9 ms·

Many people assume that if they're seeing something that's more expensive than they're used to that they're being ripped off for some reason. Ripping people off

by tinco 6y ago

Many people assume that if they're seeing something that's more expensive than they're used to that they're being ripped off for some reason. Ripping people off with high prices is actually very rare nowadays, mostly thanks to the big online marketplaces. These large price differentials are purely due to the insane economies of scale we're able to create. It's not a wonder that there's a 128GB USB stick as expensive as $1675, it's a wonder there's a 128GB USB stick as cheap as $27. Imagine it took 1 million dollars to develop the tech and implement the manufacturing process of a 128GB stick. Assume they cost $5 to manufacture, and $20 to market and ship. Then when you sell a million you've recuperated your R&D and made a million profit that warrants the 6 million upfront investment you had to do. Same story but now with the expensive 128GB sticks, of which you're only going to sell 1000. Even though the stick is 1675, you only make 1.650.000, so your effective budget to develop the fancy encryption scheme and make a profit is 650.000.

saagarjha 6y ago
I take it you haven’t seen “diamond plated HMDI cables” on Amazon that retail for hundreds of dollars?
TonyTrapp 6y ago
I keep telling this to friends who complained that hard disk manufacturers are plotting against them by not lowering hard disk prices long after floods have damaged hard disk factories. You have to consider how absolutely incredibly cheap this stuff actually is. Take a high-quality wooden shelf. It's just a couple of wood boards, right? Yet it may cost ten times more than a USB stick or even an embedded development board. It's crazy.
- beagle3 6y ago
  And the Doctors. You have to consider that $500 for a 15 minute visit at the doctor is ridiculously cheap, given the reduction in pain / the increase in productivity you usually gain from following their advice! /s Yes, some stuff seems to be unreasonably cheap or expensive in some context. But it's the market that prices it, and collusion is always bad for everyone (except the conspirators).
- jmnicolas 6y ago
  The price of a 2 TB drive is the same as it was before the floods that were probably something like 10 years ago. There's no excuse.
  - wegs 6y ago
    It's an excuse to buy an SSD. And it's precisely what's responsible for falling HDD volumes and rising SDD volumes. Which, in turn, is precisely what's responsible for stagnant HDD and falling SSD prices. I can get a big-enough 480GB Sandisk SSD for $55 right now, and a 2TB SSD for $190, manufacturer direct. Looking at their WD_BLACK HDD, that's actually a buck cheaper than their 500GB HDD. For 2TB, I'd be looking at $99 instead of $190; at less than 2x the price difference, the SSD is a far better option for most people. Of course, the HDD goes all the way up to 10TB (at $320), at which point, so it still comes out ahead for bulk storage. SSDs hit a breakpoint at 2TB, where price and complexity go up astronomically. I can either drop a few grand on a specialized product, or around $1000 on several drives and build a RAID. So there's still a market. Just not a particularly big one. Prices are based on first sensible link on their web page (presumably, most popular product). You can go up or down in price if you click around, go off-brand, but the qualitative picture doesn't change. HDDs require a lot of infrastructure, and the market is evaporating. I suspect the upper end will disappear soon enough. I do still want some kind of bulk storage. I want to back up my photos somewhere reliable, but there seems little left. Tape is thousands of dollars for the hardware, while optical is now tiny. Nothing seems to compete with the volumes, economies-of-scale, or R&D budget of integrated circuits.
    - HeadsUpHigh 6y ago
      Cheapest ssd $/tb is x2-3 that of the cheapest hdd. That's still significant.
      - flaviu1 6y ago
        That'd actually be acceptable to me, since I wouldn't feel the need for redundancy--but it looks like the cheapest 1TB SSD that can be found is $67, while I can get HDDs for $15.88/TB. That's x4.2 the price of an HDD, definitely not practical for me.
- HeadsUpHigh 6y ago
  Hard drives are being price gouged. The prices on the low-end have stayed the same since pre-flood and the $/tb hasn't improved in a long time. Also the fact that the almost identical( and sometimes exactly identical down to serial number) externals often cost half as much as the internals( with only some extra warranty to cover the difference). It's a broken market.
