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Retailers Respond To HDD Squeeze By Limiting Purchases, Raising Prices

SKYMTL writes "With Thailand experiencing its worst flooding in generations, component manufacturers have been especially hard hit. The trickle down effect is having a huge impact upon hard drive manufacturers in particular. Retailers have responded by drastic price increases and even limiting hard drive purchases to 1-2 drives per person."

40 of 282 comments (clear)

  1. Price Spikes by Anonymous Coward · · Score: 2, Interesting

    15%-30% price spikes? The 2TB drives I bought on Tuesday increased 46% in price (from $80 to $117) and not too long before them the had them on sale for $69.99.

    1. Re:Price Spikes by ackthpt · · Score: 2

      15%-30% price spikes? The 2TB drives I bought on Tuesday increased 46% in price (from $80 to $117) and not too long before them the had them on sale for $69.99.

      So much for my plans of system upgrade any time soon.

      I can wait.

      --

      A feeling of having made the same mistake before: Deja Foobar
    2. Re:Price Spikes by Xemu · · Score: 5, Insightful

      Classic PR tick to fake scarcity to make a bad deal appear better than it is. 99% of customers would only buy 1 anyway.
      It means that they've changed from hi-tech marketing to commodity marketing like your grocery store always uses.

      --
      Tell your friends about xenu.net
    3. Re:Price Spikes by fuzzyfuzzyfungus · · Score: 2

      Given how quickly online retailers can adjust prices(essentially limited only by the speed at which the factors that control pricing decisions change), I'm guessing that they are either selling enough drives to be satisfied with the situation, or simply cannot afford to sell them any more cheaply, because of upstream price increases.

      Unless you have absolutely no overhead, and everybody has some, moving zero product isn't a situation you shoot for. Moving less product at higher margins is certainly a possibility, so that can't be ruled out on theoretical grounds; but it seems incredibly unlikely that the retailers have stopped moving stock entirely.

    4. Re:Price Spikes by maeka · · Score: 2

      Not to mention that since they already bought the drives they are selling now, the price hikes are gouging.

      That's not how pricing works.

    5. Re:Price Spikes by roman_mir · · Score: 2

      I would go easy on him, he doesn't really know anything.

    6. Re:Price Spikes by optimism · · Score: 5, Informative

      ...since they already bought the drives they are selling now, the price hikes are gouging...

      No, they're simply anticipating and spreading out the damage. This is microeconomics 101, supply & demand.

      Let's say you're a big retailer who sells 10,000 drives per month, buying them for $70 each and selling for $100 each. You make $300,000 a month selling those drives. That revenue pays the salary and benefits for a couple of dozen employees.

      Then the manufacturer tells you that, due to factory damage, they can only supply you with 2000 drives per month for the next few months. If all prices remained the same (which they probably won't; the manufacturer will raise your wholesale price if they can), you would lose $240,000 of your monthly revenue.

      Now, your market research tells you that there is sufficient demand to sell 2000 drives/month at $200 each. You will still lose $180,000 of your revenue every month, due to lower volume, but the volume is now constrained by your supplier, not the market. Bumping the price saves you $240,000.

      So you mark up the price on all of your existing stock now. And you still lose heaps of revenue until the manufacturer gets back up to speed. Might even have to fire a few employees to cut costs.

    7. Re:Price Spikes by demonlapin · · Score: 4, Interesting

      If the industry is managed in such a way that they can't buffer a few weeks of supply lag

      Pretty much the entire world works this way now. It's called just in time manufacturing, and it is one of the many efficiencies that enabled Toyota and Honda to ride roughshod over Detroit in the 70s and 80s. It's central to Wal-Mart's profitability. You save money by not having large stocks on hand - you don't have to pay to warehouse them, and you're not stuck with a large stock of unsellable items when you change the underlying product.

    8. Re:Price Spikes by Z34107 · · Score: 5, Insightful

      Mirroring is the easiest form of backup.

      *giggles*

      --
      DATABASE WOW WOW
    9. Re:Price Spikes by Tubal-Cain · · Score: 2

      Probably something about RAID not being a proper backup solution.

    10. Re:Price Spikes by kylemonger · · Score: 4, Informative

      Using disks for backups is fine, using RAID is not. It's not a very durable backup if an errant delete command / virus / lightning strike would wipe both copies your data at the same time.

