GPU prices in the UK

[chrcoluk]

So you're saying the problem is NV advertising an MSRP nobody is paying attention to?

there is two solutions, get the retail prices down to match, or remove/increase the MSRP from advertising, if as you claim no pays attention ot it, then why would it be a problem to remove it?

Of course people pay attention to it, evidenced alone by the countless posts on here of people complaining they paying more than MSRP.

 

[matt100]

there is two solutions, get the retail prices down to match, or remove/increase the MSRP from advertising, if as you claim no pays attention ot it, then why would it be a problem to remove it?

Of course people pay attention to it, evidenced alone by the countless posts on here of people complaining they paying more than MSRP.

I meant retailers...

 

[chrcoluk]

Retailers do what they do, they free to do that, its up to the vendors, to give them incentives to keep their prices down such as rebates, or enforcing lower margins. (if they want to keep advertising a lower MSRP).

Apple, Sony and Microsoft manage it, its not like it is some kind of impossible task.

 

[Zernath]

Laughable really, it's genuinely the strongest vs the dollar it's been all year.



Wouldn't surprise me if this is the official line now

They can always fall back on Brexit or Covid-19!

 

[matt100]

Retailers do what they do, they free to do that, its up to the vendors, to give them incentives to keep their prices down such as rebates, or enforcing lower margins. (if they want to keep advertising a lower MSRP).

Apple, Sony and Microsoft manage it, its not like it is some kind of impossible task.

I suspect partly because they're the mfr so they control the stack top to bottom, it's a different model here as the people like ASUS etc are only buying the chips.

I've not checked but I suspect the FE cards (they're made by NV right?) all hit the SRP for the most part?

Is the issue not potentially that the SRP refers to a very small set of products, ie reference cards with no extras?

 

[chrcoluk]

I suspect partly because they're the mfr so they control the stack top to bottom, it's a different model here as the people like ASUS etc are only buying the chips.

I've not checked but I suspect the FE cards (they're made by NV right?) all hit the SRP for the most part?

Is the issue not potentially that the SRP refers to a very small set of products, ie reference cards with no extras?

There is also the issue that the nvidia supply is well known for been a paper supply, been there to show a price but not in stock, but also there is quoted prices for the 3rd party cards by the reviewers as well.

 

[MoobieWOW]

With all these leaks of 3060/3070/3080TI and an AMD 6700 and 6700XT I hope the price of the other cards can start to drop back to MSRP... id like to get a more higher end card this go around

 

[Zernath]

With all these leaks of 3060/3070/3080TI and an AMD 6700 and 6700XT I hope the price of the other cards can start to drop back to MSRP... id like to get a more higher end card this go around

Don't expect to see MSRP again. Prices go up for *insert excuse here*, but when *insert excuse here* is no longer applicable, prices remain unchanged.

 

[chrcoluk]

A vendor took the right move and refused to release a invalid MSRP for their product. Revealed in a hardware unboxed video.

https://youtu.be/Lk20IzZN-xk?t=620

 

[Dontrocktheboat]

A vendor took the right move and refused to release a invalid MSRP for their product. Revealed in a hardware unboxed video.

https://youtu.be/Lk20IzZN-xk?t=620

absolute joke.

by the time it come to Uk.

Shops take their cut, VAT, it try is a ripoff Britain.

Wait till brexit kicks in, then we are truly up the brown stuff.

 

[danlightbulb]

The issue with this whole pricing discussion is no one knows what the product costs to make.

Id wager its a lot less than people think.

In a card like the 3080, the chip itself, less than $100 and that includes Nvidia's profit margin. The vram, maybe an extra $50-70. That's it for Nvidia's participation in the product.

The PCB, other circuit board components, assembly etc are all quite cheap. A whole motherboard can be made boxed and shipped for under £100.

Lets say the raw cost of this product, assembled and boxed is around £400-£500. Then the AIB wants their 50%. Immediately that product is now £600-£700. Then the retailer wants their 10%, and the product is now £700-£800. That is £300-£400 added to the cost of the product in that last two steps of the chain, and what value has been added for that?

I believe the difference with the FE models is the cost is the same but there is no AIB mark up. Nvidia and AMD are making the same markup on the chips and ram as they are selling them to AIBs, but they are not marking up the overall package by the same amount.

