Anyone who’s tried to pick up a PS5 knows the difficulty of refreshing Best Buy's website hoping for the "add to cart" button to go yellow. Not only are production issues limiting stock, scalpers have been using bots to buy as many consoles as they can.
This has obviously created much ire directed towards scalpers who continue to buy up limited inventory in hopes of flipping consoles for a profit. Yet, some of them seem upset at all the “bad press” they’ve received for hoarding these consoles like a modern day Smaug.
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Forbes’ (opens in new tab) Janhoi McGregor spoke to the co-founder of a scalping advice group called The Lab. A person who goes by Jordan had strong feelings about how he and his group were being portrayed in the media. Jordan insists that scalpers are completely misunderstood, and their negative public opinion is completely unjustified.
“There seems to be A LOT of bad press on this incredibly valuable industry and I do not feel that it is justified, all we are acting as is a middleman for limited quantity items.”
Middleman is definitely the wrong word there. Technically the retailers are the “middlemen,” since they sit directly between the manufacturer and the customer. But Jordan goes on to say more.
“Essentially, every business resells their products. Tesco, for example, buys milk from farmers for 26p or so per liter and sells it on for upwards of 70p per liter. No one ever seems to complain to the extent as they are currently doing towards ourselves.”
No one complains because it’s not the same thing at all. Retailers buy from producers and sell for a profit, sure, but it’s not as though Tesco then uses bots to buy all the milk from its competitors and sells to people for £1 a liter.
Basically Jordan is marketing scalpers as the solution to a problem they themselves created. Because if they didn’t hoard consoles the same way Scrooge McDuck hoards gold coins, people would just buy systems from Walmart, GameStop, or wherever else units are available. There would still be limited quantities, but the situation wouldn’t be nearly as bad.
People obviously see through his transparent excuses, with one anonymous person telling McGregor that Jordan is “deluded. He doesn't get he's another layer of profiteering in his own Tesco analogy. He's not Robin Hood."
One Tom’s Guide staff member also referred to Jordan as the “Martin Shkreli of video game consoles”. Shkreli, dubbed "Pharma Bro" by some, rose to infamy in 2015 for obtaining the manufacturing license for the life-saving drug Daraprim and increasing the price by from $13.50 to $750 per pill. He often would justify and brag on Twitter and news shows about his profiteering. Shkreli is currently serving a seven-year federal prison sentence for securities fraud.
Another scalper at The Lab, known as Regan, also showed McGregor just how fast scalping bots are. One bot called Velox was about to purchase a Supreme x Smurfs Skateboard in under 2.3 seconds. That’s far faster than any human could manage, and gives the scalpers an extremely unfair advantage. Not only that, Velox is able to get round 3D Secure, an extra layer of security UK retailers are required to use. It verifies that the buyer is the legitimate owner of the credit or debit card being used, and can add extra seconds onto a purchase time.
Scalpers have such an unfair advantage that Jordan complained they would sometimes be beaten to the punch by other scalpers using their own bots. In other words, scalpers have to be as vigilant as ordinary customers if they want to get their PS5 purchases in on time. But it seems like the irony is completely lost on members of The Lab.
Still, Regan also claims that scalpers are performing a valid service, and if they didn’t buy consoles at break-neck speeds, then some gamers wouldn’t be able to get units at all.
“Your average person who just wants one of the consoles to use struggles to get close. A lot of these sites have very minimal or easy to bypass bot protection. They often release stocks at stupid times or without any form of schedule. A retailer I won’t name released stock of the PlayStation 5s in the extremely early hours of the morning. Which shows the lack of care on their part. The only people who will have known about those restocks will have been people with monitors inside of cook groups.”
Scalping only helps the scalpers
“Every villain is the hero of their own story” is the phrase that comes to mind when reading these comments. Jordan and Regan don’t see themselves as the bad guys, and insist that they are helping people by giving them the chance to fleece other would-be gamers out of their cash.
“I mainly just try and help others now, that’s all that really matters to me. The whole group came about near the start of the first UK lockdown and it makes me so happy that I can help people make some extra money for themselves.”
