Saturday, July 08, 2006
You might think discrimination should not exist in a free society but it is allowed. I am going to expose the collusionary practice of price discrimination and show how businesses are allowed to charge more to certain customers based on class. The entire wholesale/distributor industry discriminates by selling only to a select few (usually higher class individuals). It is collusion because they have all decided not to sell to consumers to artificially inflate prices for the retailers. Again, this is called collusion which is illegal in our country.
I used to work in produce for Kroger back in the mid-eighties and I remember finding a wholesale price list my boss accidentally left out. The item that stood out in my mind was they paid one penny a pound for potatoes and resold them for 99 cent per pound. But if you tried to buy those potatoes from that wholesaler/distributor at one penny per pound you would be turned away. Why? Isn’t my money good enough? But I’m not a rich corporation or business so they will refuse to sell to me.
When you think about it, we don’t need retailers; consumers should be allowed to purchase directly from the wholesalers. All retailers are good for is driving up prices; they offer nothing else. But consumers are not allowed to purchase directly for the wholesaler and this is collusion at its finest. If you locate one of these wholesalers or distributors and try to buy something you will be denied unless you have a tax ID which you can only get if you have a business license.
Each wholesaler or distributor should be able to sell to any consumer, whether they are business or private homes but they want to maintain a higher pricing scheme so they elect to sell only to other businesses. Do you realize how cheaper things would be if we were allowed to do this?
I’ll give you another example of this collusion. A furniture store near my home announced a going out of business sale. We have wanted a new bedroom set for quite sometime so we went but the prices were horrible for a going out of business sale, only about 10%-25% from the full retail price. I found out later if you were a business and shopped there you could get a discount on the merchandise for as much as 75% from the retail price. Why couldn’t I get that same deal? Who cares who I am as long as they get the money? This industry takes care of its own by practicing collusion which is illegal in our country.
Another example of collusion is I used to work for a printing house, one of the biggest in the world. They printed many of the educational books both in the collegiate and high school levels. We print books at a cost to the publisher of $3 - $5 each. Then the publisher sells them to the students at $100-$150 each!!! They do nothing except ship the books to the schools and give a few pennies to the author. I don’t know about you but that kind of profit really pisses me off!!
One final example and I’m done. When I was younger I collected baseball cards. I used to get the monthly Beckets Guide that would tell me the values of my cards. Well I had several Ozzie Smith rookies that were valued at $90 so I decided to sell a couple. I took them to the local baseball card shop where he had one for $90 so offered him two more but he would not pay me more than $20 for each card. What I did not realize is the Beckets is for a consumer buying cards, but businesses have an entire underground of pricing that was far cheaper than I could obtain. That was my introduction to pricing discrimination practices in our country. Businesses get things cheaper than people.
Collusion is illegal in this country so why doesn’t the government go after these businesses? Because of this, I am going to get a tax ID and a business license so I can gain access to this underground and get goods at a reasonable price. I should not have to do this but the rules are against us, so if we don’t start getting smart these businesses will suck us dry.
Some of the bigger businesses like Wal-Mart have already figured out that cutting out one level in the chain will decrease prices. They use a practice call lateral positioning where they are their own wholesaler\distributor. That is one of the reasons they can sell goods cheaper than anyone else. They cut out a whole level of business. This also gives them the ability to penetrate smaller markets and drive everybody else out, because they can sell items to the consumer cheaper than these smaller businesses pay for them at the wholesaler.
What needs to be done is a non-profit retailer that acts as a wholesaler and a retailer. This business buys directly from the manufacturers and then sells directly to the consumer. Imagine how cheaper things would be. This business would exist to keep prices more affordable for all. All the profits would go to pay employees a decent salary and give them free healthcare. Maybe then the poor could afford more items and those of us with more income could retire earlier. Am I a dreamer or what?
I used to work in produce for Kroger back in the mid-eighties and I remember finding a wholesale price list my boss accidentally left out. The item that stood out in my mind was they paid one penny a pound for potatoes and resold them for 99 cent per pound. But if you tried to buy those potatoes from that wholesaler/distributor at one penny per pound you would be turned away. Why? Isn’t my money good enough? But I’m not a rich corporation or business so they will refuse to sell to me.
When you think about it, we don’t need retailers; consumers should be allowed to purchase directly from the wholesalers. All retailers are good for is driving up prices; they offer nothing else. But consumers are not allowed to purchase directly for the wholesaler and this is collusion at its finest. If you locate one of these wholesalers or distributors and try to buy something you will be denied unless you have a tax ID which you can only get if you have a business license.
Each wholesaler or distributor should be able to sell to any consumer, whether they are business or private homes but they want to maintain a higher pricing scheme so they elect to sell only to other businesses. Do you realize how cheaper things would be if we were allowed to do this?
