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Urgg my head hurts… Okay so if you do business like this you need to make sure that your leave enough profit in so that you can have resellers. That way you protect your margins and that of your reseller/competition. It is all great for in your head for customers but people are already comfortable buying around the price point set forth so even if you come down buy a little you are still making profits, if you want to make more you can then give better incentives to resellers.
Also mentioned before was if something is cheap there is a reason so human don’t perceive an item as valuable if they don’t spend a lot.
Also if you have ever worked for a company that does do exports and you understand the entire supply chain you will then also better understand what I mean. As I have seen what happens to companies that don’t protect their minimum cost per unit when selling to resellers or protecting material acquisitions via proper procurement. Protecting item value is also a great trait to have so selling for so low when you didn’t want to make people unemployed is weird to me as there is a big disconnect between the two ideas in the story.
Woah..cool explanation.
He’s wrong or lying. The reason they protect item margins is to protect their own profits. Shoe companies, for example, often use slave labor. Similarly, in electronics, some of the overseas factories also use slave or child labor. Those that don’t are usually extraordinarily abusive to ensure they can keep their employees in line despite the terrible working conditions. They have connections with the government to kill or silence anyone who’s disgruntled. Yes, you heard me right: they will literally kill a union manager to disband the union. Is that the kind of “employment” you think of when you imagine someone making your shoes or your tablet? No? I didn’t think so. But that’s the truth, look it up.
A good example of a company who does this is Foxconn. One of their factories was shut down when they didn’t pay their employees. Do you think they paid the employees to end the strike? Lol no. They had the Indian government crack down on freedom of speech and force the striking workers to go back to work. So, the employees burned down the factory. Foxconn responded by having the government arrest the organizers for arson, a few of whom “disappeared,” and then they continued treating their employees like total trash. Foxconn has some of the highest suicide rates in the electronics industry, and they make Apple devices. Yup, premium electronics, where prices are high. They can pay better, they just don’t.
Hell, if you think that’s bad, there’s kids sniffing burnt plastic in Indonesia so the west can “recycle” cheaply. Modern business practices are so f*cking disgusting, it’s terrible.
As for resellers, they’re solely used to quash competition. Once a company becomes dominant like Nvidia or Walmart, they squeeze the resellers’ profits until they literally go bankrupt, putting everyone out of work. Why? Because it makes more money. Yup. Resellers are ONLY tools used to put competition out of business, then they also get put out of business.
After taking over a good chunk of the market, these companies establish their own subsidiary brands and consolidate. Take for example Unilever: this company has many, many brand names, but they’re all owned by just Unilever. Some of Unilever’s brands compete with each other, making you think you have many options at your local grocery store. But you don’t.
Dove, Axe, Suave, Clear, Dawn. These are all soap brands owned by Unilever. But that’s just five— they own over ONE HUNDRED. Yes, one hundred soap brands. That whole store aisle might be only Unilever products. Did you look at the labels?
S.C. Johnson is another company who does this. Their “Scrubbing Bubbles” brand sells what’s basically watered-down 409. The only difference is the price, the packaging, and the smell. It’s far worse at actually cleaning because it has less of 409’s active ingredient, and the pointless foaming agent causes it to leave behind a nasty residue. (You can tell I’m pissed at them, yeah?)
But it’s not just soap. Virtually every product category is like this nowadays. Priceline, for example, owns over thirty different “competing” hotel and airline booking services. Competition? What competition? It’s all the same company.
TicketMaster does the same for venue booking at events like concerts and sports games; they’re so rich with their scummy business practices that in some cases they’ve straight-up bought the venues they used to sell tickets for. Can’t get a ticket at the local stadium for less than $500? Thank TicketMaster for driving up prices by over 1000% in less than 30 years.
Now you know why prices never go down even as the company’s costs plummet to zero. It’s all a scam, a shell game, made to trick us consumers into believing we have options. We don’t.
MetroGecko is probably some mid-level manager who doesn’t know how modern business actually works, they only know what they’ve been told.