Nvidia and its AIC partners had a tough time with bot purchases and scalpers. But there are good lessons to be learnt from this and not limited only for Nvidia. AMD circulated a guideline to its retail and distribution partners for using multiple methods to discourage bulk purchasing.
Scalping and Price Gouging with PC hardware
When Nvidia launched the RTX 3080 graphics card, scalpers used bots to purchase most of the graphics card. This resulted in most retailers not having any stocks at all. But at the same time, the RTX 3080 started appearing in other reselling websites with a much higher price tag. AIC units were also not spared. A scummy way of price gouging is not a stranger among United States customers as it was an issue they faced recently with hand sanitizers and toilet papers when the news of the pandemic and eventual lockdown began to spread. This also affected webcams, mostly sold by Logitech, but this issue was never really addressed by the company. Scalpers cleaned the stocks through multiple retail outlets, including from the stocks from Logitech and Nvidia’s own website.
Nvidia did say it was authenticating every purchase manually before shipping to customers. But the scalpers were able to get most of the purchased lot. Due to the scarcity, they were able to re-listed the RTX 3080 variants at a very high price. Nvidia did promise this wouldn’t be the case with RTX 3090, and yet it happened. However, due to the price and performance factor, the RTX 3080 was the most sought card by hardware enthusiasts. Samsung’s inability to quickly ramp up fabrication did not help ease the shortage issue. People even asked me to source a graphics card for a purchase!
Many retail chains and companies were accused and/or called out. Some internet sleuths tracked down certain channels owned by an AIC partner and even Nvidia limiting a purchase outlet to a single retailer. Everything was tried and tested on-the-fly. It had to be since it was an issue not many faced. But unlike the situation with Logitech webcams, Nvidia put their best foot forward. AMD is also following suit.
AMD learning at Nvidia’s expense
On the bright side, this is a good practice. It is better to be prepared, especially when you know someone in your business face troubles with it. AMD is going to release AMD 5000 series.
This is a good initiative by AMD seeing that Nvidia was caught by surprise because of this nuisance and also had a handicap with Samsung unable to churn out 8nm Ampere chips as quick as they expected. AMD will be releasing the Ryzen 5000 series and the RX 6000 graphics card pretty soon. So it becomes important for AMD to prepare its retail partners as best as possible.
Recommended Guidelines from AMD
- Bot Detection and Management: Use real-time bot detection mechanisms and tools to scan and filter site traffic and identify/block known malicious bots.
- CAPTCHA Implementation: Use challenge-response tests to determine if the user is human during the checkout process. (e.g. “I am not a robot” check box, simple math problem, picture/confident or alpha numeric identification or honeypot)
- Purchase Limits: Limit purchases at launch to 1 per end-user. Reject subsequent orders containing the same information, such as name, email address or billing/shipping address.
- Reservations: Use a queue-based notification system which allows customers to reserve their place in line to purchase as stock becomes available in the future. If a product is shown ‘out of stock’, customers have the option to be notified by email once the product is available.
- Manual Order Processing: At launch, switch to manual order processing to properly validate orders with minimal delays.
- Limit Reseller Sales (828): During the 3 weeks after launch, limit the number of sales made to commercial resellers.
- Inventory-to-Cart Allocation: Allocate inventory only when a customer submits an order or set a time limit on how long a customer can hold our product in their cart. Inform customers that purchases are not guaranteed until the order is submitted.
Most of these suggestions are pretty standard recommendations used for website/ platform signups. While it doesn’t solve the problem completely, the recommendations should significantly reduce the bot purchases from an online store front. If popular retail platforms implement these for pre-orders, it solves many modern problems.
On a different note, its also important to encourage end-users to buy from proper retail stores and online websites, rather than from individuals via eBay and even Facebook. Even in India, I’ve noticed there are individuals, including gamers, Youtubers and streamers, who operate a sale/ resale groups on Facebook and WhatsApp. It is a concern when it becomes an issue, rather than if. Group admins and mods need to be proactive assuming they’re not complicit. But I suppose we’ll cross that bridge when we get there.