    11. Re:Price Spikes by Festering+Leper · · Score: 2

      The WD 2TB drives that NCIX were shipping on Tuesday show a manufacturing date of June 23, 2011. I find it a bit of a stretch that the almost four months supply of drives have been sold in three days time. Even if I am incorrectly estimating the size of the pipe neither of us can deny there are cargo containers with drives in them (all with pre-flood dates) still on their way to destination ports all over the world (cargo shipping takes around 25 days from Malaysia to the USA). If we haven't used up what is coming down pipe then there shouldn't be 'shortage' pricing. At pre-flood consumption rates there will be no true shortages in North America for at least three weeks. So, yes, I would agree that retailers (or whoever changed the prices) are gouging at the moment.

      --
      if you want people to think you know what you are talking about, just put ".com" at the end of everything you say.com
    12. Re:Price Spikes by PopeRatzo · · Score: 2

      No you haven't. What you've seen is a 50% drop in futures contracts for West Texas Intermediate (WTI) which means very little in terms of actual crude or product supply.

      Well, the spot price didn't go down 50%, but it did go down over 40%.

      So if the futures contracts are so disconnected from actual price and supply, can we agree that they cannot serve their function and do nothing more than provide a legal skimming operation or fixed casino gambling? That they are actually harmful to a functioning market?

      --
      You are welcome on my lawn.
  2. Awesome! by Capt.DrumkenBum · · Score: 2

    For once in my life I bought before the prices went up. :)
    I just bought a pair of 2TB drives for storing all my "Legally acquired media files." ;)

    --
    If I were God, wouldn't I protect my churches from acts of me?
    1. Re:Awesome! by Anonymous Coward · · Score: 5, Funny

      Well, I just "bought" a pair of 2TB drives for storing all my legally acquired media files.

    2. Re:Awesome! by Anonymous Coward · · Score: 5, Funny

      And "I" just bought a pair of 2TB drives for storing all my legally acquired media files.

    3. Re:Awesome! by cababunga · · Score: 2

      You should sell it while it's high.

    4. Re:Awesome! by Anonymous Coward · · Score: 3, Funny

      And I just bought a "pair"* of 2TB drives for storing all my legally acquired media files.

      * For values of "pair" sufficiently close to 1.

    5. Re:Awesome! by Anonymous Coward · · Score: 5, Funny

      Well I just bought a pair of "2TB drives" for storing all my "legally" acquired "media files".

      ~ Papa Lazarou.

    6. Re:Awesome! by jittles · · Score: 2

      You should sell it while it's high.

      I make all of my storage media pass a drug test before I will even buy it.

    7. Re:Awesome! by phantomfive · · Score: 2

      " " " " " " " " " "


      lameness filter Filter error: Your comment looks too much like ascii art. Please use fewer 'junk' characters.

      --
      "First they came for the slanderers and i said nothing."
  3. Price discovery make distribution efficient by roman_mir · · Score: 4, Insightful

    This is a good example of how raising prices works to distribute whatever resources in efficient manner, allowing those, who truly need whatever the resource (HDDs in this case) to come up with the largest bid on it, which means that the resource was most needed for that situation. It definitely beats artificial rationing.

    1. Re:Price discovery make distribution efficient by roman_mir · · Score: 3, Informative

      this is artificial scarcity that you are talking about, because most of the problems in places like that are government (or whatever passes for a government) created. There are no free markets there, so there is no real price discovery, the places are used for their valuable mining resources most likely and the economies are not allowed to grow and improve because certain power brokers get their hands upon those economies by proxy and endorse various dictators and sell them cheap weapons to hold the people there hostages.

      What you have here in your comment, is basic misunderstanding of economics and politics.

    2. Re:Price discovery make distribution efficient by billcopc · · Score: 2

      This isn't efficient distribution, this is gouging. There are other factories in the world, the dealers are simply taking advantage of a natural disaster to arbitrarily hike prices.

      I was going to buy a stack of hard drives for a new server build, but now I'm going to wait it out. My supplier is not going to see a single penny from me for hard drives until this bullshit goes back down to normal. Since the majority of my sales consist of white-box file servers, that means they're losing out on about $20k a month. Maybe not a huge amount, but I'm just one guy. The Dells and HPs of the world will also apply pressure a thousand times harder than little ol' me, which means this gouge will not last very long. I give it a month.

