Before buying a mining machine, learn about the sales network of the mining machine

Chapter 0 Introduction

Buying a mining machine is not an easy thing. Inexperienced people always worry about several issues: whether they will be cheated, whether they will buy fakes, inferior goods as good ones, whether the price is cheated, how to calculate the warranty...

Many people asked me this question. At first I was wondering why so many people asked this question, but later I realized that the process was indeed very confusing.

The answers to these questions are all contained in the sales network / channel of the mining machines . This network is not designed by a certain company, but is formed spontaneously. It is a decentralized community that spontaneously forms the network. Whether it is a Bitcoin mining machine or a graphics card mining machine, they are almost the same.

Chapter 1 Various Mining Machine Seller Roles

The mining machines referred to in this article mainly refer to Bitcoin mining machines, but the sales networks of graphics card mining machines and other dedicated chip mining machines are similar.

The upstream of the mining machine sales network is the mining machine manufacturer , the most famous of which is Bitmain. The mining machine manufacturer is at the top of the mining machine sales network, but mining machine manufacturers generally only do wholesale business and rarely do retail. This is similar to the manufacturers of any product, and manufacturers generally do not engage in retail.

Although mining machine manufacturers mainly engage in wholesale business, they still have a small amount of retail business . Each mining machine manufacturer has its own official website and will regularly release some retail shares for buyers to buy. But the quantity is very small. Basically, no manufacturer will set up offline physical stores to sell mining machines.

The main delivery channel for mining machine manufacturers is distributors. Distributors are not employees of mining machine manufacturers themselves. Distributors are often companies, and some are individuals. Distributors are the second major role in the mining machine sales network. This type of role must be relatively wealthy and buy hundreds or thousands of mining machines at a time.

Distributors usually resell the mining machines they purchase, and some distributors are also mine owners who buy mining machines and mine by themselves. Distributors usually sell mining machines online or offline.

Distributors sell mining machines online basically on WeChat and QQ. Although there are some online mining machine malls, they are not doing well and have low traffic. Offline sales of mining machines became popular in 2017, mainly in electronic malls in major cities, such as SEG in Huaqiangbei, Shenzhen. In the past, electronic malls sold computers, digital products, and various electronic accessories, but after JD.com and Taobao became powerful, the business of electronic malls has become worse and worse. Since 2017, many electronic malls have been rented out by mining machine sellers. SEG in Huaqiangbei, Shenzhen has three floors that are almost entirely occupied by mining machine sellers.

In the manufacturing industry, this two-level sales network of manufacturers and distributors is very common, but there are often one or more official distributors, and we also have professional distributors with very good reputations such as JD.com, Tmall, Suning, and Gome, so the equipment we buy in our daily life and work often does not have as many questions as mentioned in the introduction. But mining machine manufacturing and distribution are different. First, digital currency and blockchain assets have a bad reputation. There are still many idiots in society who think we are doing bad things. There are also many idiots among people who engage in digital currency. They think mining is wrong. Second, because mining machine manufacturing and sales have been around for a short time, they have not developed maturely, and they cannot advertise. Third, mining machines are too professional. So the mining machine sales network confuses the general buyers now.

The production and manufacturing of mining machines is not like mobile phones, where you can produce countless units and store them in warehouses for sale. Instead, there is a certain delivery cycle. Mining machines from mining machine manufacturers are often sold out as soon as they are released. But distributors are a profession, and they cannot say that they only work a few days a year. Moreover, various users have a demand for mining machines 365 days a year. Therefore, in addition to buying first-hand goods from mining machine manufacturers, distributors often also trade in second-hand goods.

Distributors also get goods from each other. For example, if a distributor's customer has a demand, but the distributor does not have the goods, the distributor will find another distributor to get the goods and share some of the profits with the distributor.

Distributors can also be big or small. For example, a large distributor has been selling mining machines for a long time and has its own brand and customers. Then, it will set up offline branches in various cities. Some branches are organized in a franchised manner. Some individuals also use their online influence to become distributors, but they cannot bear the pressure of logistics and stocking goods, so they will be listed under the brand of other large distributors and become a sales manager of the brand, and then they will negotiate the profit sharing. Many of the mining machine advertisements we often see in WeChat Moments are posted by these small distributors.

There is another role in the mining machine sales network, the mining machine speculators . The price of mining machines themselves is still very volatile, and some people will buy them at low prices to stock up and sell them at high prices. This type of role is generally an individual behavior, buying and selling mining machines through WeChat Moments, speaking in groups, etc.

The final terminal of the mining machine sales network is the miners, who buy mining machines for mining. Large miners or miners with good relationships with mining machine manufacturers can directly purchase them from manufacturers. However, the vast majority of miners can only buy mining machines from distributors and speculators.

In summary, there are several roles in the mining machine sales network: mining machine manufacturers; distributors; speculators; buyers. Mining machine manufacturers often only do wholesale business, and distributors are divided into large and small, online and offline.

Chapter 2 Logistics of Mining Machines

After all, a mining machine is a physical object, and explaining the mining machine sales network must involve logistics and capital flow.

