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Education Businesses

School Reopenings Stymie Teens' Reseller Gigs (pcmag.com) 147

It turns out school reopenings are disrupting the cash flow of industrious teenagers who spent the pandemic scooping up in-demand products via bots and reselling them for a hefty profit. From a report: "Yes, I am back in school. Yea, it's very annoying," said one US high school student named Dillon, who regularly buys video game consoles and graphics cards with automated bots. "I am sitting in math class and drawing class with my computer open, and I get told to shut it down during a [product] drop sometimes," he told PCMag in an interview. Dillon may be young, but he's among the legion of online scalpers who spent the pandemic at home buying and reselling the tech world's most-wanted products. "I would say around $10,000 to $12,500 average a month," he told PCMag. "Some months it would be exponentially higher, some would be lower."

Using automated bots he purchased and installed on his computer, and intel from other online resellers, Dillon scooped up products like the PlayStation 5 ahead of other consumers and sold them off at inflated pricing. But lately, Dillon's reselling hit a snag. After months away from high school because of the pandemic, he's now back in the classroom, where computer use can be strictly controlled. "When everything closed [during the pandemic], I could do whatever I wanted because I was doing my school from home," he said. But with the return of in-classroom teaching, Dillon says his profits have now fallen by about 25%.

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School Reopenings Stymie Teens' Reseller Gigs

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  • by redmid17 ( 1217076 ) on Wednesday September 29, 2021 @02:30PM (#61845451)
    Doesn't matter if they're 15 or 75. They suck ass
    • by wgoodman ( 1109297 ) on Wednesday September 29, 2021 @02:36PM (#61845487)

      Hey now, by lumping them together, you're making ass-suckers look bad.

    • Re: (Score:2, Flamebait)

      by sconeu ( 64226 )

      So people like this shithead are why I can't buy a low-mid range video card for under $400.

    • by Crashmarik ( 635988 ) on Wednesday September 29, 2021 @08:39PM (#61846661)

      1. no mention of how many people actually do this
      2. no mention of how many lost money trying to do this
      3. A tone that's designed to make the reader feel like a loser if they didn't get in on this.

      Thumbs up, well played

      • That's one take I suppose. Others may be opposed to scalping on principle.

      • by dcw3 ( 649211 )

        "3. A tone that's designed to make the reader feel like a loser if they didn't get in on this."

        Only the assholes who think this kind of behavior is acceptable. How did you feel?

    • by mysidia ( 191772 )

      I'm actually more concerned about the enablers.. the groups who are profiting by selling or "Renting" access to the bots that the kids are using.

      None of these people would be operating in such systemic fashion without the people organizing those groups who entice the kids and others to join them and then profit off of operating and selling the usage of the bots that are actually conducting the mass purchases.

    • by mysidia ( 191772 )

      At least the 15yo would have the the excuse that they're young and have undeveloped judgement and could be rehabilitated back into civilised society, Maybe.. there's no hope for the 75yo doing this.. same reason as people under 18 have a separate criminal justice system; they're legally minors and such, Not even supposed to have a buyer account on eBay/Amazon let-alone a merchant one for reselling stuff -- also, the 15year-old probably not been disciplined and guided well enough, and probably got sucked

  • by ZorinLynx ( 31751 ) on Wednesday September 29, 2021 @02:30PM (#61845453) Homepage

    The fact that scalpers can buy and sell GPUs and consoles at such high profits suggests that GPU and console makers are leaving a lot of money on the table. It boggles the mind that they don't raise prices so they can be earning this money instead of scalpers.

    Why the heck haven't they done this yet?

    • Re: (Score:3, Informative)

      by thegarbz ( 1787294 )

      Maybe because manufacturers don't want to be consider the scum of the fucking earth?

      • by silentbozo ( 542534 ) on Wednesday September 29, 2021 @02:49PM (#61845529) Journal

        You don't need to publicly raise prices.

        You just need to allocate part of your available stock to an internal unit that sells them via Amazon, eBay, etc. and price them just low enough to undercut the price the scalpers are charging.

        Since you're the manufacturer, you can guarantee availability of units. The added bonus of the extra profit is you can plow that into trying to increase supply.

        Every time the scalpers drop their prices to compete, drop yours a little more. At a certain point, their available funds are tied up in units that they can't sell because they cannot undercut you. Worse, they may have paid more than market price, trying to corner the market.

