Hard drive prices - for those that don't go into General Hardware

[[TW]Fox]

The question was to make a point, of course i know about supply and demand, that doesn't mean it's right, it's nothing more than taking advantage of a situation for profit, the way things should be is if they run out then they run out, you make more, simple.

Since when was a hard drive manufacturer or a computer supplier a charity?

What possible reason do they have to force themselves into a sold-out position when they can manage demand using price?

 

[Reaper 392]

is this going to affect the 1TB OCZ revodrive hybrid drive?

i can see myself recommending that a lot in future builds

 

[contracteur]

The question was to make a point, of course i know about supply and demand, that doesn't mean it's right, it's nothing more than taking advantage of a situation for profit, the way things should be is if they run out then they run out, you make more, simple.

I think you mean profiteering.

 

[Monkeynut]

This might give SSD demand (and as a result supply) a kick up the backside and so speed that up.

 

[ash_scotland88]

told you this a few days ago, think the thread died a death.

 

[darael]

I remember when a 20gb drive was about £80.

 

[spudbynight]

I remember when a 20gb drive was about £80.

I remember when a 20MB Winchester was thousands.

 

[Ash-Lee]

I remember when a 20gb drive was about £80.

I remember paying ~£60 for a 1GB drive.

I thought i would never be able to fill it.

 

[RabbitHutch]

Don't underestimate the efficiency of a corporate machine.

I'd bet that within 2 weeks of the waters receding the factories will be at 90% of their previous capacity no problem.

 

[Radiation]

Since when was a hard drive manufacturer or a computer supplier a charity?

What possible reason do they have to force themselves into a sold-out position when they can manage demand using price?

How is selling them for the same price being charitable exactly?, they make a profit like always, why do they need to manage demand?

 

[[TW]Fox]

How is selling them for the same price being charitable exactly?, they make a profit like always, why do they need to manage demand?

What on earth?

Why DONT they need to manage demand for the products they sell? As a business reaching a stock out situation is bad. You want to avoid this.

Your sales for the day will be nil if you have no stock.

You have 14 Widgets. They sell for £10 each and you buy for £5. You normally sell 2 widgets a day and keep 1 weeks stock in hand. This means each week your sales of widgets make a contribution towards fixed costs of £5. Thats right, a contribution towards fixed costs not a profit.

Your fixed costs are £40 a week.

Your total profit per week is therefore £30.


There is a fire at the only Widget factory in the world. You are told there will be no more widgets for an extra week.

You have therefore two choices.

a) Maintain current sales strategy. After the first week you will reach a stock out situation. You have no stock and cannot sell anything. You've made a profit of £30 in Week 1 but in Week 2 you make a loss of £40. You still have fixed costs but you have nothing to sell as Widgets are out of stock.

Over the 2 week period you therefore make a loss of £10.


b) Realise that the lack of supply for Widgits will mean there is more demand than supply. Make the decision to double the price of Widgits. By doubling the price of Widgits, you will sell only half the number of widgits per week as normal as the increased price reduces the demand. You've already paid for the widgits at the old price so your contribution per unit will increase to £15.

So, Week 1:

Sales: 7 widgits @ £20 per widiget = £140
Cost of goods sold: 7 @ £5 = £35
Fixed costs = £40

Week 1 Profit: £65

Not only have you increased profit but you've also ended the week with widgits still in stock.

Week 2 continues as per Week 1 - so another £65 profit.

Therefore by increasing the price of Widgits BEFORE you incur increased costs yourself from the supplier, you:

a) Avoid being out of stock
b) Avoid the loss you'd have made had you maintained the current price and entered a stock out situation.
c) Avoid making a loss

There.

Thats Economics 101 for you. Thats how it works.

 

[jaybee]

It is laughable tbh. I mean come on... really? Floods in one area in the world and prices double and triple. BS. Why did they all cluster production between all major companies in one area of the world in a potential flood zone? And an earthquake zone. They can hardly just "get back to work" when the floods go away. The factories will have been permanently damaged. Equipment will be damaged. It would be quicker and more financially viable to shift production elsewhere. How about any other country in the world for starters?
I'm not bitter, I got my purchases in before all of this as had early warnings, but I just find it all a bit silly.

 

[ExRayTed]

How is selling them for the same price being charitable exactly?, they make a profit like always, why do they need to manage demand?

Exactly. It's greedy opportunism. That almost every business in a similar position would do the same does not make it morally right. 'Manage'supply, hehe. Why? In case they run out? Oh no! They've made the same profit as they would have done except possibly over a shorter period of time! Gasp!

Floods will clear up and manufacturing will recommence. No-one will be out of hard drives for long. One popular e-tailer had over 1700 500gb hard drives at £80 a piece last time I looked. Why would they be 'managing' supply?

 

[ExRayTed]

Rudimentary business lesson tosh....

Perfect analogy providing every hard drive retailer sells only hard drives. But they don't. Fixed costs remain whether they have hard drives in stock or not, true. However these fixed costs will remain the same if these retailers stopped selling hard drives altogether, because, and here's another economics lesson for you, it is bad business to only sell one computer component.

 

[[TW]Fox]

Perfect analogy providing every hard drive retailer sells only hard drives. But they don't. Fixed costs remain whether they have hard drives in stock or not, true. However these fixed costs will remain the same if these retailers stopped selling hard drives altogether, because, and here's another economics lesson for you, it is bad business to only sell one computer component.

It's also bad business to not sell products priced at the point where demand and supply meet unless you particularly rely on goodwill to sell products, which in a market where price is the main decision maker you often don't.

 

[ExRayTed]

So now it has nothing to do with the widgets thing? It's more to do with good business being balancing your price on where the supply and demand meet? A business has a right to make more of a profit because supply could dry up a bit? Widgets or savvy business acumen? Fox, you seem to be in a muddle

 

[Angilion]

makes me smile, I remember paying £300 for a 100Mb drive.

I can remember making do with 40MB because I couldn't afford anything more. Although 40MB was enough. The 80MB drive I added a bit later seemed like a massive storage capacity. 120MB in total! I'd never fill that much.

I'm going to stop before I say "eh, when I were a lad"

 

[2StepSteve]

FU price hike! I got my room full of floppy disks. Times like this makes me feel good about my floppy disk collection.

 

[PermaBanned]

I can remember making do with 40MB because I couldn't afford anything more. Although 40MB was enough. The 80MB drive I added a bit later seemed like a massive storage capacity. 120MB in total! I'd never fill that much.

I'm going to stop before I say "eh, when I were a lad"

And what can you do now that you couldn't do then?

 

[Angilion]

Back when I built one of my first rigs the price of RAM was insane.

I paid the best part of £250 for 2 gigs of Corsair XMS6400 800mhz DDR2 (from memory).

The first memory upgrade I bought cost me ~£110. 4MB. Yes, MB, not GB. £110 then was a lot more than £110 now, too. It seemed worth it at the time. Quite a performance increase over the 1MB I had before.

The upgrade that really stands out, though, was the £250 I paid for an Orchid Righteous 3D when they first came out ~15 years ago. I phoned a friend gibbering about it, he popped round, saw the demo and went straight out to buy one. He didn't even ask me how much it cost me, just where I bought it. I've never had another upgrade that made such a dramatic difference in performance.