Profit protection against resellers/scalpers.

[cvalue13]

This time it's correct, since it's just paraphrasing evidence that already exists.

-Crissa

interested in your take, though. As I read parts, it seems as inch-deep as might expect:

“ 1. Increased prices for consumers: Scalpers buy Tesla vehicles in bulk and resell them at a markup, which can result in increased prices for consumers who want to buy a Tesla car. This can make Tesla vehicles less accessible and less affordable for some people.”

This appears to be focused only on consumers who pay the scalper’s markup prices? Do we care about them?

“2. Reduced demand for Tesla vehicles: When prices for Tesla vehicles increase due to parasitic profiteering, it can discourage some potential buyers from purchasing a Tesla car, which can lower the demand for Tesla vehicles.”

I don’t know I understand this one. It appears to again focus on consumers who pay the scalper’s markup. If so, it “discourages some potential buyers from purchasing a Tesla car [at above-MSRP prices], which can lower the demand for Tesla vehicles [priced above MSRP].”

ok. So?

“Negative impact on Tesla's brand: When prices for Tesla vehicles increase due to parasitic profiteering, it can lead to negative perceptions of Tesla among some consumers and make Tesla less appealing to potential buyers.”

This one seems uncontroversial (there are consumers that get irritated that Tesla “allows” scalping to happen), but also selective in data (there are other types of consumers for which the hype around the vehicle makes them want one in the first place/more).

Seems uncontroversial that Tesla has to manage customer emotions, regardless of the validity of the basis for those emotions (whether towards to away from the product).

“4. Reduced profit for Tesla: When scalpers buy Tesla vehicles at a low price and resell them at a markup, they are taking profit away from Tesla. This can reduce Tesla's overall profit margin and make it harder for the company to invest in research and development, expansion, and other initiatives.”

This one just seems patently false, or at least begging the exact question asked of it.

Maybe, @Crissa, you can better explicate this for me in the simplified context of the following scenarios (I know you’ll let me know if I’ve accidentally laid out a false dichotomy):

Company A: builds 100 widgets/yr, priced at $1/unit, sells 100 widgets at MSRP to 100 end use customers, Company A earns $100/yr

Company B: builds 100 widgets/yr, priced at $1/unit, sells 100 widgets to 50 end users at MSRP and 50 units to secondary market at MSRP, Company B earns $100/yr (while secondary end user buyers pay $2/unit, for a total of $150/100 units in the full market)

Company C: builds 100 widgets/yr, priced at reverse auction gymnastics, sells 50 widgets at above-expected unit cost ($2/unit), sells 50 widgets at ~expected unit cost ($1/unit), Company D earns $150/yr (end users expend a total of $150/100 units in the full market)

Company D: builds 100 widgets/yr, priced at $2/unit, sells 50 widgets to 50 end users at MSRP, Company C earns $100/yr but has 50 units of stale stock

Obviously, there are other permutations of above outcomes, but the high-level dynamics:

(I) The fastest way to the manufacturing graveyard is being Company D - despite it having the same momentary revenues as Companies A and B (the bullwhip of stranded stock, etc., leading to various poor outcome yr/yr)

(II) Company A has momentary balance of demand

(III) Company B has momentary excess of demand (but believes it a temporary imbalance, and so is cautious to not increase across-the-board pricing and risk becoming Company D)

(IV) Companies A and B made identical revenue off of identical numbers of units, with identical numbers of end users receiving product

(V) Company C made more revenue than either Companies A and B, off identical numbers of units, and selling to identical numbers of end users

(VI) Companies B and C sold to the same number of end users, at identical net cost to consumers in the full market


Seems to me some folks have been asserting that claim (IV) is somehow false, and that (V) is somehow materially more equitable for consumers (since the excess $ goes to Company D rather than secondary market?), l despite the truth it (VI)

I’ve seen no one describe how (IV) is false, or be clear how (V) is more equitable to consumers.

I’ve seen platitudes that (VI) is “better” for the Company, based merely off the observation that $150 in profit is better than $100 in profit. But surveying the world of sophisticated businesses that thrive in environments of demand outstripping supply-at-market-cost, not one of which have adopted some such pricing gymnastics, one might with some humility think those companies have contrary considerations running against the simplistic platitude that “$150 in profit is better than $100 in profit.”

For just one example, anyone here really believe consumers aren’t so fickle as to be just as pissed at the company about auction gamesmanship by the company as they are pissed at 3rd party scalpers the company can’t otherwise control?

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[Coolbreeze704]

I just asked ChatGPT to chime in.

Q:What strategies does Tesla implement to mitigate profit loss from scalpers?

A:
Tesla employs a number of strategies to mitigate profit loss from scalpers.
One strategy is to use technology to track and identify scalpers, such as using IP address tracking, browser fingerprinting, and other methods to identify and block multiple orders from a single individual.

Another strategy is to limit the number of vehicles that can be purchased per person. They also have implemented a referral program that rewards customers who refer friends to buy Tesla vehicles, this way they can ensure that the vehicles are going to actual drivers and not scalpers.

