Newegg Clarifies Its Intel SSD Price Increase

By Marcus Yam
published

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?

Marcus Yam
Marcus Yam
Marcus Yam served as Tom's Hardware News Director during 2008-2014. He entered tech media in the late 90s and fondly remembers the days when an overclocked Celeron 300A and Voodoo2 SLI comprised a gaming rig with the ultimate street cred.
Topics
Storage
54 Comments Comment from the forums
  • vgdarkstar
    I just bought mine today, I would have from Newegg, but they're out, got it elsewhere.
    Reply
  • hellwig
    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.
    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.
    Reply
  • gorehound
    maybe it is timne not to shop there.that was/is a very lame thing to do to consumers.
    Reply
  • grieve
    hellwigIn other words: "yes, we increased the price because we had limited quantities available.Exactly!
    I guess i will shop around a little more and not trust them as much from this point forward.
    Reply
  • curnel_D
    gorehoundmaybe it is timne not to shop there.that was/is a very lame thing to do to consumers.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.
    Reply
  • grieve
    hellwig"I wonder if Newegg's system was setup to automatically increase the price when stock fell below a certain limit. 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.

    Reply
  • grieve
    Curnel_DAlmost 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 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?
    Reply
  • Major7up
    Sounds like a dodgy response to a direct questions. Hell yeah they raised teh price, hell yeah the want to take advantage of the situation...they are a business after all. All we can do is wait or buy it elsewhere.
    Reply
  • jellico
    gorehoundmaybe it is timne not to shop there.that was/is a very lame thing to do to consumers.
    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.
    Reply
  • jellico
    grieveI 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.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).
    Reply