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and resells to the government for double the price because they're good at writing bids for government projects. We're a major supplier to government agencies,

and resells to the government for double the price because they're good at writing bids for government projects. We're a major supplier to government agencies, and I personally wrote our pricing engine. Obviously I see the inputs to the pricing, and I can assure you that this is very far from the truth. First, margins on products like this are very, very thin. Like, it's not unusual for the state to make more in sales tax from an order than we're taking in margin. Second, specifically relating to US public sector contracts, there's a federally-negotiated contract that any public sector entity can buy off of - look up "GSA contract"[1]. The way pricing is arrived at is defined here, and it would really stupid for some government entity to go off the ranch and buy something at a higher price than this would dictate. They may well negotiate their own contract that is better (we have tons and tons of customers who do this), but why would they pay more if the GSA contract dictates a lower price? [1] https://www.gsascheduler.com/gsa-contract/gsa-schedule-pricing/ https://www.gsascheduler.com/gsa-contract/gsa-schedule-prici...

vba616 4y ago
>Like, it's not unusual for the state to make more in sales tax from an order than we're taking in margin Is that supposed to be notable or surprising? I've assumed lots of retail businesses that sell to the general public at full price only make a fraction of the sales tax. Absolutely the first possibility I thought of is Best Buy, and the first Google response is net profit margin is 3.2%. Sales tax in my area is 8%. Even if that's a bogus number, it feels truthy? If the government does get a big discount, it would be interesting to explore where that comes from.
- CWuestefeld 4y ago
  >>Like, it's not unusual for the state to make more in sales tax from an order than we're taking in margin >Is that supposed to be notable or surprising? Well, specifically, I was responding to the absurd claim that someone "resells to the government for double the price". But more generally, yes, I think it's pretty surprising that the government should get a greater cut of the sale than we, the sellers, do. Is there some way that the state and local government is creating more value, or contributing more to the transaction, than we are?

vba616 4y ago

>Like, it's not unusual for the state to make more in sales tax from an order than we're taking in margin Is that supposed to be notable or surprising? I've assumed lots of retail businesses that sell to the general public at full price only make a fraction of the sales tax. Absolutely the first possibility I thought of is Best Buy, and the first Google response is net profit margin is 3.2%. Sales tax in my area is 8%. Even if that's a bogus number, it feels truthy? If the government does get a big discount, it would be interesting to explore where that comes from.

CWuestefeld 4y ago
>>Like, it's not unusual for the state to make more in sales tax from an order than we're taking in margin >Is that supposed to be notable or surprising? Well, specifically, I was responding to the absurd claim that someone "resells to the government for double the price". But more generally, yes, I think it's pretty surprising that the government should get a greater cut of the sale than we, the sellers, do. Is there some way that the state and local government is creating more value, or contributing more to the transaction, than we are?