        Note, this strategy only works if you don't sell out. The moment you sell out of an item, you create a shortage which is just a siren call to scalpers to come in, scoop up all the available product on the market, at whatever price, and then mark it up to ludicrous levels, like with exam gloves, clorox wipes, etc.

        • by Wycliffe ( 116160 ) on Wednesday September 29, 2021 @03:16PM (#61845629) Homepage

          You could even do it simpler than that. Just partner with ebay and sell them all directly on ebay at auction. Set the list price as the starting bid. The first few units might sell for crazy amounts just like the first tuna harvest does in Japan but as supply increased the premium would quickly start to drop.

          That way the manufacturer isn't the bad guy. Anyone can bid including the scalpers so the price is determined completely by demand. It wouldn't do any good for the scalpers to try to corner the market because everyone has a chance to bid.

          You could still do it as an secret internal unit if you wanted to distance yourself but by selling at auction there is no need to undercut the scalpers as the price will automatically adjust as demand decreases.

          • by AmiMoJo ( 196126 )

            Do you really think people are so dumb they wouldn't understand that scheme? The headlines would be pretty bad.

            • Yes, people would understand exactly what was going on. If the company was worried about it they could donate any premium to charity which might drive the price up even more and would create headlines like "First 500 units of PS5 sell for $5k a piece generating 2.5Million for charity"

        • Since you're the manufacturer, you can guarantee availability of units.

          I think you're missing the obvious problem that has led to scalping in the first place.

        • by AmiMoJo ( 196126 )

          Do you really think people wouldn't notice and the details of what they were doing wouldn't leak out?

          During the shortages there have been a lot of details coming from people working in the supply chain. A scheme like this would quickly be discovered, and cause even more reputational damage than just being honest about price gouging.

      • by DarkOx ( 621550 )

        So how is not raising prices helping anyone? What I see is a marketpalce for video cards/consoles/etc where its now basically a lottery. A few lucky lucky winners get in the door or online shopping cart at mainline retailers ahead of lowlifes like Dillon. They get buy at a steep discount to real market price (lucky them)!

        Dillon buys at discount because he taking the risk of being stuck with inventory.

        If I want one I either have to wait until demand falls off or pay market price, but if I am willing to pay m

        • So how is not raising prices helping anyone?

          How is this a counter argument? Just because I can't be part of the solution doesn't mean I need to be part of the fucking problem.

          Everyone but Dillon would be better off if manufactures and big retailers would just price these things according to demand.

          No. Everyone would be equally worse off, just Dillian doesn't get some money, and instead we just point to manufacturers for being the problem that keeps affordable hardware out of people's hands.

          • by DarkOx ( 621550 )

            It would massively reduce the amount of fraud (as I stated).

            It would reduce the frustration (as I stated) if you wanted one of these things on day 0 - you could be reasonably assured of getting one if you were willing to fork over the premium.

        • by robi5 ( 1261542 ) on Wednesday September 29, 2021 @04:01PM (#61845839)

          It's called variable pricing, those who can wait for the product more, or who value their time lower, and keep informed and go after better deals, or visit lots of stores pay a somewhat lower price, and those with a sudden impulse and no time to waste pay more. Variable pricing

          • by DarkOx ( 621550 )

            Exactly price discrimination isn't bad thing. Scalpers and grey markets are.

            Its not at all uncommon for a lot of these guys to do things like register the products themselves when their is some kind of new account bonus etc, special edditions that might come with a game title etc get broken up, and than there outright frauds where ship something other than what is promised entirely (different spec'd units etc).

            It would be better for the Sony's of the world to ensure end line consumes get the full retail pac

      • What do you mean by scum? If people are willing to pay the prices that these resellers are selling at, then they must think the prices are reasonable.
    • by narcc ( 412956 ) on Wednesday September 29, 2021 @02:51PM (#61845537) Journal

      That won't work. Some scalpers are only able to charge higher prices because they're creating the appearance of scarcity and hitting that peculiar segment of the market that will pay a premium for more exclusive items.

      We've seen this before. The bottom will fall out and someone will get stuck with a lot of inventory they can't move without taking a loss. This kid is about to learn a very expensive lesson.

      At least, we can hope. This kind of anti-social behavior hurts everyone. It's a shame that not all scalpers get burned.

