Why the #$%^ don't people understand SUPPLY & DEMAND

[ai42]

<RANT ON>

Ok seriously I've seen a few newbs (according to their post count) over on the Hot Deal forums who TOTALLY DON'T understand Supply and Demand. I'm not a huge economist just a college student (notice I didn't say poor), not even a business major (Computer Science Major for those interested) but I understand supply and demand. Money is essential to life in the modern and civilized world and if you haven?t figured out money makes the world turn you are sadly mistaken. I?m not going to explain how the supply and demand lines go and the quantity supplied etc but for those of you in the dark seek help.

Secondly why don?t people in general even on the hot deal forums ironically do not understand how much you are getting screwed over everyday. Those expensive Nike shoes at the mall cost a little over $25 a pair to the store but how much do you pay? Usually over $50. And you know much Nike spends to make those shoes a bit over $10. So lets say you get a great sale at the shoe store and you get a pair of shoes for $40, at least half of that is paid to make someone else rich. If you spend the time to research how much everyday stuff costs the store to buy you will be amazed. Also remember life is a garage sale, you don?t always have to pay the sticker price. I once got a $500 suit for $120 just by talking to the manager.

Let me tell you guys a little secret that 90% of people don?t realize. Working for other people is for chumps. Why would I pay you 40k a year? You must be making me the entrepreneur at least 40k a year (often double and even triple). It is risky to start your own business and does require a lot of work, but you are well rewarded if you have good ideas and people are willing to pay for them. You don?t even always have to have innovative ideas look at Cendyne (CD-RW/DVD/DVD-RW ?Manufacturer?) it is widely know they do not manufacture their own drives, and purchase Lite-On, Acer, etc drives and package them in their packager bundle some software. Is that really so hard to do? And I?ll bet they make millions.

<END RANT>

 

[Mrfrog840]

 

[SViscusi]

Is there anything in particular that brought this on or are you just venting?

 

[ai42]

Is there anything in particular that brought this on or are you just venting?

Just some guy over at the Hot Deals Forum posting a $1750 1Ghz P3 laptop as a hot deal. OMG that is one guy that needs help.

 

[SViscusi]

Gotcha

 

[SWirth86]

Answer: Theyre idiots.


Youre not getting screwed just because someone else profits from the stuff you pay for. If a new pair of Nike's cost 65 bucks, but the material/labor only costs 10 bucks, I'm not getting screwed. I cant make shoes, and I know that they will be a quality pair that will last a while. Most shoes cost over 50 bucks anyway, so I cant get them from anywhere else.

Also, working for other people is not for chumps...... Sure, it can be much more profitable to form you own business, but it takes much more time, energy, experience, intelligence, etc. I would rather get a good job working for someone else makin 100K than doing my own business where I dont have any free time, while I'm making 200K.

Life isnt all about money, but being financially stable can make your life much more liveable.

 

[Miramonti]

Originally posted by: ai42

Is there anything in particular that brought this on or are you just venting?

Just some guy over at the Hot Deals Forum posting a $1750 1Ghz P3 laptop as a hot deal. OMG that is one guy that needs help.

You went through all that just to say someone was out of touch with the market?

 

[ai42]

Youre not getting screwed just because someone else profits from the stuff you pay for. If a new pair of Nike's cost 65 bucks, but the material/labor only costs 10 bucks, I'm not getting screwed. I cant make shoes, and I know that they will be a quality pair that will last a while. Most shoes cost over 50 bucks anyway, so I cant get them from anywhere else.

Very intelligent remark. Your right most people can't make their own stuff. However why do you pay so much? Goto a discount store (like Ross or Marshalls etc), or talk to the manager most arn't unresonable. Offer him $50 for those shoes instead of $65.

Also, working for other people is not for chumps...... Sure, it can be much more profitable to form you own business, but it takes much more time, energy, experience, intelligence, etc. I would rather get a good job working for someone else makin 100K than doing my own business where I dont have any free time, while I'm making 200K.