  - washadjeffmad 6y ago
    Only true for lower capacity drives. You can buy 14TB for <$14/TB while 1-2TB is still $30-45/TB. The going price/capacity target for prosumer scale (>6TB) is $15/TB.
  - bleepblorp 6y ago
    Given the proliferation of lower-performing SMR drives, effective HDD prices have actually gone up rather than down. We're forced to pay the same price for grossly inferior products.
- Rillen 6y ago
  Your shelf is so expensive, normally, because of physical laber. While i agree that a hard drive cost can bottom out, i don't think we have bottomed out at the right price. Why would it make sense, at all, to produce a 300gb drive in 2020? It doesn't. Are they using machines which are not able to create better plates in 3,5" sizes? If yes, they probably ride those machines for a long time. Should be paid of by now 10x
chrismorgan 6y ago
I fondly recall an article in APC magazine from 2003, a review of Lindows OS, with a Live CD of it attached. “Combine it with a cheap-as-chips 128MB USB disk for $70” [that’s AUD], it said— Now here we are, 17 years later, selling a thousand times the capacity at half the price. (I also wondered, then and now, where the author sourced their fish and chips. This incongruity is why the phrase stuck in my head.)
olau 6y ago
Not that I necessarily disagree, but is Coca-Cola priced at cost + 15%?
oefrha 6y ago
> Ripping people off with high prices is actually very rare nowadays Apparently you have no idea of the audiophile market. I have someone swear that music doesn’t sound as nice when converted losslessly from WAV to AIFF/FLAC on whatever $$$$ gear he uses.
- treeman79 6y ago
  Yea, the group is both insane and amazing. They have a conference in Vegas. The sound from these setups are amazing. I started to get into it, but there is always something to do that provides a slightly better experience. Even 40k setups have room for improvement
- whywhywhywhy 6y ago
  Is that ripping them off though? I'd say Audiophiles want to pay over the odds for things that might not even really make a difference if you actually measured it. It's part of the enjoyment for them.
  - wegs 6y ago
    Yes, it is. If I sell you quack medicines for thousands of dollars, but you BELIEVE they work, am I ripping you off? Just because someone believes a con job doesn't make it less of a con job.
    - Karunamon 6y ago
      We’re talking subjective experience of art, not medical efficacy. If someone thinks A sounds better than B, they are automatically correct for their ears.
      - yodelshady 6y ago
        That gets rather odd when at least one study [1] has indicated that a (as far as patient is concerned) more expensive placebo does have higher medical efficacy: [1] https://blogs.sciencemag.org/pipeline/archives/2015/01/29/expensive_placebos_work_better https://blogs.sciencemag.org/pipeline/archives/2015/01/29/ex... (links to paper)
krageon 6y ago
> Ripping people off with high prices is actually very rare nowadays Given how many dropshippers exist for goods straight from China at 10-15x the price (if not more), this is untrue to such a degree that the original sentence almost reads like satire.
- 93po 6y ago
  I think the premise is that you can look up a item on Amazon, ebay, and walmart and between the three you're very unlikely to get ripped off if you buy the cheapest one available. If you Google for sunglasses, click the first advertisement, and buy without any cross shopping then sure you can absolutely get ripped off. But if you're that unsophisticated with shopping in general I don't know what to tell you
  - krageon 6y ago
    The original statement said the activity itself was rare. That it can be mitigated even when it is not rare is not in dispute, I think by anyone. That this is necessary, must always be done and is logical is a case I don't find compelling though.
  - bartread 6y ago
    > I think the premise is that you can look up a item on Amazon, ebay, and walmart and between the three you're very unlikely to get ripped off if you buy the cheapest one available. I doubt it's an issue with Walmart but you have completely ignored the problem of counterfeit/knock-off goods on Amazon and eBay. From painful experience, although fortunately not with anything too expensive, I can tell you that it's absolutely possible - likely, even, if you buy enough stuff - to get ripped off on Amazon in this way and that your strategy is not a reliable way to avoid being ripped off.
    - throwaway0a5e 6y ago