Additionally, Tesla has implemented a reservation system for their new models, which allows them to prioritize and distribute vehicles to customers who have actually reserved one and not to scalpers who try to buy in bulk.

They also have a policy of canceling orders that they suspect to be made by scalpers. Tesla also has implemented a policy of not allowing the resale of their vehicles for more than the original purchase price. This helps to prevent scalpers from turning a profit by reselling the vehicles at a markup.

It's worth noting that despite these strategies, scalping continues to be a problem for Tesla and other manufacturers, as scalpers are constantly developing new methods to bypass these measures.

Q: How is Teslas pricing affected by parasitic profiteering.

A:
Parasitic profiteering refers to the practice of buying a product at a low price and reselling it at a much higher price, often with minimal or no added value. In the case of Tesla, parasitic profiteering can affect the company's pricing in a few ways:

1. Increased prices for consumers: Scalpers buy Tesla vehicles in bulk and resell them at a markup, which can result in increased prices for consumers who want to buy a Tesla car. This can make Tesla vehicles less accessible and less affordable for some people.
2. Reduced demand for Tesla vehicles: When prices for Tesla vehicles increase due to parasitic profiteering, it can discourage some potential buyers from purchasing a Tesla car, which can lower the demand for Tesla vehicles.
3. Negative impact on Tesla's brand: When prices for Tesla vehicles increase due to parasitic profiteering, it can lead to negative perceptions of Tesla among some consumers and make Tesla less appealing to potential buyers.
4. Reduced profit for Tesla: When scalpers buy Tesla vehicles at a low price and resell them at a markup, they are taking profit away from Tesla. This can reduce Tesla's overall profit margin and make it harder for the company to invest in research and development, expansion, and other initiatives.

It's worth noting that Tesla and other manufacturers are constantly implementing new strategies to mitigate parasitic profiteering. However, scalpers are always developing new methods to bypass these measures, making it a continuous challenge for Tesla to control the problem.

How many is a few?

***** said:
It super hard to interact with essays JBee, can you boil it down to one or maybe two salient points?

 

[Deleted member 3316]

How many is a few?

***** said:
It super hard to interact with essays JBee, can you boil it down to one or maybe two salient points?

Don’t blame me for the essays. That bloody ChatGPT just runs it’s mouth off. ?

I thought it provided a nice summary of the chat so far.

 

[Coolbreeze704]

Don’t blame me for the essays. That bloody ChatGPT just runs it’s mouth off. ?

I thought it provided a nice summary of the chat so far.

I had to chuckle at the post but with that said great points and discussion by all.

I will have to say though I am a free market kind of guy.

 

[Deleted member 3316]

This appears to be focused only on consumers who pay the scalper’s markup prices? Do we care about them?

Do you have a diagnosis of sociopath?

Rather than filling the chat with digressive and extraneous hypotheticals why don’t you start with answering the question posed to you at almost every post….

• What value does a parasitic profiteer inject to the transaction between a manufacturer and the end user?

 

[cvalue13]

Ergh… really another **** apologist? I did think more of you Dids…

If you were familiar with how google et al crawl websites and uses available key words to various ends, you’d stop peppering this forum with these types of words

 

[cvalue13]

I didn't know chatGPT could get butthurt.

to be fair to ChatGPT, asking it the identical question, repetitively, always results in a notably dissimilar answer (repetitively) - certainly not a list of answers that appear remarkably close to one’s already asserted previously in the thread

 

[SolarWizard]

Which is so diabolically stupid and unjustifiable, it borders on futile to interact with.

I’ll try again, what value does a scalper inject into the transaction between a manufacturer with a retail presence and an end user?

speeds up wait time for those who can afford to spend money in lieu of time.

 

[cvalue13]

agree, all-around. including the resulting mixed results.

the concern for “money left on the table” also has its mirrored concern of “product left on the shelves.”

no solutions, only trade-offs

 

[Deleted member 3316]

speeds up wait time for those who can afford to spend money in lieu of time.

So you would agree providing a legitimate mechanism to enable queue jumping whilst retaining profit and honouring the queue has merit?

 

[Crissa]

interested in your take, though. As I read parts, it seems as inch-deep as might expect:

“ 1. Increased prices for consumers: Scalpers buy Tesla vehicles in bulk and resell them at a markup, which can result in increased prices for consumers who want to buy a Tesla car. This can make Tesla vehicles less accessible and less affordable for some people.”

This appears to be focused only on consumers who pay the scalper’s markup prices? Do we care about them?

The scalpers don't buy exactly the products consumers want. They don't buy add-on features and services which end consumers would, which means some of these other products have to rise in price for lack of utilization (minimum demand/order to activate economy of scale). They affect the price of the resale market - either lifting by hoarding unused product or dropping by flooding the market. This hurts other end consumers of the product by messing with their ability to turn over their own units. Other end-users are forced to wait longer times for their units, which is also a price cost.

It's not just the scalper's customers who feel the hit. The market does as well.