The first logistics stop for mining machine sales is the warehouse of the mining machine manufacturer , and this is true for any product. Mining machines are electronic products, and generally there is an aging step, that is, the manufacturer will plug in the power and connect to the Internet for mining, and all mining machines will go through this process. The aging process is often the mining machine manufacturer's own mine. There may be two types of manufacturer's warehouses. One is a common warehouse that neatly stacks and packages the entire mining machine. Another type of warehouse is the manufacturer's own mine, where the mining machine is working, or in the aging process. Manufacturers generally refer to these two warehouses for shipment, and large trucks will go to these two warehouses to load goods.

The second stop of mining machine logistics is the process of distributors purchasing mining machines. Distributors purchase mining machines from manufacturers in the form of wholesale, and the manufacturers deliver the machines. The logistics of this process is the movement of mining machines from the manufacturer's warehouse to the distributor's warehouse.

Distributors' warehouses are usually divided into two categories: warehouses and mining farms. Distributors often do not have factories, and the rented stores cannot accommodate so many mining machines, so large distributors often rent a warehouse from logistics companies. For example, companies like Deppon Logistics have special warehouses for rent. Small distributors may directly rent a larger store and store the mining machines in the store. Offline stores like Huaqiangbei SEG Electronics Mall also have warehouses. In addition to renting shops, SEG Mall also has warehouses for rent.

Distributors who have mining farms often send the purchased mining machines directly to the mines to mine directly, selling them while they are mining.

The third stop of logistics is the process of miners purchasing from distributors, which is the process from the distributor's warehouse to the buyer's mine. The simplest way is to buy and sell mining machines offline, where money is exchanged for goods. For example, if you go to Huaqiangbei to buy a mining machine, both parties agree on the price, pay the money, and the goods are delivered. The logistics can be taken away by the miners themselves by renting a car, or by the seller providing a car. For online transactions, the distributor finds a logistics company to ship the goods to the location specified by the buyer.

In summary, the logistics of the mining machine sales process is the movement of the mining machine between the following locations: the mining machine manufacturer's warehouse or mine, the distributor's warehouse or store or mine, and the buyer's home or mine.

Chapter 3 Fund Flow, Profit and Risk Distribution of Purchasing Mining Machines

The flow of funds in the mining machine sales network is very simple, but the profits and risks are the most confusing. This is because the price volatility of the mining machine itself is close to that of Bitcoin, and the length of the warranty period has an extreme impact on the price.

The cash flow of a sale is simple, the buyer pays the seller.

There are differences between spot and futures in the purchase process. Spot means that the goods can be shipped after payment. Futures means that the payment is made first, and the seller will ship the goods after the agreed expiration date, such as two months later.

The price is a common misconception. First, the mining machine manufacturer will publicly disclose the price on the official website, and almost everyone knows the manufacturer's price. But after passing through the hands of distributors, the price is often only higher. Distributors have to make money and bear volatility risks. Distributors also have operating costs. If the buyer cannot buy the goods directly from the mining machine manufacturer, he can only ask several distributors to negotiate a good price.

The price of mining machines is basically positively correlated with the price of coins. When the price of coins rises, the price of mining machines will rise, and vice versa.

The price of a mining machine is closely related to the warranty period. The warranty period of a mining machine is determined by the date of manufacture, which is generally six months. The warranty period of a machine you buy from a distributor will only be less than six months. The warranty period or the date of manufacture is an important parameter for bargaining.

Chapter 4 Basic Methods to Buy the Right Mining Machine at a Reasonable Price

I haven’t bought a mining machine for a long time, and the methods I can think of are the most commonly used methods in our lives.

The basic parameters for evaluating mining machines are brand, computing power, power consumption, and the date of manufacture to measure warranty and second-hand goods. The earlier the date of manufacture, the cheaper it is. When you inquire, inquire based on these four parameters. Ask more and you will know the market situation. After you have asked several companies about the pros and cons of the brand, you will know which brand is good. If it doesn't work, join a WeChat group to ask. Computing power is a parameter to measure the output of a mining machine. The number of coins that can be mined in a day is calculated by computing power. Then you can check the price of the coin and know how much money your machine can mine. Power consumption is a measure of how much electricity your mining machine consumes, which is the biggest cost after you buy a mining machine. The earlier the date of manufacture, the cheaper it is.

The best thing is to buy directly from the manufacturer. Of course, you need to have the ability, money, or time to watch the official website to buy it.

Buy from distributors. If you are a complete novice, it is best not to buy futures first, but start with spot goods, and spot goods from offline stores. Mining machine scammers basically sell futures, collect your money, and do not ship to you.

Comparing prices from different stores is a must. But where can you find distributors? Going directly to offline stores is the most reliable. Generally, offline stores must have online stores, but not vice versa. Online stores are not in places like Taobao and JD.com. Mining machines are not allowed to be sold on Taobao now. Online stores are all WeChat accounts. So go to the e-commerce mall in your city first, where you can collect information. Ask a few more stores and you will know the approximate price.

If you want to buy directly online, you have to find big distributors, people who are well-known in the community. But if you are an outsider, you don't know these people at all, and there are fake scammers everywhere on the Internet.

It is relatively simple to inspect the mining machines. They all have factory serial numbers and the seller will teach you. If the seller doesn’t teach you, don’t buy it.

The appearance, color and dust of the mining machine are also a bargaining criterion. Those that are ugly and dirty will certainly not be sold at a good price.

Chapter 5 Conclusion

That’s all I know about buying mining machines.

Reposted from Huang Shiliang's official account

Original link: https://mp.weixin.qq.com/s/mUb2xbiEiNM-ou9YodEdrg