This whole issue exists because AIBs are an extra party to the whole chain. Why are they even needed? Why can't AMD and Nvidia just make and sell their own product, full stop?

 

[Nablaoperator]

The issue with this whole pricing discussion is no one knows what the product costs to make.

Id wager its a lot less than people think.

In a card like the 3080, the chip itself, less than $100 and that includes Nvidia's profit margin. The vram, maybe an extra $50-70. That's it for Nvidia's participation in the product.

The PCB, other circuit board components, assembly etc are all quite cheap. A whole motherboard can be made boxed and shipped for under £100.

Lets say the raw cost of this product, assembled and boxed is around £400-£500. Then the AIB wants their 50%. Immediately that product is now £600-£700. Then the retailer wants their 10%, and the product is now £700-£800. That is £300-£400 added to the cost of the product in that last two steps of the chain, and what value has been added for that?

I believe the difference with the FE models is the cost is the same but there is no AIB mark up. Nvidia and AMD are making the same markup on the chips and ram as they are selling them to AIBs, but they are not marking up the overall package by the same amount.

This whole issue exists because AIBs are an extra party to the whole chain. Why are they even needed? Why can't AMD and Nvidia just make and sell their own product, full stop?

I had made a series of posts here. Someone has to refine the assumptions. But it doesn't really matter now, I have gone and ordered a strix 3090 and the AMD launch enthusiasm has cratered

Cost to AIB for ASIC + VRAM (before logistics):
6900xt: $477
6800xt: $375
6800: $356

with integration costs (assumption without basis):
6900xt: $537 (+$60)
6800xt: $425 (+$50)
6800: $396 (+$40)

with inward logistics (+5%)
6900xt: $564
6800xt: $446
6800: $416

AIB targets 25% gross margin
Cost to distributor (before packaging & logistics)
6900xt: $752
6800xt: $595
6800: $555

Cost to distributor (+10% logistics & packaging)
6900xt: $827
6800xt: $655
6800: $611

 

[chrcoluk]

Shows how messed up we are when 25% is considered a tight margin.

 

[danlightbulb]

Be interested to know where the ASIC costs came from @Nablaoperator ?

Feel high to me considering the AdoredTV a few months ago where he mapped out some of these costs (albeit hypothetical).


Consider this though - why does retailer margin have to be a percentage? It costs the same to sell and ship a £1000 GPU as it does a £70 keyboard. Why should the former earn the retailer more? Why don't we have fixed retailer margins that are cost reflective of the fixed costs?

 

[Nablaoperator]

Be interested to know where the ASIC costs came from @Nablaoperator ?

Feel high to me considering the AdoredTV a few months ago where he mapped out some of these costs (albeit hypothetical).


Consider this though - why does retailer margin have to be a percentage? It costs the same to sell and ship a £1000 GPU as it does a £70 keyboard. Why should the former earn the retailer more? Why don't we have fixed retailer margins that are cost reflective of the fixed costs?

It's there in the post just above the linked post. The wafer cost is approx $10k.
Regarding margins, they are always controlled in percentages as the retailer has to deliver a target return on inventory.

 

[danlightbulb]

It's there in the post just above the linked post. The wafer cost is approx $10k.
Regarding margins, they are always controlled in percentages as the retailer has to deliver a target return on inventory.

I know they are 'always' percentages Im challenging that they don't need to be. For a retailer to make a profit he could run fixed cost margins that cover shipping and make the desired profit. Doesn't need to be a percentage for this. Same as the AIBs, they could decide they want to make £100 profit per card they make, regardless of whether than card costs £300 to make or £800. Why a percentage?

All a percentage does is inflate more expensive products further whilst adding no intrinsic value for the consumer.

 

[Nablaoperator]

I know they are 'always' percentages Im challenging that they don't need to be. For a retailer to make a profit he could run fixed cost margins that cover shipping and make the desired profit. Doesn't need to be a percentage for this. Same as the AIBs, they could decide they want to make £100 profit per card they make, regardless of whether than card costs £300 to make or £800. Why a percentage?

All a percentage does is inflate more expensive products further whilst adding no intrinsic value for the consumer.