Thats a personal choice I cannot tell you what to do, for you that may be perfect. Also you're not nessecarily losing time, if you do well and make tons of money you can become a board chairman, hire a CEO and basically show up for two or three meetings a week. Of course that is a big IF. Or you can retire early and live it up traveling the world.

Life isnt all about money, but being financially stable can make your life much more liveable.

I never said that life was about money, but it is nessecary.

 

[SWirth86]

Originally posted by: ai42

Very intelligent remark. Your right most people can't make their own stuff. However why do you pay so much? Goto a discount store (like Ross or Marshalls etc), or talk to the manager most arn't unresonable. Offer him $50 for those shoes instead of $65.

Well, for me at least, the shoes I get aren't available at those. I get either Adidas or New Balance trail running shoes, so theyre good, but expensive. Sometimes I will see a pair of Adidas's at Kohls, but theyre still expensive there. In my experience, managers won't lower prices on retail items.

 

[alphatarget1]

Originally posted by: SWirth86
Answer: Theyre idiots.


Youre not getting screwed just because someone else profits from the stuff you pay for. If a new pair of Nike's cost 65 bucks, but the material/labor only costs 10 bucks, I'm not getting screwed. I cant make shoes, and I know that they will be a quality pair that will last a while. Most shoes cost over 50 bucks anyway, so I cant get them from anywhere else.

Also, working for other people is not for chumps...... Sure, it can be much more profitable to form you own business, but it takes much more time, energy, experience, intelligence, etc. I would rather get a good job working for someone else makin 100K than doing my own business where I dont have any free time, while I'm making 200K.

that is not supply and demand.

to answer the original question, they haven't taken economics in high school or failed it.

 

[OneSyberTroop]

"Very intelligent remark. Your right most people can't make their own stuff. However why do you pay so much? Goto a discount store (like Ross or Marshalls etc), or talk to the manager most arn't unresonable. Offer him $50 for those shoes instead of $65."

Rofl what world do you live in? And what the hell kind of stores do you shop in? Most of us dont live in smallville where each shop is a family business and you can trade a sheep for a few bails of hay. Go into any NORMAL store and ask the manager for a discount - then watch him laugh at you. Have you ever worked in retail? I have. As a matter of fact, most of the time the managers have little to no bearing on prices. Sure they can manually change the price, but that requires a key, a code, or something they dont wanna waste their time on. So, I challenge you - go into walmart, grab a pair of $7 shoes and ask the manager for a lower price. I mean you know someone is getting rich off of those shoes. I mean, jesus, probably $2 in materials, $4 store cost, yup, someones kickin back in a leather chair burnin $20's.

 

[Miramonti]

And which multi-milliondollar business do you own ai42?

 

[CKDragon]

Offer him $50 for those shoes instead of $65

I haven't shopped at a farmer's market for years...

CK

 

[SWirth86]

Originally posted by: kenleung


that is not supply and demand.

So?..........his post didnt say anything about Supply and Demand either

 

[jonnyGURU]

I've learned people are funny. They do funny things.

People are irrational, ignorant, stubborn... you name it.

I used to get frustrated at these people, but then I started watching Cops religeously.

I have come to realize that the people that are driving wood paneled station wagons through trailers, etc. on this show are probably very much like the customers I have to deal with on a day to day basis.

Suddenly.... everything just seems "ok".

 

[SWirth86]

Originally posted by: jonnyGURU
I've learned people are funny. They do funny things.

People are irrational, ignorant, stubborn... you name it.

I used to get frustrated at these people, but then I started watching Cops religeously.

I have come to realize that the people that are driving wood paneled station wagons through trailers, etc. on this show are probably very much like the customers I have to deal with on a day to day basis.

Suddenly.... everything just seems "ok".

Haha That was good

 

[ai42]

Rofl what world do you live in? And what the hell kind of stores do you shop in? Most of us dont live in smallville where each shop is a family business and you can trade a sheep for a few bails of hay. Go into any NORMAL store and ask the manager for a discount - then watch him laugh at you. Have you ever worked in retail? I have. As a matter of fact, most of the time the managers have little to no bearing on prices. Sure they can manually change the price, but that requires a key, a code, or something they dont wanna waste their time on. So, I challenge you - go into walmart, grab a pair of $7 shoes and ask the manager for a lower price. I mean you know someone is getting rich off of those shoes. I mean, jesus, probably $2 in materials, $4 store cost, yup, someones kickin back in a leather chair burnin $20's.

