Proposed Bill to Outlaw Bots from Scalping Online Goods [pdf]

In the case of a band, openly pricing out a bunch of your loyal fans isn't a great idea.

Manufacturer sells to distributor who sells to retail. Retail is constrained by pricing agreements. They can't sell at a higher price because the manufacturer directs the retail price. Scalpers are really just improving market place efficiency, but manufacturers know that demand is variable so they don't want to strictly limit products to the wealthiest consumers because there is plenty of data that doing so slows wider adoption. It's all about marketing and we know that right now affordability and limited quantity is an ideal mix.

I thinks some retailer don't want to irritate they're customers. Microcenter has signs all over the store indicating one video card per customer per month. They want to sell the other components.

I'm always surprised that online sellers don't just set up a queue for people who wanted to buy. (thank you steam and steam deck)

Best Buy is allocating PS5s to people in their Best Buy Club... which of course is $200/yr.

https://arstechnica.com/gaming/2021/10/best-buy-offers-exclu...

People tend to shoot the messenger when market forces are not in their favor. Any more profit that a retailer gets from raising prices on this tiny part of their inventory could get them more than that amount of flak for raising their own prices. I think many retailers are happy moving 100% of their product at normal margins while letting scalpers take all the flak for price increases. Graphics cards are just one item of many on the shelf for most retailers.

I think you are missing the risk. The supplier could raise prices but there comes a point when demand slows and now the retailer is stuck with inventory. If every one else is selling below MSRP and you are selling for double, you won't get business until everyone else is sold out. Most retailers and wholesalers want a certain amount of basis points. They simply want to sell everything for X% more than they paid. They don't want to be in the speculation game. Graphics cards is mostly a function of re-purposing the supply for something it wasn't really intended for. Look back at beanie babies when they were a craze. As a retailer, you wouldn't want to get stuck with inventory you couldn't even move at a loss. I do agree that they could be a little more aggressive with selling at MSRP if demand is high and drop back to "sale" prices if demand slows. I think there are probably some legal things for some products that you can't sell for over MSVP or for less than some minimum advertised price. Additionally, some of these products can be seen as "loss leaders" in the sense that they become a trusted source for "good deals".

The problem with just raising MSRP is that their pricing is far too transparent to do that. The brand damage caused by getting ahead of scalpers would be higher than the consumer surplus taken. Not to mention that, for at least some classes of goods, raising prices in response to demand is considered gouging and prohibited by law. Furthermore, for at least some of these goods[0], using a market-clearing price would actively harm other business goals.

In the example of game consoles, Sony and Microsoft aren't trying to sell you a PS5 or Xbox Series X because it makes them money. In fact, they take a loss on them even in "normal" market conditions. The point of the console is to lock you into a software ecosystem that they can charge developers a 30% tax in order to access.

Most of the money made from selling graphics cards is not by selling individual cards in retail packaging. The DIY and upgrade card markets are actually quite small. Most of the money comes from OEM design wins, system-integrator sales, and so on - markets in which the consumer is buying a fully-functional computer rather than parts.

What seems to have ultimately happened is that companies have used the introduction of new products to set new, higher prices. For example, Apple's 2021 product launches have consistently increased pricing over their replacements from prior years.

[0] notably game consoles, though merchandise like the Tickle Me Elmo would also qualify

There is also Customer Lifetime Value.

By raising prices, you may lose some of your customers, who unfairly penalizes the retail/manufacturer especially when politicians (and reddit and HN) happily side with sub-optimal fixed price solutions.

Pitchforking is real and very dangerous in the modern era.

So, retail / manufacturer have to let true marketplace like scalpers to provide the needed correction (albeit inefficiently).

If only we could use software to query the text of the bills.

It’s not exactly what are you asking for, but the Congressional Dish podcast attempts to cover bills and hearings.

https://congressionaldish.com/

I co-founded a company in this space, although not focusing on summarization, and not targeted at normal citizens.

> I want to watch what congresses law/executive orders do. I don't want to read the laws, or how they work, or any of the details.

The real answer is "No you don't." Most congresses [1] pass a few hundred bills per year, and up to a thousand resolutions, and most of them are completely uninteresting to most people. On top of that, single bills can be omnibus monsters that touch 1000 subjects. That's not even touching executive orders (which are pretty minor), and regulations, which are not. There are usually a few hundred federal regulatory updates per week, which can be thousands of pages.