It’s an argument that’s been used by scalpers before, insisting that the pandemic means people have fallen on hard times and selling scalped consoles for profit is helping people pay bills and put food on the table. Jordan also claims that The Lab is using their revenue to do good.
“We do a lot for charity as well. I myself, or collectively as a group, donate to charity almost monthly at this point. Most notably, over the past month, we donated a large portion of our membership fees to a foodbank local to me,” said Regan.
Unfortunately, Regan did not provide McGregor with details on which food bank the group donated to, meaning he wasn't able to independently verify the donation.
Charity or not, and no matter how they justify their actions, scalping is scalping. You are physically taking consoles and selling systems for higher prices in hopes of making money. Even if you don’t buy any consoles yourselves, and just help other people get in on the action, you’re just as culpable.
Jordan claimed to have bought 25 PS5 consoles in January, reselling systems for £700 ($967) each. For reference, the disc-ready PS5 costs £450 in the UK.
Don't be tempted by scalped consoles
Do the scalpers deserve the death threats Jordan claims The Lab has received? Absolutely not, especially since sending death threats is a serious crime. But they do deserve every ounce of criticism and bad press that’s sent their way. Because when it comes down to it, they are inserting themselves into the supply chain with the goal of making themselves money, and they’re doing it at the expense of ordinary people.
But as long as people are willing to pay overinflated prices for a PS5, the scalpers will be there to take their cash. I also have doubts that attempting to make scalping illegal is going to deter determined hoarders.
So whatever you do, do not buy one. We get it, it’s infuriating to try and get a console only to find they’ve sold out in less than a minute. Buying from a scalper only encourages them to keep at it, and that means the PS5’s stock issues are going to drag on for a lot longer than it would have otherwise.
Just be patient, sit back, and keep an eye out on upcoming stock with our guide on where to buy PS5. It’s not going to be easy, but it’ll be worth it when you pick up a console for $500 instead of $1,000.
A little background about me. I'm a regular consumer (I don't scalp for a living and buy my products through sanctioned means). I work in tech as a software engineer (being educated doesn't exclude me from being regular). I was able to acquire a console. It was challenging, especially at first. I just didn't complain about the 100s of times I failed.
Scalpers I observed or read about fell into one of a few types:
Commercial scalpers: use commercial bots and paid services for an advantage. These bots cost thousands but can purchase multiples. Takes a fair bit of technical ability. A lot of time and effort but will yield results. It's a full time job until it's all setup, tested and going.
Consumer scalpers: consumers dedicated to finding a system. Some have technical know how. Some don't. Most use traditional purchase flows but simply beat other consumers because they're more obsessed.
Informed consumers: only interested in a single system, maybe two (Dads, moms, young and middle aged). They spend the time to figure out how to track the systems and are persistent. Very similar to Consumer Scalpers but just don't care to sell any for profit. Same strategies are employed.
Manufacturers or their subsidiaries like the extra hype and have participated in questionable practices (https://www.techradar.com/news/msi-subsidiary-gets-caught-selling-rtx-3080-gpus-on-ebay)Scalper groups like CrepChiefNotify (CCN) :
Are mostly average consumers that are in a chat room. The benefit of the chat room is hearing how others are grabbing the products and getting good notifications. It's a paid membership.
The pros in this group have many avenues for leads on products. CCN is only one. Other avenues might include reseller relationships with manufacturers. They often use commercial bots. They also use manual purchasing. They contribute to shortages but are too few in numbers to cause this problem unless there is already a massive supply issue. Furthermore, they can't function at all unless etailers support them
CCN purposely releases marketing statements claiming thousands of systems but the group itself only wants subscription money and is not getting the systems directly. The marketing is quite misleading and most subscribers find this out rather quickly.Articles and press follow the formula:
Scalpers are the problem. Scalpers are evil.