      • by ghoul ( 157158 )
        Someone should just write a few bots which create artificial scarcity and when scalpers buy up stuff, switch the bots off and remove the scarcity. Let them hold inventory. No cashflow means they cant cause more harm.
      • by djinn6 ( 1868030 )

        The appearance of scarcity works for the manufacturer too. Exclusive means higher perceived value, which means people will talk to their friends about having gotten one, aka. free advertising.

        I do wonder what it does for their overall volume though. For example, the only thing I remember about the Nintendo Switch is how they were always out of stock, so I gave up on buying one. I'm sure after a year and half it's probably been resolved, but the idea of purchasing one never crossed my mind since.

      • We've seen this before. The bottom will fall out and someone will get stuck with a lot of inventory they can't move without taking a loss. This kid is about to learn a very expensive lesson.

        Worst case he'll sell them for what he got them for, because he's not sitting on them. Sadly, the only lesson this kid is learning is that some people are stupid and others are shitlords, and being the latter is more profitable than the former. I don't buy shit from scalpers, they are slime, but lots of other people will so it doesn't matter how principled I am.

        • by narcc ( 412956 )

          Worst case he'll sell them for what he got them for, because he's not sitting on them.

          Don't underestimate human selfishness and greed. He'll take a loss if he tries to move units at cost, that much is certain. It's also common to see desperate scalpers to hold inventory waiting for market conditions to change in their favor. If supply increases now, for example, he might think he can wait for the holiday season to see if he can capitalize on any shortages that develop.

          Scalpers need to corner the market to move any inventory at a profit. That means they need to constantly be buying. (This

    • by WankerWeasel ( 875277 ) on Wednesday September 29, 2021 @03:24PM (#61845677)
      They haven't done so because they have people that figure out optimal pricing strategy for them. They understand that while they may be able to sell for a higher price, it means less buyers. Optimal pricing is a balance of quantity and price. Smart folks can find that optimal price at which they'll get the greatest number of buyers at the highest price. They also know that past that point, raising the price means less buyers, which in turn means less overall revenue.
      • GPU makers (for example) have a balance of "normal" and "super" cards (for a totally invented example, 3050 Ti, Super 3050 Ti, 3050 Ti Overclockers Edition, 3050 Ti Ultimate). Basically they get the same GPU chip and can install it in a $100, $130 or $150 card (for a profit of $10, $15 or $25).
        This works great when the market imbalance is relatively shallow - I can't find the $100 card buy I buy a 10% better card at an extra 20%, or 30%).
        What we have now, though, is basically a more than 100% perceived imba

      • by AmiMoJo ( 196126 )

        It's a bit more complicated than that for the GPU manufacturers and the game console manufacturers.

        To get manufacturing prices down they need volume. To keep their systems relevant and popular they need volume. People won't bother with AMD GPU optimization if hardly anyone buys an AMD GPU, and people won't make XBOX exclusive games if they are only going to sell a small number of units.

        Sony could have charged a lot more for the PS5, but wanted to come in as low as possible (below cost) to establish it as th

    • And in other news, people complain when a new phone or Oled Switch costs more than the model it supersedes

    • by stikves ( 127823 )

      Here is a simple idea, please feel free to steal: Raise the prices but don't profit from it.

      It would look really bad if Microsoft or Sony said "our consoles sell at a premium on eBay, from now on next gen is $800". However they could easily say: "people are willing to pay a premium, let us put that to a good use".

      They can open up some of the inventory to auction, and any monies over standard pricing will go to a charity. It could be Childs Play, AbleGamers, Extra Life, or a mix of them.

      So those willing to p

    • Because they want these consoles to make it into as many hands as they can and they sell them at a loss because they know they'll recoup it on the licenses from 3rd party developers.
    • by gweihir ( 88907 )

      Why the heck haven't they done this yet?

      Simple: They are playing a long game. They do not want to piss of their customers now. They also may want to make it not too attractive for new competitors to enter the market.

      • They also may want to make it not too attractive for new competitors to enter the market.

        What new competitors? The chance that a new one will arise given the current chip shortage is roughly zero. The last company that tried to come up with their own high-end GPU was Intel and it turned out to be shit and they canned it.

        • by gweihir ( 88907 )

          They also may want to make it not too attractive for new competitors to enter the market.

