Is consumer sentiment against overcharging producers a bad thing? (user search)
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  Is consumer sentiment against overcharging producers a bad thing? (search mode)
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Author Topic: Is consumer sentiment against overcharging producers a bad thing?  (Read 3868 times)
lfromnj
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« on: May 02, 2024, 12:47:43 PM »

https://www.slowboring.com/p/restaurants-should-charge-more-for

I was thinking about this for the past year. Basically NVIDIA and other gaming chips were being sold by scalpers for huge profits and NVIDIA said they didn't have enough capacity. But the question is why didn't NVIDIA just charge more if they had a shortage of supply? Some theories are that it basically hurts consumer perception. But in this case if consumers are still willing to pay more for a chip why shouldn't that extra surplus just go to NVIDIA rather than some scalper who isn't actually doing much economic benefit to the market. NVIDIA can then use that extra cash to reinvest and produce more chips which would lower the price for future consumers. Unfortunately it seems that for a lot of people if they charged more it would have hurt their reputation more than they would have gained in profit.
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lfromnj
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« Reply #1 on: May 02, 2024, 06:08:49 PM »

Yeah I’m not arguing for a government ban of scalping. People should have the right to resell stuff they own. At the same it just seems inefficient due to cultural quirks.
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lfromnj
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« Reply #2 on: May 09, 2024, 09:55:56 PM »

I was thinking about this for the past year. Basically NVIDIA and other gaming chips were being sold by scalpers for huge profits and NVIDIA said they didn't have enough capacity. But the question is why didn't NVIDIA just charge more if they had a shortage of supply....

Well, once the dust settled that's exactly what they did with the 40 series. The launch MSRP of the 4080 was almost double that of the 3080, and most other cards also had significant increases in MSRP. It has caused some amount of backlash for sure but the market has more or less accepted it.
In any case, not long after the 40 series launched the AI boom went into full gear and Nvidia once again found themselves selling shovels in a gold rush, so consumer GPU pricing quickly became an academic issue as far as Nvidia's profits were concerned.




Fair enough, I do know Nvidia's margins are good. I still don't get the argument for backlash if its almost impossible to stop scalpers and at least here the money can go to the people who created it allowing them to reinvest it.
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