      --
      -Billco, Fnarg.com
    3. Re:Price discovery make distribution efficient by Bacon+Bits · · Score: 4, Funny

      What you have here in your comment, is basic misunderstanding of economics and politics.

      Welcome to Slashdot!

      --
      The road to tyranny has always been paved with claims of necessity.
    4. Re:Price discovery make distribution efficient by sjames · · Score: 2

      Efficiency and progress is ours once more
      Now that we have the Neutron bomb
      It's nice and quick and clean and gets things done
      Away with excess enemy
      But no less value to property
      No sense in war but perfect sense at home:

      The sun beams down on a brand new day
      No more welfare tax to pay
      Unsightly slums gone up in flashing light
      Jobless millions whisked away
      At last we have more room to play
      All systems go to kill the poor tonight

      Gonna Kill kill kill kill Kill the poor:Tonight

      Behold the sparkle of champagne
      The crime rate's gone
      Feel free again
      O' life's a dream with you, Miss Lily White
      Jane Fonda on the screen today
      Convinced the liberals it's okay
      So let's get dressed and dance away the night

      While they: Kill kill kill kill Kill the poor:Tonight

      With thanks to the Dead Kennedys.

    5. Re:Price discovery make distribution efficient by j00r0m4nc3r · · Score: 2, Insightful

      This is definitely gouging. There is no supply shortage yet. Retailers are hiking prices on the anticipation of a shortage, which may or may not come to pass. There is a definite difference.

    6. Re:Price discovery make distribution efficient by Ichijo · · Score: 2

      There is no supply shortage yet. Retailers are hiking prices on the anticipation of a shortage...

      There is no shortage because retailers are hiking prices. The price mechanism is how a free market efficiently allocates limited resources.

      If there were a shortage, it would be because the price is set below the going rate determined by supply and demand. If you don't want a shortage, simply raise the price as necessary to prevent the shortage. This is what the retailers are doing.

      --
      Any sufficiently unpopular but cohesive argument is indistinguishable from trolling.
    7. Re:Price discovery make distribution efficient by roman_mir · · Score: 2

      They aren't trying to make sure everyone gets a drive.

      - right, that's NOT what I am saying.

      I am not saying that a store owner is interested in some form of 'fair' distribution. I am saying that price discovery mechanism built is the principle, which will sort out the ordering of things, and it will figure out who is willing to pay how much for the drive, which allows those, who really need the drives to have access to them by cutting off those, who don't really need the drives bad enough to pay the premium.

      This is not about some conscious decision on the part of store owner to makes sure 'everyone gets a drive' - this is not even possible with a shortage of drives. This is about store owner minimizing his losses and maximizing his gains, and the market acts as a discounting mechanism, which means the market ANTICIPATES a drive shortage and spikes the prices trying to find the balance, where people are still buying, so drives are still moving but the stock isn't emptied all at once by some third party, who wants to make the market by opening a secondary market (buying drives low from the store and selling high on the corner.)

      My point earlier was that artificial scarcity added to the price hike only indicates that the store owner didn't discount the potential shortage enough, didn't raise the prices high enough to prevent a run on drives, so he is engaging in a worthless activity of trying to limit number of drives sold per person (maybe the store owner has different information than the buyers, so he actually wants to get rid of stock, and the limit thing is just to force the market into a more panic mode, but it's not a useful behavior for one store owner to engage into, it's better to raise the prices more).

      As to 'goodwill' and all that, it's pure nonsense. Boycotting a store owner because he had higher prices for drives when there was a shortage (perceived or real) never works.

    8. Re:Price discovery make distribution efficient by roman_mir · · Score: 3, Informative

      I'm still not seeing how this isn't screwing the poor people.

      - what do you want? Confiscation and distribution of products that were created to make profit based on your idea of what is 'fair'? Why do you think poor should be able to get something they can't pay for, I don't follow?

      The hard drives they need for their own 'productivity' are being redistributed to the rich.

      - the supply/demand curve now meets at a higher price point, this cuts off those, who don't particularly need the drives at those prices, and it still allows those who really need the drives to be able to get them.

      If prices are not raised here is what happens:

      1. Anybody gets a drive at the old lower price, the stock is quickly emptied and those who need it more don't get it.

      2. The stores are then making the profit for some of the time as long as the stocks last, all of a sudden there is a shortage and the stores can't get more drives. If that's the case, then you have a store that gets destroyed, which is also not an optimal situation for the distribution infrastructure. Instead the store raises the price, it collects more profit per drive, but the drives last longer in the store. If the shortage is real, the store will be able to cover the lower product turn over with higher prices and keep the store open, not have to fire people, search for lower rent, cut services, etc.