          What new competitors? The chance that a new one will arise given the current chip shortage is roughly zero. The last company that tried to come up with their own high-end GPU was Intel and it turned out to be shit and they canned it.

          And that is just it: There are no new competitors, which means that either there was no such threat or their strategy is working. But with a lot higher prices, this could change. There are quite a few people sitting on heaps of money and looking for a way to invest that. Sure, nobody would have anything in a few years, but some are willing to play a long game and with TMSC everybody with the money has access to high-end chipmaking.

          That Intel cannot hack a GPU is a separate issue: Intel has fast but otherwis

    • by tlhIngan ( 30335 )

      Because manufacturers want to get them into the hands of gamers at a reasonable price.

      The console game market is dependent on marketshare. Release an overpriced product (like the Xbox One) and people don't buy it and you suffer long term economic consequences, as seen by the underperformance of the Xbox One, and it carries on to the Xbox Series X.

      So the key goal is to get it in the hands of as many people as possible. It's why there was a game of console chicken played last year where Sony announced the PS

      • Because some people have a really long memory of (true or perceived) slights.
        Let's say Microsoft would be doing a "here's a $500 (recommended price) console which you can't find on shop shelves. You can buy it from us directly at $1000".
        Some people, or some of the really vocal ones (ahem "influencers" ahem) would not buy Microsoft for generations (of consoles, that is).

    • by Luckyo ( 1726890 )

      They already are. Container loads of the stuff have been "found" in China going to ethereum farmers. And that's just a tip of the iceberg.

      Problem is, last time they decided to cash in on the crypto craze, they had one of the worst market crashes when it ended. So this time, they're trying to mitigate by selling at least some GPUs to actual gamers, to keep the gaming PC scene alive until crypto boom ends, hoping that gaming demand stays even after boom is over. But that means that the only people who can aff

      • I don't know how long the GPUs will be able to offer incredibly better results than previous generations.
        I mean going from VGA resolution (640 x 480) to SuperVGA (800x600) to "HD ready (720p) and even to FullHD (1080p) was quite the improvement in perceived pixel size (screen size improved also, from the 14" CRT -13.1 visible common for VGA resolution to 15 inch -14 visible of CRT monitors, to LCDs of 17, then 20, 22 and 24 inches FullHD which seem common now).
        However, there doesn't seem to be much left in

        • by Luckyo ( 1726890 )

          Ray tracing is likely one of the reasons for this. It offers another decade or two of "improves in a meaningful way every year".

  • Fuck Dillon (Score:5, Funny)

    by TsuruchiBrian ( 2731979 ) on Wednesday September 29, 2021 @02:32PM (#61845463)
    I hope he fails math.
  • by tiananmen tank man ( 979067 ) on Wednesday September 29, 2021 @02:55PM (#61845549)

    And I should/want to care because?

    • You should care. You should remember this person, and every time you find someone named Dillon you should punch him really hard in the balls, just on the off chance that this was the Dillon who was scalping GPUs during a pandemic.

  • let's keep a little perspective here

    this isn't about keeping food from starving infants.... it's about finding market value for luxury/recreational equipment and scalping only works 'cause people purchase at that level instead of just 'going without'; generally speaking, we're a culture that values convenience over principles quite often

    the kid is leveraging some supply chain hiccups and making some $$$; more free time helped that, less time doesn't; msmash, will you cover the plight of the mask, hand c

    • by Junta ( 36770 )

      It's making a product into essentially an inflated traded commodity. It doesn't help the manufacturers at all, their stock goes away either way, and they get the same amount, and the scalpers just gouge, and are often gouging each other too. With scalpers scalping from both the suppliers and from each other you don't find market value, you just gouge until the bottom falls out.

      • by Xenx ( 2211586 )

        It doesn't help the manufacturers at all, their stock goes away either way

        That's a tough one. The scalpers drive news and potentially increase demand. Some people are more willing to buy one, if/when they find one at retail prices, just because of the high demand. I know people that were leaning against a purchase, until they were presented an opportunity to buy one at retail, and felt they couldn't risk losing out on it. Heck, I've done the very same with things in the past. With that said, scalpers jacking up prices means that those consumers have less money to spend on games a

    • He's creating more efficient markets, he's responsible for maintaining supply, otherwise there's no product at any cost /ducks

  • by enriquevagu ( 1026480 ) on Wednesday September 29, 2021 @03:05PM (#61845583)

    Parasites abusing the situation.

