I can confirm that this is a thing... a bigger thing than one might think. I run an IaaS cloud provider and I know off the top of my head several customers of ours who each maintain a fleet of VMs to do this for a variety of products. Eg: Limited edition shoes, show tickets, etc. Some of our customers who do this keep the VMs running and some fire them up only when needed. Some use custom software and scripts and some use purchased software designed specifically for the sites and products they want to beat others to.

How do you know that people are doing this with your VMs?

Jeez put away the pitchforks. Many providers offer support, too and therefore would have a relationship with the customer.

I didn't see any pitchforks, it was just a question.

Regardless of how he knows, you can also google "sneaker bot" and you'll find a vast underground that deals in this trade of scalping limited edition sneakers.

I'm surprised the customers would openly discuss it, even to their provider. The less people that know about it and do it the better I would think.

Surprising or not, they do. I suppose some people may feel as you do, but many do not. Many of our customers look at us as a resource for how best to use the Infrastructure we offer as a Service and share a great deal of detail.

Large operations always tend to communicate with their service providers at some level.

Likewise I imagine these types of companies tend to generate some level of complaint from sellers to the provider. They are really aggressive bots that can create attack level traffic spikes, and break a sellers TOS (snicker) in some cases.

My question exactly. Will need to ensure I don't ever use OPs service

People call on the telephone and discuss their plans, requirements, and business models before signing up. Often, once they are customers they may discuss with us ways to optimize. We check in from time to time and often they call us about their upcoming efforts to see if we have input. Of course there are some that we don't hear from at all, but whose web site at their email domains clearly spell out their businesses.

And you talk about what they're doing on a public forum?

It's a common and well known business model. We have Web hosting companies, game servers, mobile apps, cloud-managed gizmos, SaaS platforms, etc... all are common well known business models. Do you know any more about them because of this post or the information I have talked about? Maybe you didn't know they business model exists.

do you think his equates to doxxing someone?

I should add that some sites (especially ones counting on ad revenue, or that don't want "scalpers") may consider bots hitting them as abusive and will either contact us or just block specific IPs. At that point we know what is going on. Our customer may call us because "it stopped working" when they have been blocked or rate limited. I will point out that many sites that bots hit do not care at all and know it is happening.

Ha don't jump to conclusions so quickly. We spend > $50k/mo on AWS and you better believe our solution architects deeply understand our product and architecture.

Reminds me of why I still prefer brick and mortar. Yes you may have to camp out, but it definitely has a better success rate than trying to compete against machines.

> it definitely has a better success rate than trying to compete against machines.

For now... ¬_¬

Real life bots: http://www.businessinsider.com/people-in-pasadena-are-paying...

The goal is to resell the stuff. Those traders are just gambling that the resell price is higher than the original price.

It's the first time I saw "snipers" in this context. "Sniper" is the name we use in Poland for scripts set up to bid at eBay-like auctions. They are the reason I never buy anything from an auction (where I have to bid), and I stick only to buy-now, retail offers. It's because on any auction it's guaranteed that there is always some schmuck that will outbid you by 1¢ at the last microsecond with a sniper script. Proliferation of those scripts makes auctioning a waste of attention and emotional investment.

Its a flaw in the auction design. A simple rule as the closing time will be extended by x minutes after the last bid would solve this.

Our local auction site here in New Zealand, TradeMe, does that. Any bid in the last 2 minutes resets the clock to 2 minutes. Works pretty well for the seller, as prices tend to jump dramatically in these two minutes.

There is also at least one auction site with a similar business model that is practically a legal scam; bids cost money/points, and every bid increases the price by a fixed amount and extend the clock. Non-successful bids aren't paid back, of course.

There are actually some good arguments for a cost to bid system.

In theory it encourages people to bid their true preferences rather than waste time sniping.

Personally I find sniping quite enjoyable (as an idle-activity), but I also consider "recon" part of it (finding mislabelled or less widely known items that get the same job done usually results in huge effective discounts).

Would including a CAPTCHA for items expected to sell out quickly prevent this?

I was doing this (refreshing).

I had the Amazon app open on my phone and the website on my MacBook. I added it to my cart from the app at approx 14:00:01 ET, and by the time I clicked the cart and then checkout I got an error message saying the item was sold out.

I was so pissed that this happened, because I had been planning to follow this diligently since the day it was announced, and I had no less than 3 calendar events in my phone so that my day would be replete with reminders. I had the other websites that were supposedly selling it open as well, as a failed backup plan.

I should have written a script.

My gf just got one at Best Buy. They seem to have plenty.

But... but that's like IRL. There are people out there.

No robots there yet?

(Probably those Aibos are not to be trusted with cash.)

We had lines outside the local best buy in our small WV city.

