Core 9000 series

[Gibbo]

To be fair to OCUK the pricing that distributers are charging currently because of the shortages is extreme. We currently pay in the region £100 + VAT more for an 8700K/8086K than we did a couple of months ago.

There is a grey distributor with stock yesterday (I did not purchase) but they wanted £556 +VAT.
Yes some charge a little more which I am fine with as distributor margin on CPU's can be as low as 0.5% so I hardly blame them if they try to make some additional money in such a cut throat margin industry. But then some simply take the wee wee when they are charging so much more.

If there was no shortage OEM would be around £480 inc. VAT based on distribution making 0.5-2% margin and retail would be about £500, but of course no single distributor is selling this product at 0.5% margin and of course no retailer is selling with 5% margin, but those who just think its the retailer is not the case, all chains of the supply line make additional margin, its only Intel who don't alter the price.

We've got 10k of 9900K on order, so far only 10% of that is delivered or on its way, the supply is crazy tight.

 

[LambChop]

There is a grey distributor with stock yesterday (I did not purchase) but they wanted £556 +VAT.
Yes some charge a little more which I am fine with as distributor margin on CPU's can be as low as 0.5% so I hardly blame them if they try to make some additional money in such a cut throat margin industry. But then some simply take the wee wee when they are charging so much more.

If there was no shortage OEM would be around £480 inc. VAT based on distribution making 0.5-2% margin and retail would be about £500, but of course no single distributor is selling this product at 0.5% margin and of course no retailer is selling with 5% margin, but those who just think its the retailer is not the case, all chains of the supply line make additional margin, its only Intel who don't alter the price.

We've got 10k of 9900K on order, so far only 10% of that is delivered or on its way, the supply is crazy tight.

Then why can Amazon in the US sell for £500 direct to a UK door ?

 

[SiDeards73]

Then why can Amazon in the US sell for £500 direct to a UK door ?

Because Amazon is the largest wholesaler on the planet and has the biggest buying power of any reseller worldwide? Thats why... because they buy direct from Intel and get a better deal than OCUK will get, that is why.

When your the largest marketplace on the planet, you have the largest audience, it stands to reason people wanting to sell their products through you will give you a) priority on shipments of products and b) better deals than anyone else.. because they are able to move much larger volumes of products than anyone else.

Also Amazon logistics are constantly shipping stuff to the UK, so there is already in place a route to get stuff to the UK cheaper. They can afford to swallow some margin as their logistics are already in place to get products here.

 

[beany_bot]

Because Amazon is the largest wholesaler on the planet and has the biggest buying power of any reseller worldwide? Thats why... because they buy direct from Intel and get a better deal than OCUK will get, that is why.

When your the largest marketplace on the planet, you have the largest audience, it stands to reason people wanting to sell their products through you will give you a) priority on shipments of products and b) better deals than anyone else.. because they are able to move much larger volumes of products than anyone else.

Also Amazon logistics are constantly shipping stuff to the UK, so there is already in place a route to get stuff to the UK cheaper. They can afford to swallow some margin as their logistics are already in place to get products here.

or..... Rainforest decided to gouge prices by $30.Whereas UK retailers decided to gouge prices by £200!

It really is that simple.

 

[Gibbo]

Because Amazon is the largest wholesaler on the planet and has the biggest buying power of any reseller worldwide? Thats why... because they buy direct from Intel and get a better deal than OCUK will get, that is why.

When your the largest marketplace on the planet, you have the largest audience, it stands to reason people wanting to sell their products through you will give you a) priority on shipments of products and b) better deals than anyone else.. because they are able to move much larger volumes of products than anyone else.

Also Amazon logistics are constantly shipping stuff to the UK, so there is already in place a route to get stuff to the UK cheaper. They can afford to swallow some margin as their logistics are already in place to get products here.

This!
Also how long they will take to deliver is anyones guess. At least we deliver next day on in stock product.

When my stock is reading 1000+ and I am not selling 100+ per day we improve the price, but until the supply improves the price will stay as is.

 

[Gibbo]

or..... Rainforest decided to gouge prices by $30.Whereas UK retailers decided to gouge prices by £200!

It really is that simple.

No they do not!

