Last week I introduced you to a major issue that plagues the secondary IT market… Ghosting Inventory. Didn’t get a chance to read it? check it out here! It seems that many of you were interested in the topic. Probably due to the fact that it is not very well known. I thought that perhaps it may be a good idea to delve into the real impact that inventory ghosting has on the secondary market. Believe me when I tell you it is not pretty, and it effects both resellers and customers, so really it is bad for everyone.
Here’s Why
I touched on the fact that inventory ghosting can skew the secondary market’s view of the product. Saying that ghosting simply skews the way inventory appears on the secondary market is an understatement. Inventory Ghosting presents larger quantities available on the market than what is actually available, meaning the 40 units that you see available for purchase today, is really more like 10 or 20 if you’re lucky. Leaving you with the task of tracking down another 20 or 30 units that do not exist.
Sounds like a major pain, right? Well brace yourselves because that is not the only effect ghosting inventory has on the market that directly effects you. Worse than giving customers and resellers the illusion of a larger quantity of product on the market, ghosting can significantly reduce the market price of said units. As a customer, I know that sounds like great news, but trust me it’s not.
Let me explain.
If you are looking for a specific 48 port switch and you see that there are only a handful available, you will expect to have to pay a premium for them. They are hard to find, you need them, and chances are if you need them someone else needs them too. Basically, you will contact your network equipment reseller knowing that your cost may be a little bit more, because the units are in high demand. Now imagine that you look up that same Cisco Switch and you see quantity 50 available, not only will the prices you are seeing be lower because resellers are always competing to win your business, but now you think they will be easy to find and you can negotiate price with a few resellers.
Sounds awesome right?
Well, it would be if there were really 50 units available. However, if a few of the resellers are ghosting the inventory of another,
who has 10 units physically in their stock, what does that mean for you, the customer? There are really only 10 units available and if that network equipment broker sells them to someone other than you, the units will become difficult to find and the price will skyrocket. To put it simply, the lower cost that the secondary market was reflecting was as much as an illusion as the quantity that was supposed to be available, leaving you back at square one.
Now I do not want you to get the impression that end user customers are the only ones negatively affected by ghosted inventory, because they certainly are not. Reputable network equipment resellers are also effected and believe me when I tell you we despise it about as much as you do. When inventory ghosters’ flood the market, typically via Ebay, with equipment that they don’t have and the market prices of those items plummets, it is the secondary market resellers who actually stock all of their inventory, who suffer.
In short, Inventory ghosting significantly impacts the secondary network equipment market, effecting both customers and resellers. Unfortunately, there is no sure fire way to put an end to inventory ghosting. Luckily, there are steps you can take when buying pre-owned networking equipment, especially from Ebay, that will help you to avoid being caught up in a ghosting situation.