First of all I live in Dallas, TX. You are quite right some managers are unwilling to budge or are not in the know. But that $120 suit I got from JC Pennys for example. Also you have to gain their respect. Go into the store a few times pay the full price a few times, be nice make sure you say hello to the manager every time you go in. Then tell them you have been a regular customer and will continue to be a regular customer in the future. Tell them you have friends or sources and know how much he pays for that product, and offer him a fair markup say 20-30% instead of their normal 50-100%. It takes some time to figure it out, but if the money is worth your time then great.

I have a friend who is better at this than I am (he's a business major) he gets gas for 5 cents off (per gallon) the advertised price that he worked with at a specific gas station. He also worked out a deal with a manager as a specific Wendys and he gets stuff there at 75% price.

BTW never worked retail but did work at a Quizno's worked my way up to manager, I would give some regular customers 20% off, in about almost 2 years working there only 2 people asked me for a discount, both used my technique I mentioned and I gave them discounts too.

d which multi-milliondollar business do you own ai42?

Hehe one day perhaps... But as it says I'm a college student but I do make about 2-3k a month working 3-4 hrs a day on my business.

 

[ElFenix]

whats really weird is that people don't understand that you can't seriously expect to get 100 printers at $200 below MSRP (thats 40% off) from the home section of dell without raising some flags and probably getting their order cancelled. "i'm not going to resell them" yeah right. ferengi piss me off. ruin deals for the rest of us.

 

[OneSyberTroop]

"BTW never worked retail but did work at a Quizno's worked my way up to manager, I would give some regular customers 20% off, in about almost 2 years working there only 2 people asked me for a discount, both used my technique I mentioned and I gave them discounts too."

Uhh yeah. This is food services, son. There were no scu #'s to worry about. Somehow I am extremely hesitant to believe that you were able to talk this manager down to $125 from $500. Suits have Sku's. Im sure they take inventory on sku's. Im sure they would wonder where the $375 of overhead went from that suit......

 

[ai42]

whats really weird is that people don't understand that you can't seriously expect to get 100 printers at $200 below MSRP (thats 40% off) from the home section of dell without raising some flags and probably getting their order cancelled. "i'm not going to resell them" yeah right. ferengi piss me off. ruin deals for the rest of us.

Wouldn't matter because that is Supply and Demand. The lower the price the higher the quantity demanded. Even if everyone was to order just a single item it would raise flags seeing 600+ orders for the same product. If it is posted to the forum and it is an obvious price mistake it's not going to be honored. Rarely do retaliers honor price mistakes.

 

[ai42]

Uhh yeah. This is food services, son. There were no scu #'s to worry about. Somehow I am extremely hesitant to believe that you were able to talk this manager down to $125 from $500. Suits have Sku's. Im sure they take inventory on sku's. Im sure they would wonder where the $375 of overhead went from that suit......

First of all I had purchased perhaps 2 or 3 suits (at full price) in a 6 month timespan went to the store another 10 times in there made sure I spoke to the manager for whatever reason. Went in knowing the suit I wanted he puchases at $80 each, I said basically that you've seen me here you know I'm a good customer I intend to continue purchasing suits here, and if give me this for 150% of your cost I will continue to purchase here and tell my friends too. Even one Staples manager I'm good with will "Clearance" items early for me (usually after seeing posts here, and my store dosn't have it on Clearance).

My friend who is better at this gets calls from managers of various stores almost daily telling him basically "hey I got a few shoes I need to get rid of you want to come in and take a pair or two off my hands for 40% off"

Names are also a good thing personalize relationships get on a first name basis with these managers. You're not friends but they will give you more attention if you can talk to them by name. Always remember when you're talking you are giving them money, you have what they want.