      Co-mingling inventory resulting in plausibly deniable (from the counterfeiters perceptive) for counterfeit merchandise is an Amazon specific (as far as I know) problem. Walmart, Ebay and damn near every other ecommerce platform have things set up in a way that it's clear who's goods wound up on who's doorstep and therefore counterfeit stuff isn't very much of a problem. You can absolutely buy terrible Chinese knockoff products engineered to within an inch of their life (I do it all the time) but it's vanishingly rare (compared to Amazon) to get a genuine "I paid for X and got inferior knockoff Y" situation on any other eCommerce platform.
rakamotog 6y ago
While whatever you said about economies of scale is 100% true, its the level 3 stuff that's increasing the cost, not storage.
maxsilver 6y ago
> Ripping people off with high prices is actually very rare nowadays, mostly thanks to the big online marketplaces. This is so absolutely untrue that this reads like a joke. > Many people assume that if they're seeing something that's more expensive than they're used to that they're being ripped off for some reason. Yes, because it's so absurdly common. "High price ripoffs" are so common that it's the default mode of operation for nearly every company in America. "High price ripoffs" are so common, that it's literally taught in school as a fundamental part of all marketing. (Price anchoring, premium pricing, skimming pricing, are all just 'high-price rip-offs' applied practically). Yes, it still occasionally happens, but the days of "a high price probably means better time/materials/quality" are long gone. 9 times out of 10, the high price product is identical to the cheap price one, and the higher price is explicitly just a ripoff.
- jakubp 6y ago
  I'll give a practical example. If you got to a gas station near me, you can get a CR2032 battery for say 2 USD. If you got to a certain home decor/equipment store a mile away, you'll get 4 of these batteries for 1 USD. That's what, 8x more expensive for a relatively common product? Gas stations and convenience stores in my country routinely charge 500-1000% more for common products because, and here's the gist of it I'm sure for most store/chain owners, "why not"?
  - shawnz 6y ago
    You are paying extra for the service the gas station is providing which is that they shipped and stored the batteries in a location close to your home. The gas station is probably also open longer than the big box store.
    - dharmab 6y ago
      The gas station also probably pays more per square foot of real estate.
    - jakubp 6y ago
      The store where the price is low also needs it shipped and stored, and is also close to my home. So that's definitely not a reason. Did you mean "convenience makes the price higher"? No quarrel there! The issue is how much higher. 8x more expensive (as an example) is in the "ripping me off" territory, if you ask me :)
jwalton 6y ago
> mostly thanks to the big online marketplaces. I see you've never tried to shop online outside of the US. Let's take an example; my daughter has an Easy Bake Oven - it's a little plastic oven with essentially a 100W heater inside, with a little tiny baking tray about the size of your cell phone. There's an optional "cupcake tray", which is again a tiny metal pan about the size of your phone, only Walmart up here in Canada sells the oven, but doesn't sell the cupcake pan. Amazon.ca today has a cupcake pan for $52 [0] which a) is lower than I've seen it on Amazon.ca before and b) this isn't even the "real" one from the manufacturer, it's an after-market knock off. There's another one listed for $89. It's actually cheaper for me to buy the cupcake tray from Amazon.com [1] even with the $9 shipping and the currency conversion, and I get the cupcake tray and a second regular tray and a bunch of cupcake liners. This is not the most egregious example I've seen by a long ways. I assume a lot of this isn't actually malice but instead robots trying to sell products and setting prices that are just clearly insane. I've seen products with 1000% markup over MSRP before, and sometimes it's stuff that's easy to buy locally. There's just a lot fewer sellers on amazon.ca, so it's easier for a robot to climb it's price to infinity with no competition. (And that's not to say everything is like this in Canada - most common stuff is priced reasonably. But if you want something a little out of the ordinary or sometimes if the "main" seller of something goes out of stock, suddenly it costs you a kidney to get a kid's basketball hoop.) [0](https://www.amazon.ca/Replacement-Cupcake-Muffin-Easy-Bake-Ultimate/dp/B00RY499SY https://www.amazon.ca/Replacement-Cupcake-Muffin-Easy-Bake-U...) [1](https://www.amazon.com/Easy-Bake-Ultimate-Replacement-Cupcake-Liners/dp/B00O1FGND8 https://www.amazon.com/Easy-Bake-Ultimate-Replacement-Cupcak...)