Jokes about government gridlock aside, the US is very big and the government does a _lot_, it's just that we're to the point where most of it is tweaking very specialized things. It's so much noise that the best way to be an informed citizen is, unfortunately, to find a few news sites you like, because it takes a large team to surface the stuff of interest to the general public.

At the risk of turning this into a news bashing political discussion, I think politico and thehill tend to have good content on congress, and are generally up front about political biases. A quick scan of those every other day will put you far ahead of most people.

All that said, both congress.gov and openstates.org (for state level stuff) offer searching and alerting, and every federal bill that's going anywhere does get a nice summary, although they are fairly verbose. But realistically you need a gatekeeper to sift through the chaff, because there's just too much happening.

[1] https://www.govtrack.us/congress/bills/statistics

More basic than summaries, in my city there is no way to easily view how an individual city council member voted any any particular motion before them. Or even to see a list of the things the council has voted on.

In order to see this information you need to wade through big PDFs versions of the council meeting minutes to find the motions. They are also backlogged by over a year in creating and publishing the minutes.

You should check out the Federal Register

Yeah. They are especially bad around things where you can hold inventory with no penalty for canceling later. Which ends up in a lot of "Why can't we have nice things?" rules later.

I wondered the same - I mean, we've all seen the effectiveness of anti-robocall legislation. All folks will really have to do is avoid using the bot inside the US.

It will just wind up being a bill to show that "we have done things! We passed the bill!"

I would guess the shipping costs would keep a lot of that (though not all of it) in line. It did used to be a big issue when the UPU subsidized shipping from China, but that's gone now.

Many of the US big box sites where bots are a problem don't ship to China... or even Canada.

It might not work well for digital goods, but physical ones are much easier to control.

Edit: and even for digital goods, it would force people away from the most convenient storefronts.

This will just consolidate botting to criminal organizations. I think that’s bad for everyone

Scalping increases MSRP. Removing it would cause it to decrease.

As is so often the case, your "is just" papers over a lot of detail. When a firm sells a good for less than the bid price of the buyer, the marginal value captured by that bidder is called consumer surplus. Firms do this for many reasons: they don't want the reputational hit of running an auction, they don't consider it worth the effort, they don't anticipate a need until after the revealed demand of the market is shown, and by that time it's too late to build an apparatus. Probably others I'm not thinking of.

Scalpers capture this marginal value and in exchange provide the "service" of reallocating some of the goods to the buyers with the highest bid prices. (I put scare quotes around service here because I'm sure many consider it a pessimization.)

If you're a wealthy person, scalpers may actually be good for you, because you don't have to compete with poorer people who have more time to refresh a webpage. You can just buy the good on eBay. On the other hand, it seems totally valid for the government to decide that it is in the best interests of the people that the consumer surplus in the system devolve to actual consumers.

I agree with you that scalping is a symptom of market inefficiency. But I think it occurs mostly when there are further considerations taken into account, e.g. public image and reputation.

For instance everyone knows, including organisers, that some people would be willing to pay large sums for tickets to premium events (concerts, sport, etc) but selling tickets at such price would lead to a public outcry.

We saw the reactions to Uber's surge pricing as well.

It may also be a brand strategy to let products sell out and be reported as being resold at huge prices. It creates a buzz and scarcity that may increase demand further.

There’s a risk that scalpers establish a short-term monopoly over a market.

For example, say scalpers buy all of a particular model of remote control car - they can now dictate the selling price, without adding any value to the market. But of course, the opposite argument is that people will then buy competing remote control cars and the scalpers will have to reduce their prices. Thus they are merely being entrepreneurial and finding an opportunity for arbitrage.

This is one of those timeless debates with no answers. I’m sure Ancient Egypt had scalpers, and people wanted to ban them.

Indeed. This is especially important because if, say, TSMC or Nvidia increase their MSRP's, then they go go re-invest that into additional capacity to solve the supply shortage. Instead, middlemen take the markup profits and have no ability to put that towards additional production.

I do wonder if it's a bit of an backdoor anti-inflation deal thing:

- TSMC/Nvidia boards don't want to raise prices because it might cause rank-and-file consumers to feel like inflation is higher, and there's perhaps fear it could lead to a cycle of increasing across-the-board inflation on wide basket of goods.