 

[shazbot]

lol. . . why the #$%^ don't people understand economics? If you took a class involving supply & demand, then i'm SURE you also learned about overhead, variable & fixed costs. So, in addition to raw materials cost, theres marketting cost, shipping cost, inventory cost, capital expenditures, R&D cost (although I have to say, R&D in shoes seems kinda pointless =\) and numerous other assorted costs. Granted, this might not justify a 1000% markup, but shoes that cost 20 bucks to make in direct costs can be justified for selling around 50-60 bucks. You buy a new pair of basketball shoes once every year, therefore nike only makes a profit off of you ONCE that entire year, thats why they have to charge such a high markup. If they charged a tiny markup, then their revenue for the entire year is in the toilet. All durable goods have a high markup for the simple fact that people don't buy 'em frequently. Gas, bread, milk, etc. all have a tiny markup because ppl buy them frequently over a year, so they make money continously. So yea. . . next time you spout economics, take a class 1st.

 

[ElFenix]

Originally posted by: ai42

whats really weird is that people don't understand that you can't seriously expect to get 100 printers at $200 below MSRP (thats 40% off) from the home section of dell without raising some flags and probably getting their order cancelled. "i'm not going to resell them" yeah right. ferengi piss me off. ruin deals for the rest of us.

Wouldn't matter because that is Supply and Demand. The lower the price the higher the quantity demanded. Even if everyone was to order just a single item it would raise flags seeing 600+ orders for the same product. If it is posted to the forum and it is an obvious price mistake it's not going to be honored. Rarely do retaliers honor price mistakes.

nah, they'll honor most of them... just not the real obvious resellers. though sometimes it seems to take a while.

 

[ai42]

lol. . . why the #$%^ don't people understand economics? If you took a class involving supply & demand, then i'm SURE you also learned about overhead, variable & fixed costs. So, in addition to raw materials cost, theres marketting cost, shipping cost, inventory cost, capital expenditures, R&D cost (although I have to say, R&D in shoes seems kinda pointless =\) and numerous other assorted costs. Granted, this might not justify a 1000% markup, but shoes that cost 20 bucks to make in direct costs can be justified for selling around 50-60 bucks. You buy a new pair of basketball shoes once every year, therefore nike only makes a profit off of you ONCE that entire year, thats why they have to charge such a high markup. If they charged a tiny markup, then their revenue for the entire year is in the toilet. All durable goods have a high markup for the simple fact that people don't buy 'em frequently. Gas, bread, milk, etc. all have a tiny markup because ppl buy them frequently over a year, so they make money continously. So yea. . . next time you spout economics, take a class 1st.

Yes your right, and I have taken a few economics classes. I was just making an example, for some items a 150% markup would be out of the question, but dosen't mean you can't try to bring down the sticker price. Honestly I haven't gotten any managers to give me a good price on shoes (I usually goto discount stores), but there are all kinds of stuff I have.

 

[HonkeyDonk]

Originally posted by: shazbot
lol. . . why the #$%^ don't people understand economics? If you took a class involving supply & demand, then i'm SURE you also learned about overhead, variable & fixed costs. So, in addition to raw materials cost, theres marketting cost, shipping cost, inventory cost, capital expenditures, R&D cost (although I have to say, R&D in shoes seems kinda pointless =\) and numerous other assorted costs. Granted, this might not justify a 1000% markup, but shoes that cost 20 bucks to make in direct costs can be justified for selling around 50-60 bucks. You buy a new pair of basketball shoes once every year, therefore nike only makes a profit off of you ONCE that entire year, thats why they have to charge such a high markup. If they charged a tiny markup, then their revenue for the entire year is in the toilet. All durable goods have a high markup for the simple fact that people don't buy 'em frequently. Gas, bread, milk, etc. all have a tiny markup because ppl buy them frequently over a year, so they make money continously. So yea. . . next time you spout economics, take a class 1st.

First of all, great name shazbot, i love that word, shazbot...haha

Secondly, Ai42, quit whining and acting all pompous and smarter than other people. If someone wants to waste $1800 on a crappy laptop, LET THEM!