Print

Please login or register.
1 Hour 1 Day 1 Week 1 Month Forever
Login with username, password and session length

[dragdeler]

-snip-

[Reelya]

There exist more than one shop owner and the shop owner who's more sensible at setting prices makes more profit than the other guy. People in business can work out that their competitor is shifting more units than they are. If you're overcharging, it doesn't take long for that to come back and bite you and you're out of business.

Also individual shops do have price changes, and they can notice that if they e.g. raise the price by 20 cents how much that impacted on sales. You don't need the whole graph, but you can work out the slope of the graph at the current price-point and extrapolate a little in each direction. Say you raised prices by 20 cents and saw a drop in sales of 30%, you can pretty safely say then that lowering the price by 20 cents the other direction would have resulted in about an equal increase in sales. You don't need to work out the entire demand-graph, just the gradient near your current price.

Customers are in fact very price-sensitive, so it's easy to get this data. If customers were not price-sensitive then you could in fact just keep ramping up the price. The fact that this doesn't happen is in fact the proof that shops know customers are price-sensitive. That's one of the reasons shops have specials and the like. Specials give you data about the gradient of price-vs-sales. If you had a "10% off sale" and sold twice as much of one product as a result, you'd be sensible to permanently lower the price to that amount.

Also, given X amount of sales at price Y and a rough idea on how price changes affect sales, you can work out how much to change price in response to a change in the wholesale price. That doesn't need any "crystal ball", just your own knowledge of the current demand and how responsive customers are to price.

[Loud Whispers]

Such competition falls apart when you involve large corporations with sufficient clout needed to manipulate supply and demand, creating artificial demand or artificial gluts or scarcity in commodities or products as is necessary - diamonds for example. Outright monopolies too can act with impunity for as long as they face no antitrust lawsuits, while a monopoly is not even necessary for price fixing between businesses which are acting in deliberate or intuited collusion. For example there has been a recent long debacle surrounding milk prices in the UK, wherein all of the large retailers maintained the same policy with their competitors regarding purchasing milk at prices which put British farmers at a loss with every unit sold; but nevertheless raising prices on British consumers for an even greater increase in profits. A corporation doesn't need to cooperate with its competitors to see that its competitors aren't lowering their prices, and subsequently there is no need for them to lower theirs either. In such an instance, overpricing doesn't bite them in the arse, and consumers can go fuck themselves.

[Reelya]

Even with price fixing, overall sales will drop if the price is too high, so too-high prices are still counter-productive to making money.

What competitive pricing does is drive prices lower than the optimal profit-point overall.

[Kagus]

There's a Norwegian chain grocer down the way, one of the select few predominant food chains in Norway. This chain brands itself with low prices, and particularly low prices on fresh fruits and vegetables. Appropriately, their color scheme is bright green.

This store just completely ignores the existence of the non-chain Turkish grocer right across the street from me, despite the Turkish place having a vastly larger variety of greens at much lower prices. I remember in particular there was a special deal over at the Norwegian store, Kiwi (yes, it's a bright green store focusing on fruits and vegetables, and it's called "Kiwi"), for Pakistani mangoes. The special was that, normal price per mango was 15kr a piece, but you could buy two for 20kr.

On my way home, I walked past the Turkish place and saw that they were also selling Pakistani mangoes. 5kr per each.


The thing is, Kiwi is an entrenched brand, and Norwegians are highly skeptical of anything (and anyone) that they didn't grow up knowing. So Kiwi can freely charge two to three times as much as the other store simply because they know they can get away with it. They don't have to care about the competition, because it's not really competition.

As for competition between the primary grocery chains in Norway, that's not really a thing because all the chains are owned by the same supergroup... Because that's fine, apparently.

[Reelya]

Again, the point is that competition isn't the point.

If the store Kiwi changes their own prices, they know that this will affect sales up or down. So they set all prices at the medium-point which give themselves the best profitability. "gouging" is counter-productive, because you lose money, regardless of competition or no competition. Stores don't want to get the "most per sale possible" they want to balance selling a lot with making money, so prices remain in a medium range no matter whether there's direct competition or not.

e.g. say I have the only store in town that sells bananas, so I go "hahah! $100 per banana, suckers!" ... then, people just won't buy any bananas, and I end up losing money. There's a "sweet spot" between giving it away at cost (no profit) and charging too much (also, no profit), and that's the price point shops look for. "competition" only shifts this price-point a little: the main determinant of price is the game played between customers and the store.
 
The only time pure price-gouging is really profitable is when people have no choice but to buy - such as selling bottled water in the desert. Or selling insulin to diabetics, which is effectively the same thing.

[Yoink]

Maintenance mode is over at last.
Anyone got any idea what that was about?

[hector13]

Maintenance, obviously. The clue’s in the name, Yoink :p

For serious though, no idea.

[Rolan7]

The message changed from "brief maintenance" (iirc) to maintenance about a thousand bajillion hours ago.

Honestly good communication and, as far as I can tell, good backups.

[smjjames]

Eep, had a 504 error momentarily for the forum, thought it was going down again.

[KittyTac]

Check the Happy thread, Toady made a post there explaining everything.

[Yoink]

Oh gods, my willpower has failed me. What have I done?! They were just sitting there at the supermarket looking so damn sexy, how could I resist? I'd been so good...

Spoiler: Pray for me (click to show/hide)

Seriously though, they were 30% off at the supermarket. Got some jam, too. This is gonna get messy.

Apologies if the image is weirdly sized; it looks fine on my phone but who knows.

[JoshuaFH]

I want to know what these products are, I have a vague idea of what crumpets are despite being American and thus genetically engineered to be ignorant of foreign cultures, but on the right, is that... cheese? Never seen cheese like it but it makes sense.

[Reelya]

Those are the crumpets, not cheese.

You stick the crumpets in the toaster, they have a very crunchy base, and those holes on the top. You put butter on, and it melts into it. Toast just doesn't compare, although I think crumpets are way more unhealthy for you to eat all the time than toast. They're one of those "incredibly unhealthy but totally worth it" things, but you need to toast them until they're crunchy and melt butter into them.

They're probably the most worthwhile British food you could go and look for. They make muffins taste like sawdust in comparison.

BTW Yoink, Aldi sells 6 round crumpets for $1.

[Tack]

Do you wear a sea shepherd beanie around most places?
I mean, I can't think of anyone who would be particularly against it, but heck.