> It's 100% retailers price gouging with their current stock that they got for cheap
The retail price of a product is a function of the market rate at the intersection of supply and demand. The price paid for inventory on the shelf doesn’t matter.
It works both ways. If retailers bought a lot of RAM at high prices and then the market suddenly dropped, they could have to sell it at a loss.
Some people get irrationally angry at this, but you do it too. If you bought a house for $500K and the market went up such that it was worth $700K, you wouldn’t think it was “price gouging” to list it at market rate. You’re just trading an asset for cash at the current price. The price you bought it at is irrelevant to the price you’re going to sell it for.
technically the house analogy isn't that good because there are lots of people who won't sell below what they bought for, even if there are no buyers at this price anymore. the house eventually sells if the seller is forced to sell, but price in such cases isn't necessarily 'correct' either. more liquid markets make better examples.
> technically the house analogy isn't that good because there are lots of people who won't sell below what they bought for
Just ignore the downside part of the house analogy because it doesn’t apply to this current DRAM situation where prices went up.
The key point is that if you buy something and its value goes up, you’re not going to offer it for sale at the same price you paid for it. You’re going to sell it at market rate.
Everyone does this, including retailers. It elicits angry cries of “gouging” from people who want to believe retailers are the cause of the high prices and be angry at them, but the market is big. It’s supply and demand.
The retail price of a product is a function of the market rate at the intersection of supply and demand. The price paid for inventory on the shelf doesn’t matter.
It works both ways. If retailers bought a lot of RAM at high prices and then the market suddenly dropped, they could have to sell it at a loss.
Some people get irrationally angry at this, but you do it too. If you bought a house for $500K and the market went up such that it was worth $700K, you wouldn’t think it was “price gouging” to list it at market rate. You’re just trading an asset for cash at the current price. The price you bought it at is irrelevant to the price you’re going to sell it for.