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The machinery require maintenance and software contracts from the suppliers. The raw inputs require delivery contracts from the suppliers and is currently also

The machinery require maintenance and software contracts from the suppliers. The raw inputs require delivery contracts from the suppliers and is currently also in short supply. He can’t get his same preferential pricing outside of his supply contracts, or his suppliers may not even be able to deliver it, or they’d require he increase his contract buy. He may not believe in hiring hourly manufacturing employees on contract without benefits. The amount of time he spends training them and watching them cycle in and out has a cost. Sure, it could be done. Is it worth it? Obviously not, or he’d be doing it.

gruez 7y ago
>Sure, it could be done. Is it worth it? Obviously not, or he’d be doing it. All of the factors you listed can be conceivably factored into the price and/or be part of a purchase commitment. The fact it hasn't either means: a) the increased price isn't something the market is willing to bear. I'm skeptical about this because the presence of scalpers on the market makes me think that there are at least some consumers willing to pay insanely high costs for masks. I will also go on a limb and say most people would probably be willing to pay 2-3x "normal" price for N95 masks (a quick search on archive.org says they normally retail for $1/ea when purchased in modest quantities). b) the owner is behaving irrationally from a profit maximizing perspective, perhaps because he got burned last time or thinks any profit isn't worth the hassle.
- backslash_16 7y ago
  It's too easy as a catch-all to say "everything can always be priced in". Right now 48 states (I can't find anything saying all 50) are in a state of emergency, which prohibit raising prices more than around 10% or 20%. I'm bringing up these points because over the last month I have come to also think either state or federal government needs to take responsibility and buy these makes from a local producer - even when there is no pandemic. I don't think our connected web of hospitals, suppliers, and insurance companies have the right incentives to use local, "expensive" suppliers when there are lower cost non-local suppliers and these non-local suppliers have stocks. [1] Price gouging percentages - https://www.natlawreview.com/article/coronavirus-emergency-declarations-trigger-anti-pricing-gouging-laws https://www.natlawreview.com/article/coronavirus-emergency-d... [2] State of emergency - https://www.businessinsider.com/california-washington-state-of-emergency-coronavirus-what-it-means-2020-3 https://www.businessinsider.com/california-washington-state-...

gruez 7y ago

>Sure, it could be done. Is it worth it? Obviously not, or he’d be doing it. All of the factors you listed can be conceivably factored into the price and/or be part of a purchase commitment. The fact it hasn't either means: a) the increased price isn't something the market is willing to bear. I'm skeptical about this because the presence of scalpers on the market makes me think that there are at least some consumers willing to pay insanely high costs for masks. I will also go on a limb and say most people would probably be willing to pay 2-3x "normal" price for N95 masks (a quick search on archive.org says they normally retail for $1/ea when purchased in modest quantities). b) the owner is behaving irrationally from a profit maximizing perspective, perhaps because he got burned last time or thinks any profit isn't worth the hassle.

backslash_16 7y ago
It's too easy as a catch-all to say "everything can always be priced in". Right now 48 states (I can't find anything saying all 50) are in a state of emergency, which prohibit raising prices more than around 10% or 20%. I'm bringing up these points because over the last month I have come to also think either state or federal government needs to take responsibility and buy these makes from a local producer - even when there is no pandemic. I don't think our connected web of hospitals, suppliers, and insurance companies have the right incentives to use local, "expensive" suppliers when there are lower cost non-local suppliers and these non-local suppliers have stocks. [1] Price gouging percentages - https://www.natlawreview.com/article/coronavirus-emergency-declarations-trigger-anti-pricing-gouging-laws https://www.natlawreview.com/article/coronavirus-emergency-d... [2] State of emergency - https://www.businessinsider.com/california-washington-state-of-emergency-coronavirus-what-it-means-2020-3 https://www.businessinsider.com/california-washington-state-...