  • Look, if you want to scalp electronics, fine. When you're not in my classroom.

    I taught fully virtually for almost 18 months (because COVID, of course).

    I'm back in person now, but I use computers and phones as little as possible. The benefits are simply not there for students. Yes, access to information is amazing, but not if you're lacking the discipline to use it properly. I have a lot to manage, and whether or not you're using your laptop for appropriate work is not going to be something I waste cognitive

    • by mysidia ( 191772 )

      as a teenager you're not in a position to make a decision about whether or not you'd like to do that.

      Speaking about teenagers not being in the position to do things... People under 18 are minors and lack something called the legal capacity to bind to a contract; there is a bit of a problem with a teenager somehow committing a large amount of funds to the purchase of items -- They can't legally enter that transaction in the first place; meaning somehow they are acting fraudulently by having an account wit

  • by PPH ( 736903 ) on Wednesday September 29, 2021 @03:26PM (#61845683)

    When I was in school, we'd have to cut class and sell dope in the parking lot. In snow drifts three feet deep.

    Now stay off my grass (lawn)!

  • How is this news, let alone news for nerds? I hope the IRS comes knocking on his door. Is that $10k/month profit or revenue? Perhaps he doesn't know the difference.
  • Hold on.. (Score:4, Funny)

    by Junta ( 36770 ) on Wednesday September 29, 2021 @04:00PM (#61845835)

    I need to write a bot to go buy the smallest violin to play for this guy..

  • Wouldn't a profit "exponentially higher" than 10K a month be...100 million a month? I seriously doubt this kid is making that much, no matter how well he's doing.
  • with a very rusty and running chainsaw.

  • The Simpsons feel more real with every passing day

  • Humans compete for toys and that is all GPUs are to the recreational market. Toys are not a need and like any other toy if someone outbids you then too bad, so sad and tough shit.

    Those unhappy with competition should consider doing something useful with their money instead. Business is about business so the coin miners and scalpers are actually doing something MORE positive with their capital than wasting it on toys like their customers do.

    • No, the coin miners and scalpers are not doing anything more "productive", they are parasites, either destroying the environment in a very literal sense in the case of the coin miners and just being complete douche bags and scum in the case of scalpers. They provide no benefit or real service to society, humanity or the planet.
      • They benefit themselves as does any other businessperson, and they benefit their customers or else their customers would not value their products!

        Bitcoin and video toys have value. You may not LIKE them but in that case you are free not to pay for them. I don't buy video toys or bitcoin, and remain undisturbed by those who do.

        The craving for toys is laughable. Fools and their money are soon parted.

        • by jm007 ( 746228 )

          if I've gone thru the trouble to follow your plan to use my capital wisely, can I then spend my money how I want? maybe a toy or 2? does my buying toys help another business out? maybe in a way, I'm doing something of value by helping them... dunno, just thoughts from a fool with money

  • Dillon has choices to make.
      Take the hit and apply his efforts to school work in order to advance his academic knowledge,
      Quit school and do this job FT, or
      Enrol in an external type of high school

    Simples.

  • Fuck 'em. And fuck this "Dillon" in particular.
  • And how is this morally different from buying & selling stocks or BTC or any reseller / dealer sometimes giving discounts & sometimes not ? Or flipping real estate ? Leaving a job / contract for a better paying one ? Airline /Hotel pricing ? Aggregators ?

    The manufacturer has already decided not to hike price makes them more money, the various consumers have already decided what price they will buy or pass.

    And here's a kid using brains & hardwork and taking a risk on his stock to make money like

  • We need a separate batch of punk kids to beat down punk kids like this by subverting their bots and tricking them into buying fake listings. Then the market will correct itself.

  • He can afford an extra laptop. Low contrast dark theme, he's got young eyes...

  • Yeah, it's greed, and yeah people who scalp electronics, or show tickets, or whatever are schmucks. But take it from a Boomer of significant age: this shit has been going on in one sector or another since forever.
    Example(finally getting to the cars part) - when the first gas price panics hit in the late 70s, smaller and more efficient vehicles were in high demand. The dealers pumped up the price in several ways, such as only selling with "optional" features added, and even putting the infamous "DAV" co

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