Grinch Bots Will Steal the Best Deals This Holiday Season

Grinch bots, also known as scalper bots, have won deals at super-human speeds that consumers can't match in previous holiday seasons. However, due to the development of bots in the sneaker industry and COVID-19, the 2020 holiday season will see software bots complete a record number of online transactions.

In 2018, members of Congress drafted a bill to outlaw grinch bots, stating that "Allowing grinch bots to rig prices and squeeze consumers during the holiday season hurts American families, small business owners, product makers and entrepreneurs. We will not allow this market manipulation to go unchecked."

This holiday season, grinch bots will purchase over $100 million of sneakers. In addition, this fast-growing software trend will impact clothing, collectibles, computers, electronics, gaming, and any attractive deal where demand outweighs supply. As a result, consumers will either miss out on the hottest holiday gifts, or be forced to purchase them from reseller platforms like eBay at steep markups.

Below, we outline what grinch bots are, how they work, and share details on the industries that are expected to be hardest hit.

Table of Contents

• What Are Grinch Bots?
• How Do Grinch Bots Work?
• Grinch Bots Will Purchase Over $100 Million of Sneakers During the 2020 Holidays
• Grinch Bots Are Increasingly Popular In Other Industries
• The Leading Grinch Bots Are Now Being Sold for Almost $10,000
• What Holiday Merchandise Will Grinch Bots Target in 2020?

What Are Grinch Bots?

Grinch bots, otherwise known as scalper bots, are software programs built to rapidly purchase scarce goods from websites before humans have the chance to do so. In other words, they automate the checkout process on eCommerce websites. Some grinch bots are programmed and owned by individual hackers. Others, like those mentioned below, are built and sold to consumers known as 'botters.'

The typical features found in grinch bots are:

Botters use technologies in addition to the bots to scalp merchandise. The two most common are proxies and servers. Proxies, offered by companies like Oculus and Surge, are entered into the bots so that each checkout can use a unique IP address. Servers, managed by companies like Amazon Web Services or 10xServers, are used to increase bot speed. Botters host virtual servers in the same locations as the websites they are botting to reduce the physical distance that the data needs to travel.

How Do Grinch Bots Work?

When botters purchase their bot, they program it with their personal information – shipping & billing addresses, credit card info, usernames & passwords. The botters' proxies are also added to the bot.

In anticipation of a sale, botters enter the specific merchandise they hope to purchase from a given retailer. As you can see below, these are stored as tasks in the software.

Once the sale goes live on the target retailer website, the bot begins the checkout process. Botters can manually complete any necessary actions that the retailer requires during checkout, such as completing a CAPTCHA.

Grinch Bots Will Purchase Over $100 Million of Sneakers During the 2020 Holidays

Grinch bots will purchase over $100 million of sneakers during the 2020 holidays. This is consistent with the current size of the U.S. sneaker resale market, which is estimated at $2 billion.

To calculate this figure, we completed a bottoms-up analysis using publicly available data shared by the bots. Many, but not all of the bots, share their transaction volume for each successful sale on Twitter. Cybersole's Twitter account is a good example, where you can find several posts a month celebrating the purchase of thousands of pairs of shoes.

The estimated 2020 holiday sales of the seven bots below is $70 million. This does not include sales from several other leading bots that do not publicly share their transaction volumes.

Grinch Bots Are Increasingly Popular In Other Industries

While bots have the deepest penetration in footwear, they are becoming increasingly popular in several other industries. There are several recent high-profile reports of bots outdueling humans to secure valuable in-demand merchandise, for example:

One of the largest online forums for botters is Reddit, and more specifically the community r/shoebots. While this community started out focused on shoes, many recent threads are about CPUs, electronics, sports cards, and video games. As you can see below, the community has grown exponentially as botting has grown in popularity. It started 2020 at 9,630 members and has 22,400 members as of November 21, 2020.

The sneaker market and COVID-19 are two of the largest catalysts of grinch bot adoption. COVID-19 impacted the market in two ways – it increased unemployment, and shifted retail spend online. These forces led to more individuals looking for a new source of income online.

Bots have also begun advertising their ability to operate on websites outside of the footwear industry. On November 12, Prism announced that its bot works on Walmart.com. In fact, there are several bots that work on both Target and Walmart's websites. Cybersole's website advertises the ability to use its bot on over 270 websites.

The Leading Grinch Bots Are Now Being Sold for Almost $10,000

The market for grinch bots has become increasingly competitive as more software products have entered the market. However, finding and purchasing a copy of the best bots is difficult – bot creators typically limit the number of instances they sell in an effort to prevent their bots from becoming too popular, and obsolete.

As a result, many of the top bots must be purchased through resale themselves. The bot resale website BotBroker.io has sold over 31,000 bots. The pricing data below was recorded from its website in November 2020.

Wrath is currently the most expensive bot on BotBroker.io. As you can see below, its price has been steadily increasing the past year.

What Holiday Merchandise Will Grinch Bots Target in 2020?

The development of bots in the sneaker industry and COVID-19 mean that the holiday season of 2020 will see a record level of grinch bot transactions. The merchandise categories that will see the greatest bot transaction volume will be:

In addition, resellers will almost certainly target flash sales of any high-demand item. Botters have formed 'cook groups' on Discord, where they share the latest information about promising upcoming 'drops' and sales. These groups provide botters an additional advantage over the average consumer.

Unfortunately for these consumers, it's likely that they will be forced to pay a significant premium to purchase the hottest items of the 2020 holiday season. It's hard to compete with the botters and their bots.