In Australia, the NES Classic Edition came out on Thursday - the physical copies at Target etc. too were sold out in minutes, too. Some of the Facebook comments said that their local shop only got a few boxes which were gone mmediately: https://www.facebook.com/NintendoAUNZ/videos/714922218664914...

As usual, Nintendo doesn't get their customers and is completely unprepared.

I think they know exactly what they're doing. Selling out in minutes causes news stories, and here we are.

Doing things for press coverage in order to get an increase in future sales is a great idea for a startup with limited marketing funds, but Nintendo aren't exactly in that position. The fact is Nintendo failed to supply a sufficient amount of their product, and that has created a demand in a secondary market. All of the profit generated in that secondary market would have gone to Nintendo if they'd managed their supply properly.

Unless it's a campain aimed at destroying sales of it's competitors during Christmas season. Remember that announcement for a new console planned for March? That's a startup marketing thing too, right?

> All of the profit generated in that secondary market would have gone to Nintendo if they'd managed their supply properly.

Untrue. The secondary market is currently selling units at a huge markup. I don't think we have a great indication at the moment on how fast the secondary market is moving; it's possible that, whilst Nintendo might have undervalued demand, the resellers are overvaluing it. As others point out, this also helps drive demand to an extent - it's a phenomenon Apple appears to take advantage of from time to time.

A model against this would be to announce that the first million copies will be at a 50% markup. It would mean that Nintendo (or Apple or whatever consumer-land vendor) can capture the added value, while using moderate production lines, stretching the delivery over time and still get the press releases about "We got our hands over the product, here's what it looks like".

Some sort of "exponential decay" pricing by the manufacturer would probably be very much frowned upon.

They lose nothing monetary.

Suppose they contract with the manufacturer to set up 10 production lines to meet initial demand, what happens when demand drops in the New a Year and 'everyon' forgets these exist? They'll have to decommission most of the lines, which also has a cost. Also if they over-supply the initial surge of demand even a little, they could be stuck with months worth of tail end sales. Then what do they do? Decommission all the lines for that time? They'll have to pay for warehousing the product as well. There are a lot of factors to consider, it's not just a matter of magicing up however many units are needed at any given time.

Have you looked at the teardown of what this product actually is? Its using a very cheap Allwinner chip inside a plastic case, a similar board can be had for $7[1]. I highly doubt Nintendo is producing much in house, they probably have PCB manufacturing and final assembly outsourced, there isn't much to this device[2] physically.

[1] - https://liliputing.com/2016/11/orange-pi-zero-7-quad-core-de...

[2] - http://www.cnx-software.com/2016/11/08/nintendo-nes-classic-...

This customer exploitation pattern is so common there should be an acronym for it.

Reminds me of the initial release of the Wii. Seems like a strategy to create scarcity and increase demand.

Possible, but Nintendo do not seem like the sort of company that needs to use direct marketing tactics to sell their products.

Doesn't need, but - if it leads to increase in sales or brand exposure (via increase of press covering the situation) - it may as well engage in such tactics anyway.

But the weird thing about the brand exposure is that before this sale, there was zero advertising - it was all word-of-mouth, without Reddit I wouldn't have even known this thing existed. Nintendo didn't do any advertising in Australia I saw, nothing on TV, at the shops or on buses like it happened with the regular consoles. I don't get it, and press coverage is still minimal outside of the circles that knew about this thing already (tech press).

Nintendo has had a history of unexplainable supply shortages for in-demand items. (case in point: Amiibo)

Ha .. not unexplained. I am part of a few "deals" websites. People inexplicably want to collect all of them! They have predictions on what Amibos will sell out, so people can buy 'em sooner rather than later. Lots of crazy stuff. I thought it was to make a profit but it seems there are genuine collectors out there.

Digital age Beanie Babies?

http://www.slate.com/articles/health_and_science/science/201...

I've been calling them that for years.

Also this year's Fire Emblem Limited Edition (really frustrating, the box is excellent – they are now sold for at least 2x the original price) and probably any 3DS special edition.

But consumers with too much money are also helping this "economy" with their purchase decisions. That eBay NES Classic in the parent comment was just sold for $610, more than 10x the retail price, and there are many other offerings. Just take a look at the completed listings and the prices that were paid.

It's worth pointing out that "sold" doesn't actually mean the buyer has any intention of paying. It seems fairly common in this scenario for people to put fake bids on products like this for whatever reason. And the winner in that particular action has a 0% positive feedback rating, which doesn't exactly inspire confidence.

When I was in college, I resold high demand systems around the holidays. Some examples of this include the slim PS2, the Nintendo DS, and the XBox 360.

I can tell you from this experience that people pay. The bids are not joke bids. They are people who are willing to pay market rate for high demand items because they want them now. God bless them. Furthermore, you can require payment before purchase.

How did you get these systems ?

