What caused miner dealers to become increasingly “invisible” in the next few years?
During the 2022 bear market, many dealers in the miner sales industry temporarily withdrew, including reducing their advertising on social media. Recently, with the bitcoin price starting to recover, some dealers have returned, thinking that miner sales will become easier. However, the reality is that miner sales are even more challenging than in 2022.?
Most of the earliest mining dealers were established by individuals who had good connections with manufacturers. These people could use their connections to purchase miners at factory prices lower than the official price and then distribute them to smaller dealers for sale in a pyramid-shaped sales model.?
However, this sales model no longer works due to several influencing factors.
1. Manufacturers are selling miners directly to customers, resulting in smaller customers purchasing from the manufacturer's website.
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2. Dealers sign annual orders with manufacturers to obtain lower prices and receive thousands or even tens of thousands of miners shipped every month. However, the bear market has caused a significant drop in demand for miners, resulting in an accumulation of miners in warehouses waiting to be sold.
To sell their inventory quickly, dealers must lower their prices, leading to price erosion. As a result, the price of bitcoin increases while the price of miners decreases.
It is unlikely that the price of miners will increase once all the accumulated inventory is sold. However, there is a hidden factor that we have overlooked: electricity costs.
The mining industry heavily relies on electricity to operate, but the availability of high-quality energy sources is limited. As a result, the future success of the global mining industry will likely be determined by the stability and reliability of energy suppliers rather than the manufacturers of mining equipment. While mining machine dealers will not become obsolete, those that can offer additional value to their customers will be the ones that survive in the long run.