- USA/etc offers TSMC/etc subsidies for building additional capacity to make up for the revenue/reinvestment shortfall on keeping artificially low MSRP's.

And then this is a ham-handed attempt to exert some limit on any scalping operation getting "too large" and potentially drive consumer prices down a bit more until the additional capacity (funded by govt. subsidies instead of MSRP) finally comes online.

Is that hypothesis/"mad ramblings" completely unreasonable? It might be. I just really feel that the producers should increase prices and reinvest in capacity, rather than allow middlemen to skim the arbitrage.

This pure economist point of view feels so unwelcome & reductionist. That the market isn't taking every ounce of profit being viewed as inefficiency, this idea that prices must be as high as possible seems like a diseased view to me.

Consumers should have access to things like GPUs at a rate the manufacturer is happy to charge. There's a net benefit to society when supply isn't maximally constrained & exploited. Recently, folks are wondering whether PC gaming is going to be able to survive, when even shitty ass lower-mid range graphics cards cost as much as a console. That would be horrificly sad for computing.

Scalping is usually a short-term monopoly based in a temporary shortage, and it has the same problems (arrogation of consumer surplus and deadweight loss).

> Nintendo should be able to sell the NES Classic for 13k

That’s a somewhat different issue, it’s what happens as the result of a legally sanctioned monopoly (copyright) that has been exploited far beyond any reasonable term. It’s still a monopoly and it’s still bad.

What do you mean? Nintendo could sell the NES Classic for 13k if they wanted to, but nobody would buy it. Companies choose their pricing very carefully, and there are a whole lot more factors than max value on secondary market that go into it. Nvidia is well aware they aren't going to be able to keep up with demand, but if they raise their prices too much people will consider the cards poor value and won't purchase them. Think mac pro wheels. Scalpers operate on a different playing field, and are really just parasitic.

yes there are bots just for this. brands like Nike and Supreme have big problems with this. Some arent even bots they are just people with a browser open, hoping to buying to resell/flip.

its made easier by the fact that so many websites use the same ecommerce platforms which makes one bot work across thousands of sites.

Yes https://whop.com/ very affordable and accessible to everyone

Basically it's the same reason to outlaw robocalling specifically. The point is to raise costs to bad actors enough that some (and hopefully many) get out of the game.

I think there is still a point. Lets think about this from a scalpers perspective.

I want to make as much money as possible. I know there will always be a market for products people can't get on the traditional market. I can clearly identify these ahead of time and spend thousands buying them.

If when I use automated bots to buy, my products then become illegal's aka 'slightly harder' to sell. That might reduce my income.

If I then have to employ people to click the same buttons as normal people click using the same software normal people use, and not circumventing order limits or 1 per person rules. That means I can't get products as easily or cheaply and reduces my profit.

I see two solutions to scalpers. Incentivize or require a demand based market. So that prices shoot way up on their own. (bad for many reasons) or cut into profit margins and restrict overall volume of the people that will create that demand based market legally or illegibly.

I could write up code in a day to take the place of a million humans, plenty of people could. That’s the difference.

The "S" in MSRP is "Suggested"... maybe you'd like "MRRP" or Manufacture Required Retail Price, which some places do have contractual obligations for.

I can't think of too many downsides to making bot scalping illegal, making it illegal to misunderstand demand seems more fraught......unless this is sarcasm.

This sounds extremely dystopian

A simple underproduction (due to waste/risk avoidance or mere strategy) would create more litigation.

Which companies do you think can afford this kind of regulation? The mom and pop shop or Walmart?

Even if you ignore all of that, failure to sell enough sounds like a bizarre reason for a fine and would push the moral expectations of the law everyone has (murder, theft, violence except in self defense) even farther from the actual law of the land. To give you one example of such type of law, look at the subsidies the US taxpayers provide to billionaire sugar producers. You could easily argue that one of the most diabetic countries on the planet should not subsidize sugar, yet it still happens. These types of action lead me (and I expect others) to have a much lower respect for authority and the law

Such as?

The Commerce Clause has been interpreted extremely loosely in recent decades. If you can ban medical marijuana because it might travel across state lines (https://en.wikipedia.org/wiki/Gonzales_v._Raich), you can ban scalping on similar grounds.