3 ms·

If that were the case, then why the consumer side shortages?...which are at least partly (although nowhere near the degree to which the fed and government would

If that were the case, then why the consumer side shortages?...which are at least partly (although nowhere near the degree to which the fed and government would like us to believe) responsible for the price increases.

hef19898 5y ago
That's one of the most under appreciated things about supply chains in general and inventory in particular. The fact that more inventory regularly does increase shortages. Among the worst offenders, within the industry, to not get that is production closely followed by (B2B) sales in my experience.
- marto1 5y ago
  Charge more to store stuff that doesn't sell fast enough until equilibrium is reached ? I'm by no means expert in logistics, but that's the first idea that popped into my mind.
  - hef19898 5y ago
    And that's what Amazon is doing. From experience, Amazon's owb inventory levwls and placement are well managed. FBA, well there Amazon depends on FBA sellers. And when Amazon is running out of warehouse space for themselves FBA inventory has to go. Long term and slow mover fees make sense. I don't think these surcharges are enough to solve the issue, not for Amazon and FBA let alone for everyone else. Not that Amazon has much of a choice so.
mindslight 5y ago
Half the stuff is overstocked, half the stuff is out of stock because there is nowhere to stock it. This jumbled state actually seems more likely after a disruption, than purely empty shelves. For example, how many people's dwellings are currently loaded with a larger than usual amount of toilet paper and canned goods that they're working through? Businesses are going to have made similar misjudgements of what are critical staples and what is fluff that won't sell. I'm solidly in the Austrian camp and had to buy a bunch of plywood this summer. But this price inflation narrative seems like half political meme, half telegraphing of corporate plans (like many anti-WFH articles). It's a motte and bailey - yes inflation is "high". But 10% price inflation would still only make a $30 sheet of plywood cost $33 over a year, not $80 over a few months. Unless we're experiencing hyperinflation, specific >30% price hikes are best described by the actual problem (supply chain) rather than playing up people's fears that such rises will happen across the board.

hef19898 5y ago

That's one of the most under appreciated things about supply chains in general and inventory in particular. The fact that more inventory regularly does increase shortages. Among the worst offenders, within the industry, to not get that is production closely followed by (B2B) sales in my experience.

marto1 5y ago
Charge more to store stuff that doesn't sell fast enough until equilibrium is reached ? I'm by no means expert in logistics, but that's the first idea that popped into my mind.
- hef19898 5y ago
  And that's what Amazon is doing. From experience, Amazon's owb inventory levwls and placement are well managed. FBA, well there Amazon depends on FBA sellers. And when Amazon is running out of warehouse space for themselves FBA inventory has to go. Long term and slow mover fees make sense. I don't think these surcharges are enough to solve the issue, not for Amazon and FBA let alone for everyone else. Not that Amazon has much of a choice so.

mindslight 5y ago

Half the stuff is overstocked, half the stuff is out of stock because there is nowhere to stock it. This jumbled state actually seems more likely after a disruption, than purely empty shelves. For example, how many people's dwellings are currently loaded with a larger than usual amount of toilet paper and canned goods that they're working through? Businesses are going to have made similar misjudgements of what are critical staples and what is fluff that won't sell. I'm solidly in the Austrian camp and had to buy a bunch of plywood this summer. But this price inflation narrative seems like half political meme, half telegraphing of corporate plans (like many anti-WFH articles). It's a motte and bailey - yes inflation is "high". But 10% price inflation would still only make a $30 sheet of plywood cost $33 over a year, not $80 over a few months. Unless we're experiencing hyperinflation, specific >30% price hikes are best described by the actual problem (supply chain) rather than playing up people's fears that such rises will happen across the board.