We need to be reminded $$$
- Thread starter bobt
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Snowbrap101
Member
Yes, that last few years manufacturers/distributors have used every excuse to raise prices to collect record profits. Things are slowly changing some markets quicker then others.
Yeah, well, I'm not against anyone making good $$$. That being reasonable, and good profit, and not taking advantage of others. I'm all for that, however, some, many of these quarterly, annual, or whatever gross to net profit ratios are absolutely way over being anywhere close to reasonable! That in my book is called Absolute Intentional Gouging. Sadly just because they could, and they know that! So it is. Seems so that if you can't run with big dogs more so than ever now days, stay on the porch? As in us now being tied on the porch, not even able to get under it, eh!
Aint that the truth. The big dogs have never been so big.
dfattack
Well-known member
OK. I will probably get ridiculed here but with a "free market" and letting capitalism do it's thing wont this work itself out? My pricing philosophy is to charge as much as you can get away with before turning away customers and drive them to your competition. The intent is not to "gouge" customers but our margins are very low to begin with and there is a never ending demand for reinvestment into the business to stay relevant. The funds for the reinvestment come from the "profit" you see on many of the annual reports. I don't agree with gouging at all but also don't think that businesses should be criticized for making a profit when they can. After all customers can simply go somewhere else. The free market will create competition which usually tends to lower prices...since businesses are competing against each other.
Well said Darren, Like you said "I will probably get ridiculed here" too and I too will say I don't in any way support gouging but I also know I am in business to make money, and I wonder how many people understand what a "margin" is, and how do we come ti this number not only to stay in business but be profitable. I have a question for everyone.... Taking into consideration cost of business i.e. employees, insurances, taxes, brick and mortar etc.... and the number will vary from business to business based on size and volume but I would be curious to know what percent margin does someone think is reasonable for a business to make on a product or service? I agree there is some gouging out there but how much should someone be able to make based on a percentage. We get it here all the time..." oh i see you got another shipment of equipment...you must be doing good" or the people who think just because someone owns a business they are automatically rich and have it made under the shade. I don't like the cost of some goods and services out there but there is also outside forces we don't see that are also driving the costs up, DOES NOT always mean the business is making more money.
dfattack
Well-known member
and who are we to decide what is excessive profits or too much for a business to make? if you think you are being gouged then move on. I wanted to buy a truck during covid. The high volume dealers in the Chicago area were charging as much as $20k over sticker and I refused to deal with them. I found a dealer in Appleton who was not charging anything over MSRP. I waited 13 months for my truck and didn't pay a penny over MSRP. I had other options but I chose not to take them. I don't have any issue with dealers who were charging that if they want. That's their right to run their business how they choose. I don't agree with it and wouldn't run mine that way, but it's their right. BTW, customers were paying the extra charges. Don't misunderstand my comments to be pro gouging, I'm not. Just trying to illustrate that if a business does it they have the right to try it but we as customers have a right to not buy any of their products like I chose with the truck I bought.
Yeah pclark the Diesel is a big issue for me. December set a all time record high in production of Crude, and NG. Never in history had we pumped, produced that much volume. However, we are also setting records on the exporting of those products also. Drill baby drill, isn't working out this time no more than the last time.
dfattack
Well-known member
Maybe I misunderstood your post but are we drilling or are you encouraging us to drill baby drill?
pclark
Well-known member
All for capitalism but when people have to charge their groceries on a credit card and run up a balance that cannot be feasible to pay off it’s just bad for everyone including corporate profits. Those consumers will and have moved on but I’ll tell you, they always remember who screwed them as well. I don’t mind paying fair price but now we pay more for downsized packages. Those big companies will be whining when things get real bad and have their hands out to the government or shall I say the taxpayers for relief. Not asking for much, just fair prices and fair practices.