You like to claim UK retailers are £200 over, they are not, the RRP is £500 with VAT, so they are £100 over.
Then the gouging is not soley the retailer, Master disti increases price by $30, grey distributors increase price by over $200, thus the increase is not soley retailer, infact the distributor plays the bigger role.

 

[beany_bot]

This!
Also how long they will take to deliver is anyones guess. At least we deliver next day on in stock product.

When my stock is reading 1000+ and I am not selling 100+ per day we improve the price, but until the supply improves the price will stay as is.

I see the black and white argument of Price = demand/supply.

But surely you see the value in not... well frank ripping off your loyal customers? Because thats what this is. It's milking to the max. And it's ******* people off.
Just sell at a more reasonable price. Sure you will sell out and some people will be dissapointed. But at £620 you still sell out and EVERYONE is dissapointed. I can only imagine you will loose customers for life with this. I'm certainly more than a little bit annoyed. I'm willing to take the good with the bad regarding pricing but I know abuse when I see it.

 

[beany_bot]

the RRP is £500 with VAT

MSRP $499 = MSRP £382

382 x0.2 = 76.4 VAT. 76VAT + 382MSRP =


RRP £458

 

[SiDeards73]

No they do not!

You like to claim UK retailers are £200 over, they are not, the RRP is £500 with VAT, so they are £100 over.
Then the gouging is not soley the retailer, Master disti increases price by $30, grey distributors increase price by over $200, thus the increase is not soley retailer, infact the distributor plays the bigger role.

@Gibbo you have to remember there are a lot of armchair specialists in all sorts of things on these forums.. the fact that you are in the business is irrelevant to them, mostly because you are a reseller and they distrust you as they think you are just trying to extract as much £ from them as possible.

However, i understand how supply chain works, and a fair few other people who read these forums do.

a lot of people see the price of something in the US from Amazon and then price in the UK from a reseller and just dont understand why its cheaper there than here.... As i said above, when your the worlds largest, these privileges comes with it.

 

[SiDeards73]

RRP is £458

MSRP $499 = MSRP £382

382 x0.2 = 76.4 VAT. 76VAT + 382MSRP = RRP £458

You are missing the point entirely Beany, OCUK dont but direct from Intel... Amazon does, thus Amazon cuts out middlemen that OCUK cannot, these middlemen take their share.. OCUK does not pay MSRP for products from Intel, they pay a charge ontop from the middleman and then the other associated charges for shipping etc...

Like @Gibbo says some distris are selling these at £550+ so the reseller has to put their margin ontop of this....

It is only Amazon able to sell these are MSRP, because they buy or commit to enough volume to get them below MSRP to achieve the MSRP target, they already have all the logistics inplace worldwide to ship these and still make a decent profit.

 

[Gibbo]

MSRP $499 = MSRP £382

382 x0.2 = 76.4 VAT. 76VAT + 382MSRP =


RRP £458

You decide to miss the part that the people we buy from (distribution) are massively increases the sell price upto as high as $200 more, so you want us to sell at a loss?
We cover our own backs, yes we make more, instead of say 5% we'd make on a CPU when lots of supply, we can now enjoy 10-15% not exactly robbing customers, but if we have to buy some $200 over priced stock to mix in with the $30 overprice stock then it is easy to see why the whole UK channel is typically £550 - £650 for a 9900K, because none of them want the risk of selling at a loss.

 

[beany_bot]

You decide to miss the part that the people we buy from (distribution) are massively increases the sell price upto as high as $200 more, so you want us to sell at a loss?
We cover our own backs, yes we make more, instead of say 5% we'd make on a CPU when lots of supply, we can now enjoy 10-15% not exactly robbing customers, but if we have to buy some $200 over priced stock to mix in with the $30 price stock then it is easy to see why the whole UK channel is typically £550 - £650 for a 9900K, because none of them want the risk of selling at a loss.

I'm not missing anything, I am just pointing out the correct RRP of the product.
Anyway, we are all going round in circles here. Let's see what happens when the dust settles. It seems ridiculous that Joe public is able to buy stock considerably cheaper than you as a major European retailer is but there you have it.

 

[Deleted User 456458]

No they do not!

You like to claim UK retailers are £200 over, they are not, the RRP is £500 with VAT, so they are £100 over.
Then the gouging is not soley the retailer, Master disti increases price by $30, grey distributors increase price by over $200, thus the increase is not soley retailer, infact the distributor plays the bigger role.