by tinco 6y ago

saagarjha 6y ago

I take it you haven’t seen “diamond plated HMDI cables” on Amazon that retail for hundreds of dollars?

TonyTrapp 6y ago

I keep telling this to friends who complained that hard disk manufacturers are plotting against them by not lowering hard disk prices long after floods have damaged hard disk factories. You have to consider how absolutely incredibly cheap this stuff actually is. Take a high-quality wooden shelf. It's just a couple of wood boards, right? Yet it may cost ten times more than a USB stick or even an embedded development board. It's crazy.

beagle3 6y ago
And the Doctors. You have to consider that $500 for a 15 minute visit at the doctor is ridiculously cheap, given the reduction in pain / the increase in productivity you usually gain from following their advice! /s Yes, some stuff seems to be unreasonably cheap or expensive in some context. But it's the market that prices it, and collusion is always bad for everyone (except the conspirators).
jmnicolas 6y ago
The price of a 2 TB drive is the same as it was before the floods that were probably something like 10 years ago. There's no excuse.
- wegs 6y ago
  It's an excuse to buy an SSD. And it's precisely what's responsible for falling HDD volumes and rising SDD volumes. Which, in turn, is precisely what's responsible for stagnant HDD and falling SSD prices. I can get a big-enough 480GB Sandisk SSD for $55 right now, and a 2TB SSD for $190, manufacturer direct. Looking at their WD_BLACK HDD, that's actually a buck cheaper than their 500GB HDD. For 2TB, I'd be looking at $99 instead of $190; at less than 2x the price difference, the SSD is a far better option for most people. Of course, the HDD goes all the way up to 10TB (at $320), at which point, so it still comes out ahead for bulk storage. SSDs hit a breakpoint at 2TB, where price and complexity go up astronomically. I can either drop a few grand on a specialized product, or around $1000 on several drives and build a RAID. So there's still a market. Just not a particularly big one. Prices are based on first sensible link on their web page (presumably, most popular product). You can go up or down in price if you click around, go off-brand, but the qualitative picture doesn't change. HDDs require a lot of infrastructure, and the market is evaporating. I suspect the upper end will disappear soon enough. I do still want some kind of bulk storage. I want to back up my photos somewhere reliable, but there seems little left. Tape is thousands of dollars for the hardware, while optical is now tiny. Nothing seems to compete with the volumes, economies-of-scale, or R&D budget of integrated circuits.
  - HeadsUpHigh 6y ago
    Cheapest ssd $/tb is x2-3 that of the cheapest hdd. That's still significant.
    - flaviu1 6y ago
      That'd actually be acceptable to me, since I wouldn't feel the need for redundancy--but it looks like the cheapest 1TB SSD that can be found is $67, while I can get HDDs for $15.88/TB. That's x4.2 the price of an HDD, definitely not practical for me.
HeadsUpHigh 6y ago
Hard drives are being price gouged. The prices on the low-end have stayed the same since pre-flood and the $/tb hasn't improved in a long time. Also the fact that the almost identical( and sometimes exactly identical down to serial number) externals often cost half as much as the internals( with only some extra warranty to cover the difference). It's a broken market.
- washadjeffmad 6y ago
  Only true for lower capacity drives. You can buy 14TB for <$14/TB while 1-2TB is still $30-45/TB. The going price/capacity target for prosumer scale (>6TB) is $15/TB.
- bleepblorp 6y ago
  Given the proliferation of lower-performing SMR drives, effective HDD prices have actually gone up rather than down. We're forced to pay the same price for grossly inferior products.
Rillen 6y ago
Your shelf is so expensive, normally, because of physical laber. While i agree that a hard drive cost can bottom out, i don't think we have bottomed out at the right price. Why would it make sense, at all, to produce a 300gb drive in 2020? It doesn't. Are they using machines which are not able to create better plates in 3,5" sizes? If yes, they probably ride those machines for a long time. Should be paid of by now 10x