I’ll give you another example of this collusion. A furniture store near my home announced a going out of business sale. We have wanted a new bedroom set for quite sometime so we went but the prices were horrible for a going out of business sale, only about 10%-25% from the full retail price. I found out later if you were a business and shopped there you could get a discount on the merchandise for as much as 75% from the retail price. Why couldn’t I get that same deal? Who cares who I am as long as they get the money? This industry takes care of its own by practicing collusion which is illegal in our country.
Another example of collusion is I used to work for a printing house, one of the biggest in the world. They printed many of the educational books both in the collegiate and high school levels. We print books at a cost to the publisher of $3 - $5 each. Then the publisher sells them to the students at $100-$150 each!!! They do nothing except ship the books to the schools and give a few pennies to the author. I don’t know about you but that kind of profit really pisses me off!!
One final example and I’m done. When I was younger I collected baseball cards. I used to get the monthly Beckets Guide that would tell me the values of my cards. Well I had several Ozzie Smith rookies that were valued at $90 so I decided to sell a couple. I took them to the local baseball card shop where he had one for $90 so offered him two more but he would not pay me more than $20 for each card. What I did not realize is the Beckets is for a consumer buying cards, but businesses have an entire underground of pricing that was far cheaper than I could obtain. That was my introduction to pricing discrimination practices in our country. Businesses get things cheaper than people.
Collusion is illegal in this country so why doesn’t the government go after these businesses? Because of this, I am going to get a tax ID and a business license so I can gain access to this underground and get goods at a reasonable price. I should not have to do this but the rules are against us, so if we don’t start getting smart these businesses will suck us dry.
Some of the bigger businesses like Wal-Mart have already figured out that cutting out one level in the chain will decrease prices. They use a practice call lateral positioning where they are their own wholesaler\distributor. That is one of the reasons they can sell goods cheaper than anyone else. They cut out a whole level of business. This also gives them the ability to penetrate smaller markets and drive everybody else out, because they can sell items to the consumer cheaper than these smaller businesses pay for them at the wholesaler.
What needs to be done is a non-profit retailer that acts as a wholesaler and a retailer. This business buys directly from the manufacturers and then sells directly to the consumer. Imagine how cheaper things would be. This business would exist to keep prices more affordable for all. All the profits would go to pay employees a decent salary and give them free healthcare. Maybe then the poor could afford more items and those of us with more income could retire earlier. Am I a dreamer or what?
posted by DarthImmortal at 3:03 PM
2 Comments:
The Wal-Mart example is interesting and I think, unfortunately, an example of how even the business who are better to consumers are not better overall. I had a friend in college who worked full-time and Wal-Mart and the way they treat their employees is horrifying. Hardly any benefits, atrocious work schedules, all the typical things you'd expect of evil corporations.
Also, I'm not convinced that selling goods cheaper is necessarily the best solution. Americans have too much shit as it is, especially food. I'd be in favor of raising the price of crappy food astronomically high, and using the profits to subsidize environmentally-friendly and consumer-health-friendly production of healthy and organic foods. This would also reduce the enormous burden that obesity places on the health care system, not to mention on our people. I hate how in America, everything is the bigger, the better. More is better, huge is better, irresponsible is better.
Another interesting thing is the crazy laws that mess with alcohol distribution. One of my old college professors is a restaurant proprietor and it turns out -- in Colorado at least -- the wineries charge a premium to restaurants. That means the markup on the wine list isn't always as much as it looks like. You and I might be able to get a bottle of Frog's Leap cabernet for forty bucks, but the profit to the restaurant from its markup to ninety bucks is not nearly as substantial as it seems. Of course, when you get into that discussion you're getting into our country's ridiculous obsession with random vices while completely ignoring the unhealthy and destructive lifestyles of the vast majority of Americans. If government made any sense we would see a hell of a lot more regulation at the McDonald's and slaughterhouse levels.
Lol, can you tell I just finished Fast Food Nation?
Okay, last comment -- I "get" that this makes a certain degree of sense but it still pisses me off: bulk buying. It's blatant discrimination against single people. What the hell am I ever going to do with twenty containers of parmesan?? I know it sounds like I'm joking but it really pisses me off. Families already get so many damn subsidies and benefits -- tax breaks up the wazoo, reduced vacation prices, not to mention never being asked when they're going to get themselves together and start building a life -- it pisses me off that everything, EVERYTHING is more expensive if you don't have a regular sex life. Like that's not enough of a bummer in and of itself??
Hum. Yeah, sorry for barely addressing the substance of your post :0)
Sorry it took me so long to read this but I decided to take a couple of days off from the Internet.
You hit on one of the reasons the Europeans hate us so much; because we have too much shit. We shop with forklifts.
When you complained about married people getting discounts consider how screwed over you get with the Insurance. Married people get cheaper rates and they are even cheaper if you have kids. So if you are a single guy and you knock up somebody, you get cheaper rates than someone who used protection. So again we reward irresponsible behavior.
Damn, now I’m getting pissed off all over again!!! LOL
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