      The point is that just because somebody is 'poor' doesn't mean they have the moral grounds to get some scarce resource at a cheaper price. When new plasma TVs came out the poor couldn't afford them at all! The initial prices were very high, only super rich and companies could buy plasma screens. Eventually the market sent signals that there was more demand, the efficiencies were reached, more production was brought on line, more competition, and prices fell eventually to the level where everybody could afford it.

      It's the SAME situation in REVERSE. But this is a good thing that it works this way, it creates a queue, it sends signals to the manufacturers to bring up more production on line, and this eventually will result in even lower prices than originally were there.

      This potentially makes them poorer, and nullifies attempts at being more productive.

      - you can just take on faith that those who are richer are more productive than those who are poorer. Those who are richer generally invest into more business capacity, create more products, hire more people, etc., they are more productive just by the fact of having more savings and investments. Of-course it is desirable from every perspective that being richer should be rewarded more than being poorer.

      Why? Why is it not important whether something is fair or not?

      - because it's YOUR definition of fair? For example I disagree with it. You base it on some weird assumptions that poor people deserve more for some reason, I personally do not ever believe that for a second, never believed it in my life. I have good reasons to. Regardless of MY reasons - I disagree with you on what is FAIR. Do you understand that?

      AFAIC the only fair outcome is the one that is NOT based on violence of gov't intervention, so it's a market based outcome, which always maximizes efficiencies and productivity, and I prefer productivity over moral indignations based on personal preferences of what 'fair' is.

      I like a more efficient, more productive market. I like having access to more choices, more goods, more competition, lower prices. Productivity brings all of that about and moral indignations and gov't violence only shares one trait - poverty.

      As to your last point - those economies, that have political systems that are corrupt because they are growing based on this idea, that they can distribute and enforce their idea of 'fairness' are now pretty much all bankrupt and they are only going based on the good grace of the economies that are almost unregulated and very productive. This proves my point.

  4. Can you say gouge? by Anonymous Coward · · Score: 4, Insightful

    Jesus titty fucking christ.
    From 75 to 100 dollars in one day. http://www.newegg.com/Product/Product.aspx?Item=N82E16822136697

    Its like the industry is begging for SSDs to take their market. /begging/

    This isn't supply shortage it's price gouging. The industry has consolidated to four players, and one of them only makes laptop drives. Expect more of this shit in the future. Expect an SEC probe too and finding of price fixing, followed by a slap on the wrist a decade later. Fire in a dram factory anyone? Fuck me.

  5. Re:Opportunity by ackthpt · · Score: 2

    What am I bid for this classic 5 MB 5 1/4 Full Height drive?!? Muah ha ha ha haaaa!

    Of course I'm kidding - it's a collectors item!!

    --

    A feeling of having made the same mistake before: Deja Foobar
  6. Finally by woodhouse · · Score: 5, Funny

    My scheme of buying computer parts to sell them on at a later date finally pays off.

  7. Not quite how commodity speculators work by sirwired · · Score: 2

    If you were a commodity speculator, you'd have placed an order for way more than one hard drive a month ago for later delivery, and you'd be selling the right to have the billing and shipping information changed. You would never, yourself, actually have the ability to pay for, accept delivery of, or use, those drives.

  8. Also, people are dying by Baloroth · · Score: 4, Insightful

    Over 300 people have died (not huge, I know, but still not small... and the fact that I can say with all honesty that 300 deaths seems small says volumes by itself), homes and lives are ruined, ancient temples are threatened... and what Americans are most worried about is the fact that they have to pay an extra 20-30% for hard drives. Just to put this in perspective. TFA does at least have the decency to issue a "our hearts go out blah blah" at the end.

    Just watch, the next story will be something about Occupy Wall Street and people protesting those huge companies and all the cheap goods they make. Really, Americans (and most of the rest of the world) really need to look closely at the consumerism that has overcome our culture to the point people dying seems far less significant than money. I realize this is a tech/ nerd site (so it wouldn't focus on the deaths anyways), but still, this is the second story about this with no mention (as far as I remember) about all the other effects this flooding is having.