Bots are buying everything
Restock information which is old and mostly uninformedThe press is very misleading including marketing from scalper groups. For scalping to remain viable, there needs to be a high demand product, shortages from the manufacturer and etailers create sites that allow bot purchases. Sony IS shorting the market. Many people I talked to were able to gain 20+ systems during pre-order. Easily. No special tools. They could've timed it differently to ensure greater supply as well. Certainly COVID hasn't helped. Working in software I can tell you its very easy to circumvent bots. It's trivial. Use a queue like Sony; ticketing system; local pickup only is a massive deterrent; 2FA or some variant during purchasing; paid memberships like Sam's club, just to name a few... That's it. No more bot purchases. I'll let you speculate why etailers like Newegg, Walmart and Antonline are top choices for bots, yet there is all this press saying they're fighting the good fight. It's an utter lie.
Etrailers that don't cater to bots:
BestBuy: no bot support the SMS verification
Target: local pickup is a major deterrent
Sam's club and Costco because of the paid membership
You're competing against real people and in most cases people from your areaScalpers are a symptom of the market created by the manufacturers and etailers. The service the scalpers provide, and should be paid for, is they're willing to stay up late at night, follow monitors and outpace everyone else through persistence. They mark up the system slightly to allow early adopters to go straight to the front of the line without any effort. I think that's worth paying for... A little. Everyone I sold too understood this and were happy to pay a markup (before Christmas 850. After Christmas around stulus 750). These consumer scalpers are individuals like you and me, simply willing to spend the time to compete at the highest level. Most are not cheating the system. Most aren't using bots. The perspective that it's "unfair" is only true for a small subset of the scalpers. It's simply a better story to victimize yourself by conflating everyone that buys, then sells a system as a bot or an evil scalper feeding off hard working citizens. Fact is, you're just losing against real people. Think about this, if bots and scalpers were suddenly gone, only 5M individual households (under the best of circumstances) would have a PS5. That's nothing. Everyone would still being crying but they'd be screaming directly at Sony. Sony expects to make another 18M this year? Is that right? You still think scalpers are the problem?
If you're going to blame the scalper, be specific that you're directing your frustration at the cheaters. Also realize they're a very small piece of what's really going on.
I knew nothing about scalping end of November. I was able to purchase 8 systems just by manually clicking. I wrote my own bot which didn't cheat and only worked for 1 etailer which netted another 7 systems. I gave most away at retail and only sold others to make up for the late nights and time writing the bot, however, I'm still lumped in with the cheaters by the misinformed masses. This same entitled population is simply losing to regular people that want it more than they do.
Your article is either uninformed or just writing a perspective that will get the most page views possible. Again, scalpers exist because of how manufacturers and etailers are distributing product. Don't blame the symptom of the issue, blame the ecosystem that yields the undesirable outcome.
he doth protest too much, methinks. The article isn't misinformed. You're just trying to justify your scalping. Rather poorly I might add. The hypocrisy is overflowing.
You're taking away systems from the average consumer so that you can sell it to them at inflated prices. That's called being a scalper. If you're going to go about doing something like that at least be a man and acknowledge what you are doing. Instead of cowering behind some poorly thought out justification to try and make yourself feel better about scalping.
The author of the article is right folks. Don't support cheaters like flowjacked. Yes it sucks they are gaming the system causing us to wait a few extra months to get our hands on the PS5. But it's not like there are any killer apps right now anyway. And it won't be long before stock is easy to find. Just hold out. Save yourself some money and don't reward scummy behavior.
There is no excuse.. none. Even if this is your temp job because of covid it's still BS.
You wanna do the leg work, go to stores and buy some and mark them up $100 then fine but using bots to clean out online stores and then selling them for double or more... scalper..
Jesus I worked at EB during the ps2 launch and 6 month shortage...I could have made a killing but I have morals. I could have bought consoles and sold them or held to the side if you slipped me some cash but nope, morals. Believe me I needed money, I was a single father at the time but...morals.