“2. Reduced demand for Tesla vehicles: When prices for Tesla vehicles increase due to parasitic profiteering, it can discourage some potential buyers from purchasing a Tesla car, which can lower the demand for Tesla vehicles.”

I don’t know I understand this one. It appears to again focus on consumers who pay the scalper’s markup. If so, it “discourages some potential buyers from purchasing a Tesla car [at above-MSRP prices], which can lower the demand for Tesla vehicles [priced above MSRP].”

In markets, perception moves the market more than fundamentals. If people perceive the product as unaffordable, with long wait times, or other undesirable features, they will look elsewhere. Often without ever checking to see if the product is right for them.

As an example, how many people would knee-jerk say the Apple product is just too expensive, before even checking prices, specs, or lifetime costs? Well, a large number of them. The perception of being expensive limits their marketability - whether or not it's true at that moment.

“4. Reduced profit for Tesla: When scalpers buy Tesla vehicles at a low price and resell them at a markup, they are taking profit away from Tesla. This can reduce Tesla's overall profit margin and make it harder for the company to invest in research and development, expansion, and other initiatives.”

This one just seems patently false, or at least begging the exact question asked of it.

Oh, no, it's not false. The scalpers, by having dominated the resale market, then can influence supply. The manufacturer is then caught where it can sell cheaply to the scalper, but cannot sell more expensively to the end consumer, because it has already promised away their inventory.

See also the video card vendors: Scalpers descended upon the various shipments and walked off with the low prices. The manufacturers are now on the hook for supplying these at the price they promised - and the end consumers would get angry if they raised; not to mention they might be sued by their resellers or the scalpers themselves if they tried to renege on the orders or pricing they'd engaged at.

-Crissa

Sorry I've been too busy to respond much this week, the mountains have been hit pretty bad by storms and this weekend I'm doing volunteer work (gladly away from mountains and disasters!)

 

[JBee]

@***** /all

What is the "moral value" of the line, that we need to uphold it at all?

I let people in front of me when standing in line, in nearly every shop there is one. Some people need a CT more than others, some for work, as a replacement car, first car, whilst others just leave the car parked in the garage for a Sunday joy ride.

Further, as presented previously, only a "used" CT has a ROI, and adds value to the environment (by replacing ICE) and to the end user.

Some people who can't afford one at all need a CT more.

So, if you wanted to go about CT allocation "morally" you'd need to factor those variables (and many more) into your construct.

Even then your whole auction process only enables those with enough money "in hand" to get a CT as you won't get a finance company to give you money secured against a overvalued security. You would need to use your house equity etc as security, instantly freezing out renters.

All of which seems morally "dubious" at best, just to gain some control over a unspecified size scalping problem, that I honestly think is being disproportionately presented as a problem here.

We need some data to give the argument any relevance, otherwise its a hypothetical based on pure speculation. And even if it had data the proposed solution is not morally superior if it assumes that those that have should be provided more benefit than those that don't, through a auction process.

Simply, private ownership is a fallacy in itself anyway (you can never really own anything, we are born with nothing, are made of food, and can't take anything with when we die), so why put so much effort into establishing more synthetic systemic control to uphold the illusion? Robotaxi does it better.

Conversely we also don't need to own something to benefit from it (like that stuff you and I breath every second of our lives). In fact most don't even understand who is even paying for what with what. Just like "paying" with fiat currency is not a payment at all. It even says it on the dollar bills that it is only an 'offer' for payment. It's just variation of a promisary debt note that only transfers a debt burden for society to perform economically. Time to get real and to stop using the ideology of dead men to determine our future.

 

[cvalue13]

The scalpers don't buy exactly the products consumers want.

so you too are talking about methodical, bulk, scalpers? As distinct from opportunist buyers who ordered in earnest but can’t pass up the opportunity for a windfall.

That right?

If so - I’m surprised to think such bulk scalpers have much traction or impact. Is there any data around this?

In markets, perception moves the market more than fundamentals. If people perceive the product as unaffordable, with long wait times, or other undesirable features, they will look elsewhere. Often without ever checking to see if the product is right for them.

I agree with the first sentence. I’m not sure I agree with the conclusions. For every customer that is turned off by then perception that the product is unibtainium, there’s a customer that starts paying attention only because it’s unobtainium.

Entire corporations are built on the latter.

In any event, relevant to the present conversation it seems an overblown concern. If Tesla is remotely close to the production numbers suggested, we’re surely talking about a blip of early adopter hype buying. I assume the present discussion is about the first few months of early units being bought above MSRP for clout.

Sorry I've been too busy to respond much this week, the mountains have been hit pretty bad by storms and this weekend I'm doing volunteer work (gladly away from mountains and disasters!)

down then to this more important but: I’ve been watching the SC reels of friends, etc., and had forgotten you’re there; hope you and yours are well, all things considered

 

[Coolbreeze704]

Actually, I was thinking of this as the response to *****. It's painfully obvious that his poll was flawed, and biased. But then after 12 pages of crap he comes up with such a judgmental analysis.

Thank you.

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