    --
    "None can love freedom heartily, but good men; the rest love not freedom, but license." --John Milton
    1. Re:Also, people are dying by girlintraining · · Score: 5, Interesting

      The Occupy protests are centered around the fact that the wealth distribution in the United States is ranked about the same as Uguanda; Half the wealth in this country is controlled by approximately 1% of the population, which is the reason for the slogan "We are the 99%". Occupiers have been protesting financial institutions, especially banks.

      Now if you hadn't had gone and shot your mouth off about something you clearly don't know anything about, I might have had a bit more sympathy for the rest of your argument. However, I'm going to have to mercilessly gut it now because I am the 99%, and I also have a healthy respect for capitalism -- within limits.

      300 lives is nothing. About 120 die every day in auto accidents. Americans are more worried about gas prices there too. Is that because they're heartless? No, it's because those 300, or 120, or a hundred million lives are abstract people. I've never met them. You haven't met them. Nobody who reads this is very likely to have met them. They lived in total obscurity and then some natural disaster came along and went squish, and that was that. They have had little to no bearing on my life, or yours, or anyone's here. But the price of those goods -- that is something tangible, noticable, and therefore real.

      You're bitching about human nature here, man. You're like Bono from U2. Nobody gives a damn about them and they shouldn't. They can't. We all got only a limited amount of time on this earth, and a limited amount of resources, emotional or otherwise. And the overwhelming majority of people are going to invest their emotions in things that are real, tangible, and close to them.

      Now next time you feel like trying to go and take the moral high ground, don't piss on someone else's back and then say it's raining, mmkays?

      --
      #fuckbeta #iamslashdot #dicemustdie
  9. Re:The tipping point to SSD's? by Bucky24 · · Score: 2

    I suspect it's still a lot cheaper to buy a 1 TB hard drive than a 1 TB SSD (or 1024 GB SSD I suppose), if they even exist. But you do have a good point.

    --
    All the world's a CPU, and all the men and women merely AI agents
  10. Day late.. dollar(s) short by nurb432 · · Score: 2

    And i needed a couple of new drives.. i guess i will just wait.

    --
    ---- Booth was a patriot ----
  11. Re:Hmm... by Just+Brew+It! · · Score: 2

    In name only. TigerDirect acquired the rotting corpse of CompUSA when they went tits-up and closed most (all?) of their stores a few years back. So CompUSA is effectively TigerDirect's B&M division now. They've been (re)opening CompUSA stores in a few areas (mostly Florida, Texas, and Illinois) over the past couple of years; the one near me used to be TigerDirect's Chicago-area outlet store (so they basically just changed the sign on the front from TigerDirect to CompUSA).

    The store itself is actually kind of ghetto -- it tends to be disorganized, the customer service ranges from mediocre to awful, and some of the stuff they're selling is junk. But if you know what to look for (and what to avoid!) you can get some decent deals; they're also really handy for those "geek emergencies". The local one is on my way to/from work, so fairly convenient.

  12. No kidding by Sycraft-fu · · Score: 2

    I dislike when people try and pretend that they feel the loss of every human life with the same tragedy. No, you don't. If you did you'd never accomplish anything because when you lose someone close to you it is amazingly tragic, and people die literally every second for all kinds of reasons. You just don't feel the same. The closer someone is to you, the more it matters.

    The reason we feel for large tragedies is because of the scale. When hundreds of thousands die, we feel the scale of that, even if we knew none of them. It is that so many die.

    As you said, 300 lives lost is nothing. That doesn't mean each individual life didn't have a great deal of value to their communities, it means that on a global scale it is trivial. WE lose more than that every day globally and you don't like about it. Heck we lose more than that to natural causes in short order and you don't think about it.

    Don't pretend like the loss of 300 lives matters to you because it doesn't. It matters to the friends, families, neighbors, communities, etc of those people lost.

    When an old man in a country I've never been to who I don't know dies, I am not even aware of it. Even if you told me my response would basically be "Oh." When an old actor dies that I know from the movies only I think "That's too bad," but not a whole lot more on it. When a friend's grandpa died that I had met, I was saddened. When my grandpa died, I was quite broken up.

    It is all a matter of how close I was to the person, how deeply they touched my life. That is how everyone works, how we must work. As the parent said, we have a limited amount of emotional reserves. We cannot mourn every loss to the core of our being.