I did this a couple times for limited edition systems. You just have to wait in line early and get as many as the store will let you.

It's not a tremendous amount of money but if you sell a few $300 systems for 2-3x the original price and you're a college student or such, it adds up fast.

The last time I tried doing it was for the limited edition pikachu 3DS; upon seeing a line of 50+ people in Oakland (most of which probably had the same intention as me), I decided that the gain was not worth it anymore.

I recall my friends doing this for the Wii back in the day. They put in reservations at GameStop and checked daily at various stores. I'd imagine it's the same way. You just have to get lucky sometimes.

Good fortune.

While this does happen once in a while it's not as common as you make it out to be. I resold Chewbacca masks[1] during that hype for an obscene markup and everything I sold was a real transaction. I sent the masks, got paid, everyone was happy. But really, people paid and they sold fast, within the hour.

https://en.wikipedia.org/wiki/Chewbacca_Mask_Lady

> It seems fairly common in this scenario for people to put fake bids on products like this for whatever reason.

One popular reason may be "boosting" the auction. A common practice is that when someone puts an item for sale as an auction, they will ask a friend to bid on that item when the auction seems to be settling on too low a price. If it happens that after one of such boosts nobody else bids and the friend ends up winning, the friend will just pick "personal collection"/"cash on delivery" as payment/delivery options and never pick the item up; the original owner will wait few days and post the item on an auction again.

Don't forget the Pokemon Go Plus which is still out of stock. https://smile.amazon.com/Nintendo-Bluetooth-Bracelet-Not-Mac...

They probably use scarcity to hype the product.

See Cialdini's Influence.

This has been going on since the first days of ecom. It's just scripters and bots that are more easy to get ahold of now so even more people do it. But the demand is real if you look at the completed auctions! Scammers don't let the auctions complete since they have to pay fees on them. There are a shocking number of people who just don't mind paying up for something hot.

Disclosure: I did it in college for beer money - http://www.nytimes.com/2000/12/17/us/sony-toy-is-less-costly...

That's the answer.

Actually Amazon itself has listing from 3rd party sellers at crazy prices.

I was tempted to buy one, even at ~£70. Then I looked at my desk and saw my Rapsberry Pi with this case http://www.ebay.co.uk/itm/3D-Printed-NES-inspired-Raspberry-... and a USB NES control replica and decided to forget about the mini NES.

Makes for a good story.

I mean, how many would they have made? 2,000?

They know they can do a second run before Christmas. By then they would know if they should make 20,000 or 200,000...

Traditionally, toy companies will have a "tent pole" item they hype up and sell out of before Christmas (originally Cabbage Patch Kids but later on Elmo, Wii, etc.) This forces parents to less desirable accessory products for Christmas. Mysteriously after Christmas the tent pole item is in stock.

Eric Clark's book "The Real Toy Story" goes into the origin of this and other trends [1]. Nobody is really wild about the idea, but the industry is kind of forced into it because sales are literally all within a 3 week period. Miss it and you're dead. Tactics like the 'high demand, low availability' hot Christmas toy are a matter of survival.

[1] https://www.amazon.com/Real-Toy-Story-Ruthless-Consumers/dp/...

Actually what really happens is that store managers have to decide what to stock in May, seven months before Xmas.

Source: I was manager at a large store.

The NES classic was announced in July, though. Would retailers have been given some advance notice under an NDA, or is this an exception?

The retailers are flown to this place and treated like kids in a candy store, so they need to interact, feel, and try all new products, because a bad investment in inventory (too low or too high) will affect the store.

My best guess is that they are shown a working prototype, but for a company this huge (and protective) I don't know.

I'm not getting how a shortage helps the companies? (Do I have to buy your book to find out?..)

If they sell the hot item then they make only the margins for that one item. If they "sell out" of the hot item, then parents either buy an alternative (you can't just get your kid nothing for Christmas), or they buy the accessories for the hot item with a promise to get the hot item once it becomes available again. Then after Christmas, they actually get the hot item, because the kid still wants it (and their one friend who has it is really cool).

It spreads demand out over time and over their product line. Similar strategy as how airlines advertise cheap fares to get you to fly on them, but then offer upgrades, early-bird check-in, more leg-room, additional checked bags, alcohol on the plane, etc. to make money once they have your business.

There's no way they can be sure the customer will buy another item from their own product line instead. Surely they're more likely to buy a competitor's product?

They don't have to, as long as more buyers do than choose to not buy the "hot" item after Christmas. In general it's a good thing to increase the size of your industry, as long as you capture some (not all) of that increase.

Also, I wouldn't bet on them being more likely to buy a competitor's product. Brand recognition counts for a lot, particularly with toys & other discretionary purchases. Some will, of course, but most people once "primed" will buy something close to what they initially had in mind.