chrismorgan 6y ago

I fondly recall an article in APC magazine from 2003, a review of Lindows OS, with a Live CD of it attached. “Combine it with a cheap-as-chips 128MB USB disk for $70” [that’s AUD], it said— Now here we are, 17 years later, selling a thousand times the capacity at half the price. (I also wondered, then and now, where the author sourced their fish and chips. This incongruity is why the phrase stuck in my head.)

olau 6y ago

Not that I necessarily disagree, but is Coca-Cola priced at cost + 15%?

oefrha 6y ago

> Ripping people off with high prices is actually very rare nowadays Apparently you have no idea of the audiophile market. I have someone swear that music doesn’t sound as nice when converted losslessly from WAV to AIFF/FLAC on whatever $$$$ gear he uses.

treeman79 6y ago
Yea, the group is both insane and amazing. They have a conference in Vegas. The sound from these setups are amazing. I started to get into it, but there is always something to do that provides a slightly better experience. Even 40k setups have room for improvement
whywhywhywhy 6y ago
Is that ripping them off though? I'd say Audiophiles want to pay over the odds for things that might not even really make a difference if you actually measured it. It's part of the enjoyment for them.
- wegs 6y ago
  Yes, it is. If I sell you quack medicines for thousands of dollars, but you BELIEVE they work, am I ripping you off? Just because someone believes a con job doesn't make it less of a con job.
  - Karunamon 6y ago
    We’re talking subjective experience of art, not medical efficacy. If someone thinks A sounds better than B, they are automatically correct for their ears.
    - yodelshady 6y ago
      That gets rather odd when at least one study [1] has indicated that a (as far as patient is concerned) more expensive placebo does have higher medical efficacy: [1] https://blogs.sciencemag.org/pipeline/archives/2015/01/29/expensive_placebos_work_better https://blogs.sciencemag.org/pipeline/archives/2015/01/29/ex... (links to paper)

krageon 6y ago

> Ripping people off with high prices is actually very rare nowadays Given how many dropshippers exist for goods straight from China at 10-15x the price (if not more), this is untrue to such a degree that the original sentence almost reads like satire.

93po 6y ago
I think the premise is that you can look up a item on Amazon, ebay, and walmart and between the three you're very unlikely to get ripped off if you buy the cheapest one available. If you Google for sunglasses, click the first advertisement, and buy without any cross shopping then sure you can absolutely get ripped off. But if you're that unsophisticated with shopping in general I don't know what to tell you
- krageon 6y ago
  The original statement said the activity itself was rare. That it can be mitigated even when it is not rare is not in dispute, I think by anyone. That this is necessary, must always be done and is logical is a case I don't find compelling though.
- bartread 6y ago
  > I think the premise is that you can look up a item on Amazon, ebay, and walmart and between the three you're very unlikely to get ripped off if you buy the cheapest one available. I doubt it's an issue with Walmart but you have completely ignored the problem of counterfeit/knock-off goods on Amazon and eBay. From painful experience, although fortunately not with anything too expensive, I can tell you that it's absolutely possible - likely, even, if you buy enough stuff - to get ripped off on Amazon in this way and that your strategy is not a reliable way to avoid being ripped off.
  - throwaway0a5e 6y ago
    Co-mingling inventory resulting in plausibly deniable (from the counterfeiters perceptive) for counterfeit merchandise is an Amazon specific (as far as I know) problem. Walmart, Ebay and damn near every other ecommerce platform have things set up in a way that it's clear who's goods wound up on who's doorstep and therefore counterfeit stuff isn't very much of a problem. You can absolutely buy terrible Chinese knockoff products engineered to within an inch of their life (I do it all the time) but it's vanishingly rare (compared to Amazon) to get a genuine "I paid for X and got inferior knockoff Y" situation on any other eCommerce platform.

