. The only difference is, however, he/she only pays the the second-highest bid. The advantage here is buyers are more prone to offering slightly more than expected, thereby sellers often receive better revenue at the end.

Well.. the above are all Forward auction - easy to manage but if there are several providers who are willing to launch a joint-event, Reverse auction / Double auction will be much more fun, albeit complicated to manage.

lentro

Woa @swat4 thanks for the insights!