dfattack
Well-known member
Paul, I understand how you feel and agree with you wholeheartedly IF there is gouging going on. Maybe there is in some or many industries. I find myself somewhat defending some of the comments here solely because my business is facing inflationary pressures that is unbelievable in so many different areas. It's mind boggling. I also know many don't actually realize it themselves. For example, the general public watches most of the main stream media and believes what they hear about the high prices people are paying at the pump, grocery store and now I see an article about McD's. What you aren't seeing is the actual costs of doing business going up and holding those responsible for that inflation. Somehow those who are ultimately responsible escape any blame. In my industry literally every aspect of my costs are going up big time. So much so that last year I couldn't raise prices fast enough to keep up. The push for minimum wage is real and we are all seeing it real time now. $15 is no longer the target. Now it's $20. Also mandatory paid time off that recently kicked in. That additional cost alone is unreal. The average consumer has no clue about these cost pressures but only complain about what they are paying as a result of those pressures. Is the business supposed to absorb all the added costs the politicians vote in?
Not arguing anyone's points in any way but wanted to make sure those reading hear the other side of the story too. The inflationary pressures are not going away anytime soon if states like California, then New York and Illinois continue their agenda. It will spread to other states and it's already happening. My industry follows all the political movements by state and we know what's coming. I just wanted to point this out and make sure everyone is aware that in my opinion this is more based on government regulations and control than corporate greed.
Not arguing anyone's points in any way but wanted to make sure those reading hear the other side of the story too. The inflationary pressures are not going away anytime soon if states like California, then New York and Illinois continue their agenda. It will spread to other states and it's already happening. My industry follows all the political movements by state and we know what's coming. I just wanted to point this out and make sure everyone is aware that in my opinion this is more based on government regulations and control than corporate greed.
our kids are screwed
you start paying people $15-$20 to flip burgers and demand a living wage for a job that should be just for kids BECAUSE it doesnt pay enough, for the most part those people chose not to study, work hard, go for a better job and what do you expect to happen?
Raising the minimum wage raises the whole fricken bar, if a minimum wage job suddenly pays twice as much, does that mean the person that tried hard and did what they could to make a decent living at whatever, say 80k is going to suddenly make 160k?
No the prices for everything just go up and those making minimum wage still arent going to be able to afford shit and deserve it for the most part. I dont think its all the fault of buisness owners. I know I sound cold but there is no accountability for actions period and its getting worse every day in every facet of life I am sorry to say!
FJB
you start paying people $15-$20 to flip burgers and demand a living wage for a job that should be just for kids BECAUSE it doesnt pay enough, for the most part those people chose not to study, work hard, go for a better job and what do you expect to happen?
Raising the minimum wage raises the whole fricken bar, if a minimum wage job suddenly pays twice as much, does that mean the person that tried hard and did what they could to make a decent living at whatever, say 80k is going to suddenly make 160k?
No the prices for everything just go up and those making minimum wage still arent going to be able to afford shit and deserve it for the most part. I dont think its all the fault of buisness owners. I know I sound cold but there is no accountability for actions period and its getting worse every day in every facet of life I am sorry to say!
FJB
indy_500
Well-known member
100%
I don't disagree. Another thing that is still affecting industries are the tariffs that were put on, many of which are still there, and continue to cause havoc. As you say, continue inflation, as you can't raise prices fast enough. A vicious circle, as what goes around, comes around. It always works that way. Sadly so it is.
Yeah, well, the Industry is still drilling, but not quite as aggressive as they were. Active rig counts have decreased a bit as they wait to see what the market has in store for them $$ wise. This being as the efficiency in production wells has increased to the point they are relaxing somewhat. Setting all time records in Oil, and NG pumping production. And the big one is the export volumes. The exports is what drives our domestic prices to what we pay at the pump. Or, or as I deal with the jobber's price. So, to be honest it's absolutely out of our control. It's a World Demand Market, no matter who is in Washington.
pclark
Well-known member
Darren, being a business owner myself I understand what you are saying. If, as they say inflation has dropped into the 3% range then prices for groceries should have drop back as well. Wouldn’t that make sense? That is one area where the mfgs are taking profits I believe. I get it that prices have gone up for businesses, we have tried to hold prices on our materials as much as possible but labor prices in the contractor industry has just gone wild. It may be good for those companies but in the long run it will not end well for any of us. As a country we are on an out of control crazy train for most people. People that have wealth are not affected and some are so oblivious it’s shocking. It’s just to bad that this had to happen, four years ago I would never have believed we would be in this situation.
dfattack
Well-known member
Good conversation.
