Retailers are scamming AMD and Customers

From: Buck-O on Reddit

It’s something not talked about very often, but many major wholesalers sell massive lots of video cards to mining co-ops. Usually to people they know, or family members, etc. They can get the cards at much lower volume pricing, then sell them on in bulk at slightly higher than what they would sell to retail outlets, which is still below MSRP, and walk off with a huge profit. Further choking supplies, and driving up demand, so that when the cards do hit retailers, they are massively over inflated. See: RX 580 the last year.

So if you ever see a Costco rack full of the same make and model of video card and wonder how the fuck they got them in the current market…that’s how. They are getting them from somewhere you can’t.

This brings us full circle to Vega and the Radeon Packs, which have a higher cost on the card itself at wholesale, with the margin being built into the pack items, not the GPU. So they are effectively paying $499 per V64.

Based on a conversation I had today with an old friend who works at a wholeseller I used to do business with, the deal was/is depending on the number of Radeon Packs you order, you would get __ amount of stand alone Vega cards at the regular wholesale price (around $399 for V64, or ~$100 margin). That is where this nonsense about “vouchers” for “cheaper” Vega cards came from. It was all to prevent back channel sales of inventory to miners for sub-retail prices in bulk. That there would be less incentive if they had to pay MSRP through the supply chain. And keep major retailers from simply buying up as much stock as possible, to control the market pricing, as they were capped on total quantity, and then there was the pricing of the Radeon Packs to further dissuade this behavior.

So once these vendors got their inventories, and ran out of their stand alone cards, not wanting to sell the high dollar Packs, they started selling the Pack cards as stand alone, but at the same markup, which was of course $100 higher because it was a Pack card, with the higher price. Which is where this “AMD Price Bump™” bullshit came out of.

Edit: To clarify, based upon a PM I received, regarding the claim that AMD has stopped selling these cards at the wholesale price, and that the $499 MSRP is dead and gone, and part of an elaborate bait and switch, that is a game of semantics. Presently, there are no more Stand Alone GPUs left for inventory that carry that $499 MSRP. All that is left, or was left at the time that statement was made, where cards for Radeon Packs with the $599 MSRP, that were being sold as Stand Alone. So while it is technically correct that “at this time you can’t buy a Vega card that you could sell at $499”, that is because the only cards you can buy are for Radeon Packs, and come with the higher price tag. And not wanting zero margin, the tack that onto the higher price, and maybe a little extra inflation for demand.

Essentially the vendors are mad that they are being forced to pay retail card prices, on Radeon Packs, for access to loose inventory, non-bubdle stand alone GPUs, at regular wholesale pricing. So they are blaming AMD for trying to keep wholesellers honest, and jacking up the pricing anyway, creating the problem this whole ideas was supposed to avoid.

Real rock and a hard place bullshit for AMD. AIBs are pretty much going to be the only saving grace of Vega. Let’s hope GloFo and Samsung can crank the fabs up to 11 and get some chip inventory for them, otherwise it’s going to be really bad for quite a while.

Yes I think AMD should just say this themselves, and yes I think it is absurd that I had to call someone I haven’t talked to in over 3 years to get some basic information about the whole situation. Clearly AMD wants to protect some portion of the supply chain, and not call them out on it. Again, a very awkward rock and a hard place for AMD.

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