Hell I could make a killing on pc hardware right now. Through work I could get 3080's, 90's, 6800xt's, ryzen cpus.. but I don't because of morals. I haven't even used this ability for myself and I've been itching to upgrade my 2080ti and i7 but I'll wait until I can just buy one like normal. Hell it will probably benefit me because by the time CPU's are easy to get it will nearly be time for next gen ryzen and they won't be as hard to get as stuff is right now. Blame the console launches for this insane shortage.
Discontinue the practice.
You just set it up to track whatever store you want to buy the ps5 from and your phone will notify you the minute it goes on sale. It worked perfectly for me, i had it set to refresh every minute and had checked out by the time the twitter accounts started alerting people.
EDIT: I bought ONE console for myself. Mod Edit
"You're taking away systems from the average consumer so that you can sell it to them at inflated prices." Taking away systems from the average consumer? Did you mean to sound like the average consumer is somehow entitled to buy something because it's on the market? Nobody is entitled to buy anything unless it fits into essential needs. Certainly the PS5 is nice to have but nobody is entitled. Give me a break.
Fact is, for my state there is nothing unlawful about reselling your own property at a price everyone is willing to pay. Who cares if that's the only reason you purchased it. This isn't a necessity like medication. It's a PS5 and you're not entitled to one even if you have money to pay for it. If you want one, it's not very hard to get. Heaven forbid anyone has to learn something new or try.
I'm just saying it's absurd to blame the result on immorality (give me a break... Gag. Virtue signaling about single PS5 purchases. I've heard it all) rather than look at the constructs that create whatever you think is undesirable. Way to be a critical thinker.
"Through work I could get 3080's, 90's, 6800xt's, ryzen cpus.. but I don't because of morals." I agree this would be immoral. Using work or some backroom connection would be an unfair advantage. However, if an etailer posts inventory and either myself or a bot I wrote makes a purchase following the same work flow as everyone else, then that's not immoral. Everyone shared the same opportunity, I just got there more quickly. As for the bot, I posted it online the moment I wrote it and not one person used it. I even offered to help people with it. Nobody. People just complain. Unbelievable.
Nobody is keeping you from buying a PS5 other than your own lack of effort. Sounds like you've been around for a while, so you know better than to blame me. Immorality? So you're more virtuous because you don't buy something available to you and resell it at market price (not retail but market)? That's your angle? Hysterical.
See now, in my state, they actually DID frown on the "resale" of your property. In particular when it came to sporting events. If you were caught outside the stadium on game day trying to sell tickets above face value, you where ticketed, fined, and forfeited your merchandise. The PUBLIC reason they frowned on it was because OLD season ticket holders who no longer wanted to go to games would not relinquish them (because they're making money by scalping them) for NEW wanna-be season ticket holders. The REAL reason was that Uncle Sam wasn't getting his fair share.
Once the local governments figured out how to tax these sales (resellers need to be licensed and pay taxes on any sale), they started issuing "Reseller" badge id cards and viola! It's legal now!
Of course, this happened long before anyone with a cell phone could purchase tickets online.
My personal opinion is that it shouldn't be done. There is a limited supply. If you want one and manage to score one, good for you. Leave some for the rest. If you don't want one, don't buy one and unless you intend to give them away, no one should be able to purchase more than one.
Am I going to vilify you for it? Doubtful, but you're definitely not getting a Christmas card from me this year!
The thing is, some people are equating consoles to food or life-blood. They ABSOLUTELY NEED IT! Here's the comparison in their mind:
You managed to find 5 tomatoes in a garden.
Rather than picking just one and leaving the rest for others to find, you pick them all.
You see four people approaching and decide to keep one tomato for yourself.
All four arrive at the garden at same time. All four are starving.
Had you not picked all of the tomatoes, each would have gotten one.
Two of the people have items to trade for TWO of your tomatoes, each, leaving none for the others.
Two of the people have nothing to trade for even a single tomato.
Instead of leaving the tomatoes for everyone, you picked them all and demand something in return for the tomatoes.
While you could have given each a tomato, you did not and thus left two people to starve! (you big meanie!)
Of course, the flip side of that story is, "Hey! It's an unfair world. Get over it!"