Would you mind elaborating on the distribution structure? I'll outline how it's setup in enterprise world.

- Direct ship. That's limited to either global DIY houses, OEM's and resellers with a minimum spend cap with the vendor. These companies would have in-house logistics. No middle man. No margin removed
- Main distribution. T1 resellers with a global presence who need a multi region distribution partner and could look to farm out the logistics. Lowest margin negotiated due to high spend.
- Regional distributor. Support regional resellers with tiered pricing level based on certification or spend with the distributor. Industry typical margin taken and can be tiered down based on SLA's.
- Grey market. Generally frowned upon but can be a last choice. You'll pay a premium.

 

[ToonarmY87]

Vote with your wallets....

 

[Gibbo]

Would you mind elaborating on the distribution structure? I'll outline how it's setup in enterprise world.

- Direct ship. That's limited to either global DIY houses, OEM's and resellers with a minimum spend cap with the vendor. These companies would have in-house logistics. No middle man. No margin removed
- Main distribution. T1 resellers with a global presence who need a multi region distribution partner and could look to farm out the logistics. Lowest margin negotiated due to high spend.
- Regional distributor. Support regional resellers with tiered pricing level based on certification or spend with the distributor. Industry typical margin taken and can be tiered down based on SLA's.
- Grey market. Generally frowned upon but can be a last choice. You'll pay a premium.

That is correct, but in time of shortage the Main and Regional are adding extra, they should not but they are. Our first batches were un-affected but our first batch was just a couple of hundred, the additional batches have come in a least $30 higher from main distribution and the regionals are adding $30-$60 typically.
Grey market makes up their own rules and some have quoted me higher than my webshop price.

 

[signal11th]

To be fair I do actually feel sorry for "smaller" suppliers, like Gibbo said because they are the ones along with the consumers that are getting the shaft and copping all the flack whereas it really should be Intel.
As somebody else said although it never happens if people voted with their wallets then debacles like this would happen less often. Intel and Nvidia and let's be honest literally most PC components manufacturers are literally taking the **** the last couple of years with pricing.

 

[Journey]

Yeah, I find it weird that OCUK with 10k 9900K's on order (£4.8m value at normal retail) can secure better pricing. I'll ask, but I know there won't be an answer, what % of your total annual turnover comes from Intel CPU's?

 

[Deleted User 456458]

That is correct, but in time of shortage the Main and Regional are adding extra, they should not but they are. Our first batches were un-affected but our first batch was just a couple of hundred, the additional batches have come in a least $30 higher from main distribution and the regionals are adding $30-$60 typically.
Grey market makes up their own rules and some have quoted me higher than my webshop price.

Sounds like an intel issue at this point especially as there are sell through rebates on all this stuff or "how distributors actually make their money"

Thanks for clarifying and good luck with stock.

 

[Gibbo]

Yeah, I find it weird that OCUK with 10k 9900K's on order (£4.8m value at normal retail) can secure better pricing. I'll ask, but I know there won't be an answer, what % of your total annual turnover comes from Intel CPU's?

Intel sell to disti, disti sells to us and if the disti wishes to charge more they can do so.
Also the 10k on order with Intel/Master disti is nowhere near been fulfilled, so to maintain stock levels we have to buy from grey distribution, which means our stock cost is blended, it is the only way to keep product in stock due to the demand been so crazy.

 

[ZXSpectrum]

That is correct, but in time of shortage the Main and Regional are adding extra, they should not but they are. Our first batches were un-affected but our first batch was just a couple of hundred, the additional batches have come in a least $30 higher from main distribution and the regionals are adding $30-$60 typically.
Grey market makes up their own rules and some have quoted me higher than my webshop price.

I am assuming that you are talking about a company with a certain precious metal in their name?

Its funny how people only see what they want to see. The industry is very cut throat but that's always been the case. If people want to buy grey or from the states then good luck to them and then they can deal with warranty issues, import duty, shipping etc. They don't seem to understand that there are also certain aspects that they are not privy to that restrict purchasing and selling practices in the region and how that could effect and jeopardise future business.

You cant please everyone Gibbo even if OCUK were selling the same price as US Amazon I am sure people would find something to complain about.