A new Wallyworld thread...
From the last thread, this thought entered my head. People are complaining because Wally is forcing suppliers to meet it's price point. Either meet their price point or sell elsewhere. Usually in business, you name your price, after figuring out the cost of raw materials, labor, utilities, buildings, etc, and the profit level. Wally is threatening that, forcing businesses to compete harshly, basically naming the price their willing to pay for a product. Businesses to compete are sending the work overseas where labor is cheaper.
This is sorta like what farmers and ranchers (and other suppliers of raw materials) have always been confronted with...buying their equipment and raw materials at retail. Then producing a commodity and selling at wholesale prices. Sounds backasswards from normal business practices doesn't it...Buy low, sell high. Commodity producers buy high, and sell low(buy retail, sell wholesale). When commodity prices are up, a profit is made, when not, there is a loss.
Uncle raises hogs for market. Ex. feed cost alone is 35$/100. If he sells hogs at 40$, he makes 5$/100, or about 20 cents an hour for his labor. 30$/100 and he loses money. Not losing just minor wages, but money out of his pocket. How long would a regular business stay solvent doing this? Most would shut down, and indeed, he's scaled back his hog operations to hobby status. When oil prices were below 10$/barrel, lots of independents went out of business, capping wells, because it cost them 15$/barrel to produce.
So, it's somewhat of a poetic justice, to see other industries and businesses being forced (coerced?) to follow the same system that farmers/ranchers/other commodity producers have labored under since time immemorial.
From the last thread, this thought entered my head. People are complaining because Wally is forcing suppliers to meet it's price point. Either meet their price point or sell elsewhere. Usually in business, you name your price, after figuring out the cost of raw materials, labor, utilities, buildings, etc, and the profit level. Wally is threatening that, forcing businesses to compete harshly, basically naming the price their willing to pay for a product. Businesses to compete are sending the work overseas where labor is cheaper.
This is sorta like what farmers and ranchers (and other suppliers of raw materials) have always been confronted with...buying their equipment and raw materials at retail. Then producing a commodity and selling at wholesale prices. Sounds backasswards from normal business practices doesn't it...Buy low, sell high. Commodity producers buy high, and sell low(buy retail, sell wholesale). When commodity prices are up, a profit is made, when not, there is a loss.
Uncle raises hogs for market. Ex. feed cost alone is 35$/100. If he sells hogs at 40$, he makes 5$/100, or about 20 cents an hour for his labor. 30$/100 and he loses money. Not losing just minor wages, but money out of his pocket. How long would a regular business stay solvent doing this? Most would shut down, and indeed, he's scaled back his hog operations to hobby status. When oil prices were below 10$/barrel, lots of independents went out of business, capping wells, because it cost them 15$/barrel to produce.
So, it's somewhat of a poetic justice, to see other industries and businesses being forced (coerced?) to follow the same system that farmers/ranchers/other commodity producers have labored under since time immemorial.