Mimimi: Community Edition

*Gulp.* Say whaaaaat?! *Gasp!* Over 1,300 francs for the new Nvidia 2080 Ti?

…read all other comments here.

Let’s be clear, I’m not trying to defend digitec’s pricing policy. That’s not my job. I will, however, try to explain how prices are determined.

Nvidia says that the 2080 Ti costs 999 $. You’re selling the 2080 Ti for 1,350.–. So you’re making a profit of 351.– francs per card!

Nope.

So how much are you making per card?

That's confidential.

So tell me how much you're roughly making.

The 2080 Ti for over 1,300 francs costs us far more than 1,000 francs to buy.

Are prices extremely steep because Swiss salaries are high?

No. Medicine, food, cosmetics, magazines and many other things are cheaper in Europe than in Switzerland. However, when it comes to electronics, Switzerland has very competitive prices. Take the iPhone X with 256 GB memory in grey. It’s currently available from digitec for 1,257 francs. In Germany, the cheapest offer costs the equivalent of over 1,275 francs.

So salaries don’t have an impact?

Yes, they do. But they don’t play a key role.

So what does play a key role?

Market mechanisms, pay levels and consumer behaviour. As a customer, you want to pay as little as possible for a product. As a manufacturer, you wan’t to make as much money as possible. Nvidia only produces the chips. ASUS, MSI & Co. produce the graphics cards and deliver them to importers or wholesalers. These, in turn, deliver them to retailers such as digitec. All parties involved want their slice of the cake.

But that doesn’t explain why Nvidia is advertising the card for 999 dollars and you want 1,300 francs for it!

Globally active manufacturers generally divide planet earth into various market segments that roughly represent the following economic regions:

• Asia-Pacific (APAC)
• Europa, Middle East and Africa (EMEA)
• Nord, Central and South America (AMER)

The company determines base prices for different segments. The economic regions are then subdivided into regions that follow political or regulatory requirements. For Switzerland, this would be the European Economic Area (EEA). The larger the company, the more likely it has a specific country representation.

The final producers analyse the respective economic region’s price level and try to optimise the price, i.e. set it as high as possible. For internal markets like Europe, the price must be identical. Otherwise, German retailers would import graphics cards from, let’s say, Poland until they ran out.

But that’s not fair towards Polish gamers!

You’re totally right. The median salary in Poland in 2017 was 980 euros. In other words, an average Polish citizen has to work for more than a month to afford a graphics card. A totally extravagant luxury item. So this might be your cue to stop with the complaining.

Hang on a minute, that’s still crazy expensive!

Well, initially, these cards will only be available in minute doses. This means the supply is scarce. And all you need is relatively few purchasers willing to pay these amounts.

Are there actually people out there willing to pay these prices?

You bet there are. The more upmarket the model, the more orders. The GeForce RTX 2080 Ti DUAL O11G was ordered more than the RTX 2080 Ti TURBO 11G.

So the answer to why graphics cards are so expensive: Because the supply can be sold at that price. It’s the consumers’ fault.

They’re a bit dumb, aren't they?

That makes you all the smarter. So stop getting upset about the whole matter. Or give in and get one. I know you want to.

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