There is a solid economic reason behind percentages. If the retailer were to liquidate all that inventory and move it into let's say bonds he'd be earning a "percentage" yield. Now he has to target another "percentage" that's higher than such bond yields and commensurate with the risks his enterprise is exposed to.

Though I am not an expert in finance, picked up those concepts while working on quantitative models in a one-off assignment. So you'd still need an accountant to sign on that

 

[danlightbulb]

There is a solid economic reason behind percentages. If the retailer were to liquidate all that inventory and move it into let's say bonds he'd be earning a "percentage" yield. Now he has to target another "percentage" that's higher than such bond yields and commensurate with the risks his enterprise is exposed to.

Its all about cross subsidy. On say a £5 fan it probably costs the retailer money to handle, store and ship it. They then make it back on the larger value products.

However the alternative would be to set a higher percentage margin on cheaper products, and a lower margin on more expensive products, dragging back the costs to be more reflective. Of course in a competitive market, this naturally works its way through and this issue of late is all due to shortages so retailers and AIBs can basically do as they wish and they will sell.

 

[pp111]

Hi all,

I am very eager to upgrade to either a 6800 XT or 3080 for the release CP2077 (which is looking less likely by the day), but I'm quite frustrated with the prices being so much higher than the initially advertised MSRPs.

I understand how Nvidia draws people in with false promises and their MSRPs are essentially nonsense as they never planned on making many reference cards (as explained by MLID and Gamers Nexus), but I am disappointed with the prices I'm seeing for the 6800 XT reference card. I simply don't understand how $650 works out to be £680. I imagine there is an import tax I'm not accounting for but what I've worked out so far is this:

$650 dollars = £486, plus 20% VAT = £583. So where is the near £100 extra coming from? An EU tax?

If I understood this better I might feel more comfortable paying the extra than I hoped for, but if it doesn't add up and I know I'm just being ripped off I think I'll wait and tolerate an initial playthrough of CP at low FPS/settings.

Any help would be greatly appreciated.

Many thanks

Dale

This is about normal for the many products. There are some manufacturers though that break with the norm and follow roughly the exchange rate but most don't. I once heard that the reason for this is that the UK is an island ( or two ), and as such it's a captive market, meaning you can pretty much charge what you like because the Brits can't just hop in a car and drive to another country where it might be cheaper.

 

[chrcoluk]

There is a solid economic reason behind percentages. If the retailer were to liquidate all that inventory and move it into let's say bonds he'd be earning a "percentage" yield. Now he has to target another "percentage" that's higher than such bond yields and commensurate with the risks his enterprise is exposed to.

Though I am not an expert in finance, picked up those concepts while working on quantitative models in a one-off assignment. So you'd still need an accountant to sign on that

This is it really its value to the shareholder.

The downsides of capitalism, is essentially the acceptable level of margins increases over time, performance is expected to be improved, and to keep shareholders interested, you need to out perform the competition. The failure of this system is inflation.

To make matters worse, in the modern world middle men are much more common, employment agencies, letting agents, and of course distributors for goods such as what ocuk sell. These middle men also have their own profit margins as well, essentially the more things that are in the path between the original company and the consumer, the higher the price. In a perfect consumer world, nvidia would sell to everyone direct, they would have minimal margins to cover their costs and nothing else. That alone would probably knock 30-40% at least off the price, but in that world nvidia wouldnt attract investors. Then of course you have the popularity of sales taxation, as the rich dont like income taxation. Lets not forget import duties as well, because governments dont like free trade.

If ocuk were to used fixed costs on each item sold, then the cheaper items would skyrocket in price, as the margins on those would ultimately have to increase to subsidise the lower margins on the gpu's. So you might get a rtx 3080 for £600, but then you paying £80 for a budget keyboard.

This is about normal for the many products. There are some manufacturers though that break with the norm and follow roughly the exchange rate but most don't. I once heard that the reason for this is that the UK is an island ( or two ), and as such it's a captive market, meaning you can pretty much charge what you like because the Brits can't just hop in a car and drive to another country where it might be cheaper.

Yeah and import rules/duties. All to encourage the brits to pay higher to buy from native suppliers, tax the international competitors to the point they not a viable option.