rakamotog 6y ago

While whatever you said about economies of scale is 100% true, its the level 3 stuff that's increasing the cost, not storage.

maxsilver 6y ago

> Ripping people off with high prices is actually very rare nowadays, mostly thanks to the big online marketplaces. This is so absolutely untrue that this reads like a joke. > Many people assume that if they're seeing something that's more expensive than they're used to that they're being ripped off for some reason. Yes, because it's so absurdly common. "High price ripoffs" are so common that it's the default mode of operation for nearly every company in America. "High price ripoffs" are so common, that it's literally taught in school as a fundamental part of all marketing. (Price anchoring, premium pricing, skimming pricing, are all just 'high-price rip-offs' applied practically). Yes, it still occasionally happens, but the days of "a high price probably means better time/materials/quality" are long gone. 9 times out of 10, the high price product is identical to the cheap price one, and the higher price is explicitly just a ripoff.

jakubp 6y ago
I'll give a practical example. If you got to a gas station near me, you can get a CR2032 battery for say 2 USD. If you got to a certain home decor/equipment store a mile away, you'll get 4 of these batteries for 1 USD. That's what, 8x more expensive for a relatively common product? Gas stations and convenience stores in my country routinely charge 500-1000% more for common products because, and here's the gist of it I'm sure for most store/chain owners, "why not"?
- shawnz 6y ago
  You are paying extra for the service the gas station is providing which is that they shipped and stored the batteries in a location close to your home. The gas station is probably also open longer than the big box store.
  - dharmab 6y ago
    The gas station also probably pays more per square foot of real estate.
  - jakubp 6y ago
    The store where the price is low also needs it shipped and stored, and is also close to my home. So that's definitely not a reason. Did you mean "convenience makes the price higher"? No quarrel there! The issue is how much higher. 8x more expensive (as an example) is in the "ripping me off" territory, if you ask me :)

jwalton 6y ago

> mostly thanks to the big online marketplaces. I see you've never tried to shop online outside of the US. Let's take an example; my daughter has an Easy Bake Oven - it's a little plastic oven with essentially a 100W heater inside, with a little tiny baking tray about the size of your cell phone. There's an optional "cupcake tray", which is again a tiny metal pan about the size of your phone, only Walmart up here in Canada sells the oven, but doesn't sell the cupcake pan. Amazon.ca today has a cupcake pan for $52 [0] which a) is lower than I've seen it on Amazon.ca before and b) this isn't even the "real" one from the manufacturer, it's an after-market knock off. There's another one listed for $89. It's actually cheaper for me to buy the cupcake tray from Amazon.com [1] even with the $9 shipping and the currency conversion, and I get the cupcake tray and a second regular tray and a bunch of cupcake liners. This is not the most egregious example I've seen by a long ways. I assume a lot of this isn't actually malice but instead robots trying to sell products and setting prices that are just clearly insane. I've seen products with 1000% markup over MSRP before, and sometimes it's stuff that's easy to buy locally. There's just a lot fewer sellers on amazon.ca, so it's easier for a robot to climb it's price to infinity with no competition. (And that's not to say everything is like this in Canada - most common stuff is priced reasonably. But if you want something a little out of the ordinary or sometimes if the "main" seller of something goes out of stock, suddenly it costs you a kidney to get a kid's basketball hoop.) [0](https://www.amazon.ca/Replacement-Cupcake-Muffin-Easy-Bake-Ultimate/dp/B00RY499SY https://www.amazon.ca/Replacement-Cupcake-Muffin-Easy-Bake-U...) [1](https://www.amazon.com/Easy-Bake-Ultimate-Replacement-Cupcake-Liners/dp/B00O1FGND8 https://www.amazon.com/Easy-Bake-Ultimate-Replacement-Cupcak...)