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’ 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.
Unfair advantages
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.”
Uh huh.
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.
