Newegg Clarifies Its Intel SSD Price Increase
It's just Economics 101.
Earlier this week we noticed that Newegg's prices for Intel SSDs were much higher – in some cases, more than twice as much – than the manufacturer's suggested retail price. (See the original story here.)
Newegg has responded to our inquiry regarding the price with the following statement:
"Thank you for bringing this to our attention, we sincerely apologize for any inconvenience this has caused. We are aware of this issue and we are working exclusively with Intel to provide these products in greater numbers to meet the growing consumer demand. We apologize again for the inconvenience and we would like to assure you that providing the best online experience possible is our top priority."
Clearly the price increase is tied to supply and demand. With the recent surge in demand for Intel SSD parts, the dwindling stock at Newegg has driven up price.
Intel PR manager Dan Snyder told Tom's Hardware, "Intel has not raised distributor pricing but the demand for 34nm SSDs is outstripping supply, which Intel is addressing. We cannot speak to pricing strategy at specific etailers."
Have you been hot for an Intel X25-M SSD lately?

Almost EVERY retailer will do the same. It's called supply and demand and has been a staple in the smart business practice for thousands of years.
And besides that, it was very likely under automated control anyways. newegg.com has hundreds of thousands of different products to sell. It cant keep a greedy eye on every single one of them.
Get over it.
In other words: "yes, we increased the price because we had limited quantities available."
I wonder if Newegg's system was setup to automatically increase the price when stock fell below a certain limit. I'm not sure what Newegg would need to "work" on, just lower the price back down.
In other words: "yes, we increased the price because we had limited quantities available."
I wonder if Newegg's system was setup to automatically increase the price when stock fell below a certain limit. I'm not sure what Newegg would need to "work" on, just lower the price back down.
Exactly!
I guess i will shop around a little more and not trust them as much from this point forward.
Almost EVERY retailer will do the same. It's called supply and demand and has been a staple in the smart business practice for thousands of years.
And besides that, it was very likely under automated control anyways. newegg.com has hundreds of thousands of different products to sell. It cant keep a greedy eye on every single one of them.
Get over it.
I am certain this is what Westjet does. (A Canadian Airline)
I have noticed as the seats become more sparse, prices increase. This is the same concept (supply and demand), different industry.
I think there should be laws in place to protect consumers from price spikes. I paid $2.90 for a bag of ice @ the lake last weekend... I will never understand how ice is so expensive! It's fuckin Ice! and we aren't in a desert.
I do agree with you... however they doubled the price of this item, they didn't raise the price 10%. Where do you draw the line?
These type of posts get really tiresome. Look, it really is economics 101: if supply goes down, then price goes up. It is just that simple. Put it another way... let's say you won some tickets for a really hot, sold-out concert, but for a band you don't really like. Are you going to sell those tickets at face value, or are you going to sell them to the highest bidder? If you were to find an old comic book in your closet, then you come to learn it is particularly valuable because it was a limited print run, are you going to sell it for the 25 cents it originally cost, or are you going to sell it for the current market value?
One last example... let's say you own an online store. Your prices are normally very low and you move a lot of inventory. But this new item, the Widget Pro 2000 XLR, is a pretty hot selling item and your supplies are starting to run low because the manufacturer isn't making them fast enough. Do you sell at the current price and get bought out by a competitor, or do you raise your prices to current market value?
Businesses exist to make money. They aren't there to provide people with jobs and benefits, or to help consumers (which is not to say that those aren't natural results of running a business, it's just not the REASON you are in business). This is not a bad thing. However, if you find it unpaletable, feel free to shop somewhere else... that is YOUR greatest freedom and power as a consumer.
Actually, airlines have an even more clever business model. They allow flights to be booked far in advance and offer "discounts" because they know that most people who would book that far ahead are travelling for leisure, and are looking for a good deal. Once they reach the point where they have enough passengers booked to cover the cost of the flight, then their prices stablize to the "normal" rate. As the departure date approaches, the prices for the few remaining seats increase dramatically. The reason is because they know that most people booking last minute travel are business flyers who have to get where they are going and aren't concerned about the higher cost because a) their time is more valuable, b) the company is paying the expense and/or c) they or their company get to write-off the cost of the flight anyway.
And... there's absolutely nothing wrong with that business model (nor the recent trend of charging for checked luggage). It's just business. And like all other businesses, the airline industry exists to make money (or to try anyway).
There is no line. If the demand keeps going up the price keeps going up. If their price increase resulted in a decrease in demand the price will begin to fall. That is how supply and demand works.
I can guess that in an airline, if everybody buys in advance they should get a discount because that will enable the airline to better program a flight and also put that money in the bank or to good use in advance. If everybody buys at the last minute they should pay more because that will mean the airline has to schedule the following at the last minute which brings inconveniences because of that: more fuel, more food and drinks, the check-in personel is going to have to work more, the luggage guys too, etc.
But a site like Newegg ? Come on! The stock runs out, they send an e-mail/fax/phone call, etc to Intel saying they are having more demand and asking for more. Period!
If Intel has to go out and contract more people in a rush to face demand and that burocracy temporaily increases the price on the ssd's then Intel will reflect that on the NEXT batch they send to Newegg. The current batch was bought at a particular price, and not content with that price not being particularly cheap, Newegg decides to make more money out of peoples need to have one.
This is not economics 101, it's greed.
Simply raising prices is not one of these. Companies can and should be allowed to raise prices on most goods in most cases, If you feel that the price is too high then don't pay it, but it is silly to get angry over it or to hold a grudge. (Exceptions may occur in cases of supply or demand shocks on essential goods or when the company has a natural or unnatural monopoly).
Don't turn the other cheek as soon as there is a mis-step. I strongly believe it's online places like this that brought unfair prices at OTHER places down.
I do have strong beef with airlines charging for checked luggage. The reason is that it feels like I'm being punished for something (carrying luggage) that is the most common situation. It is like selling you a hot dog and charging for the napkin, the condiments, etc.
I prefer a model that uses rewards. If passengers only has one luggage they get a small discount and if they only have carryons then a bigger discount. The airlines can adjust the numbers so both models are economically the same. The result is that I feel encouraged to travel light but don't get pissed off if I can't.
Everyone does price shopping (or at least they should) and choose the price/merchant combo they feel provides the best value. That's not always the cheapest, mind you. Sometimes it's worth spending more at a reputable vendor rather than some unknown e-shop that might hand your CC to the highest bidder in Farawayistan. Sometimes it's worth sending your fave e-tailer a message by not buying your next upgrade there.
Lame newegg, lame.