Couple of points. What jonesin said is so true. In our industry we call the process of increasing all wages and not just the minimum wage compression. For example, when MW goes to $15. The staff making $15 already and have been there for 6 months or a year doesn't like the fact the new guy is now making what he or she makes. So they go to $15.50 or $16.00. So before you know it the whole staff move up then the hourly shift managers are now making close to what the staff who they are managing are making so now they have to move up and so on and so on. The compression aspect is the real cost impact that happens and is felt immediately.
Paul, I'm no economist and definitely not an expert but in your example of the inflation dropping into the 3% range is not "dropping" but it's the rate of inflation increase that is less than before but still increasing. So, for example I'm not dropping my prices because the inflation is growing as fast as it was last year. My costs are still higher than two years ago. In fact, it's still 3% higher than last year (using your example). So why would anyone expect prices we pay to come back down? If my costs went down to where they were 5 years ago I would consider it but labor is the biggest cost factor for me and that is not going down ever. I just celebrated 30 years being in my business last Sunday and have been doing what I do for 38 years now and in all that time I don't recall ANY vendor sending out letters saying due to lower costs we are voluntarily lowering our costs to you. Not one time.
Couple of points. What jonesin said is so true. In our industry we call the process of increasing all wages and not just the minimum wage compression. For example, when MW goes to $15. The staff making $15 already and have been there for 6 months or a year doesn't like the fact the new guy is now making what he or she makes. So they go to $15.50 or $16.00. So before you know it the whole staff move up then the hourly shift managers are now making close to what the staff who they are managing are making so now they have to move up and so on and so on. The compression aspect is the real cost impact that happens and is felt immediately.
Paul, I'm no economist and definitely not an expert but in your example of the inflation dropping into the 3% range is not "dropping" but it's the rate of inflation increase that is less than before but still increasing. So, for example I'm not dropping my prices because the inflation is growing as fast as it was last year. My costs are still higher than two years ago. In fact, it's still 3% higher than last year (using your example). So why would anyone expect prices we pay to come back down? If my costs went down to where they were 5 years ago I would consider it but labor is the biggest cost factor for me and that is not going down ever. I just celebrated 30 years being in my business last Sunday and have been doing what I do for 38 years now and in all that time I don't recall ANY vendor sending out letters saying due to lower costs we are voluntarily lowering our costs to you. Not one time.
pclark
Well-known member
I should have noted as far as pricing being lowered I’m referring to commodities like food which does go up and down. I realize that other prices such as parts for cars, etc. may never go down once they have been raised.Good conversation.
Couple of points. What jonesin said is so true. In our industry we call the process of increasing all wages and not just the minimum wage compression. For example, when MW goes to $15. The staff making $15 already and have been there for 6 months or a year doesn't like the fact the new guy is now making what he or she makes. So they go to $15.50 or $16.00. So before you know it the whole staff move up then the hourly shift managers are now making close to what the staff who they are managing are making so now they have to move up and so on and so on. The compression aspect is the real cost impact that happens and is felt immediately.
Paul, I'm no economist and definitely not an expert but in your example of the inflation dropping into the 3% range is not "dropping" but it's the rate of inflation increase that is less than before but still increasing. So, for example I'm not dropping my prices because the inflation is growing as fast as it was last year. My costs are still higher than two years ago. In fact, it's still 3% higher than last year (using your example). So why would anyone expect prices we pay to come back down? If my costs went down to where they were 5 years ago I would consider it but labor is the biggest cost factor for me and that is not going down ever. I just celebrated 30 years being in my business last Sunday and have been doing what I do for 38 years now and in all that time I don't recall ANY vendor sending out letters saying due to lower costs we are voluntarily lowering our costs to you. Not one time.