This was a strategy practiced long before the invention of e-commerce. It works perfectly for brick-and-mortar shops because physical distance to the toy shop (in winter!) guarantees more return customers.

It's not my book. I'm just citing sources because I was very incredulous when I heard this is common practice.

It only works if you have THE hottest toy of the season - something like a product from Star Wars for instance - you create intense demand for the product but limit availability. Simultaneously you provide alternative, inferior substitute product(s) in the same franchise that's less desirable.

The parent HAS to get their child something for Christmas. The child is primed to want the desirable product. The parent drives over town looking for it. Exhausted settles on the substitute product with the promise the child will get the 'real' product after Christmas. The parent spends $50 on the substitute product before Christmas and $70 on the desirable product after Christmas. This nets the toy company $120 so they come out ahead rather than just making $70 had they stocked a large inventory of the desirable product.

Again. It reads like a conspiracy theory. I was surprised to find out it wasn't.

> It reads like a conspiracy theory.

I'm not sure what makes this a conspiracy. It's a producer deciding managing supply of their product to maximize total revenue—not colluding and not doing anything sinister. It's capitalism 101.

How does a company ensure that their product is 'The' hot item of the year? What if several companies decide to do this? It's bullshit.

Thanks for explaining. So what is the inferior product in this case ?

In the toy store case, it's whatever the parents settle for.

Since, as you are implicitly observing, Nintendo itself doesn't have one available, I would agree with your implicit argument that this effect probably doesn't apply here.

But it's still at least an interesting thing to learn about. It really recontextualized some things from my childhood, and forced me to reconsider the fact that sometimes, yeah, it really is a straight-up conspiracy. I mean, yes, there's a danger in reaching for that explanation too quickly, but on the other hand, you can't dismiss it out-of-hand either.

Still, in the absence of an obvious "part two" for Nintendo, I would expect that Nintendo has simply had a hard time calibrating demand for this product. I don't blame them, because it seems like I've certainly seen things that the Internet seems to go gaga over, but nobody actually buys them in any quantity. There's a huge amount of variance I'd expect from their analysis; this could sell anywhere from half as well as the original Nintendo to "a couple thousand units".

I would expect it to sell really well to people who grew up with that nintendo and for whom $70 (game plus extra controller) is now an impulse purchase for the next time you have friends over.

> I mean, how many would they have made? 2,000?

I'm imagining at least an order of magnitude more ballpark-judging by $60 price point and tooling costs for enclosure molds alone.

Just because you found one for sale on ebay doesn't prove the part about the bots at all...

There are over 2000 negative reviews on the Amazon page from people complaining that they were there at 5 and go nothing but errors (myself included).

Amazon own website can't run properly on AWS?

Parts of it don't run on AWS.

I wouldn't have expected that. Any idea which parts and why?

"At the time I was at Amazon, working on the retail site, none of Amazon.com was running on AWS. I know, when AWS was announced, with great fanfare, they said "the services that power Amazon.com can now power your business!" or words to that effect. This was a flat out lie."

https://news.ycombinator.com/item?id=3102129

I remember reading that but somehow forgot about it. It makes me wonder if the creation of AWS was an end run around devs and/or ops teams unwilling to evolve. Very political organizations seem to have such a hard time with big shifts in thinking.

Not just eBayers using bots. They are popping up on local online garage sale pages and on Craigslist for $200+, by what appears to be soccer moms for the most part.

This is 100% drop shipping.

That is not at all what drop shipping is.

  Drop shipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer

It's not possible that today's buyers are having them shipped to their own customers? Maybe somebody set up preorders with bots to hit Amazon to fill the orders. Or found a way in Amazon's system to reserve the item but delay shipping until they get the destination address and collect their markup.

^ Precisely. Drop shippers are the ones who have the infrastructure set up to pull this off, and would have started selling early to capture pre-sales.

$610 was the selling price.

Who in the world wants these so badly? I'm excited to get one... but it's not like I'm in a huge rush to play 30 year old games... If I really wanted to play them right now, I could download an emulator.

Cool points maybe? Those could have tangible value for some people. Like streamers for instance.

You can't stream the output of an emulator?

You can, but you don't get the cool points for showing off the hyped up and hard to find product.

If you had a Wii or Wii U then you can even buy 350+ games on their virtual console.

Isn't this similar to the BF and sales throughout the season with Amazon. Items come up for sale only to be gone instantly (or what appears as such)

I managed to pick one up on the Amazon mobile app. I had to do it exactly at the right time, but there wasn't an issue other than page load slowdown.

(Re)seller here. I got one the old fashioned way, by pounding the refresh button. I actually am unaware of a bot you speak of... do you have an example?

The key to this hustle is to never tell your friends that you got one because their con of 'it's for my kids' is incessant.

Looking at some of the eBay sales data already a few have gone for over 600.

Yay for me!