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Compare it to farmers who get less for their produced goods, while in the shops prices go up. What part of the ticket price of a litre/gallon of milk ends up wi

Compare it to farmers who get less for their produced goods, while in the shops prices go up. What part of the ticket price of a litre/gallon of milk ends up with the farmer? I never understood this.

lotsofpulp 4y ago
Based on the profit margins of the largest publicly listed retailers, the shops are not ending up with it either.
- jandrese 4y ago
  So where is all of the money going? Insurance premiums?
  - lotsofpulp 4y ago
    I suspect the bottom paid tier of society such as seasonal workers on the farms picking fruits and vegetables, workers in meat processing facilities, drivers, and lots of others in the bottom 20% to 40% of society are getting higher pay. Not that it means their lives are now sunshine and roses, but a lot of our "cheap" goods were based on a lot of people being paid relatively very little.
- nuancebydefault 4y ago
  Profit = turnover - expenses. Manager bonuses, business travel expenses and taxes are part of those expenses.
  - lotsofpulp 4y ago
    Profit = revenue minus expenses. I do not know what your point is, but business owners do not pay employees, even managers, more than they have to.
    - nuancebydefault 4y ago
      Just trying to track where all the money between producer and consumer tends to leak towards. My point was a bit, that low profit does not mean that there are no unnecessary expenses. Are business owners usually not managers? Also often profit is used to invest in the company itself so it not really lost imo.
      - lotsofpulp 4y ago
        Generally, a low profit margin amongst the entire industry indicates that business operations are going about as efficiently as possible given current technology and knowledge. Grocery stores have long had ~2% or even less profit margins. The people working at Costco, Walmart, Kroger, Albertsons, Target, Aldi, Lidl, Tesco, Amazon, etc. are pretty good at what they do, and those managers are not known for getting lavish pay. After all, how could they, since their competition would steal their customers in their extremely price sensitive business.

Compare it to farmers who get less for their produced goods, while in the shops prices go up. What part of the ticket price of a litre/gallon of milk ends up with the farmer? I never understood this.

lotsofpulp 4y ago

Based on the profit margins of the largest publicly listed retailers, the shops are not ending up with it either.

jandrese 4y ago
So where is all of the money going? Insurance premiums?
- lotsofpulp 4y ago
  I suspect the bottom paid tier of society such as seasonal workers on the farms picking fruits and vegetables, workers in meat processing facilities, drivers, and lots of others in the bottom 20% to 40% of society are getting higher pay. Not that it means their lives are now sunshine and roses, but a lot of our "cheap" goods were based on a lot of people being paid relatively very little.
nuancebydefault 4y ago
Profit = turnover - expenses. Manager bonuses, business travel expenses and taxes are part of those expenses.
- lotsofpulp 4y ago
  Profit = revenue minus expenses. I do not know what your point is, but business owners do not pay employees, even managers, more than they have to.
  - nuancebydefault 4y ago
    Just trying to track where all the money between producer and consumer tends to leak towards. My point was a bit, that low profit does not mean that there are no unnecessary expenses. Are business owners usually not managers? Also often profit is used to invest in the company itself so it not really lost imo.
    - lotsofpulp 4y ago
      Generally, a low profit margin amongst the entire industry indicates that business operations are going about as efficiently as possible given current technology and knowledge. Grocery stores have long had ~2% or even less profit margins. The people working at Costco, Walmart, Kroger, Albertsons, Target, Aldi, Lidl, Tesco, Amazon, etc. are pretty good at what they do, and those managers are not known for getting lavish pay. After all, how could they, since their competition would steal their customers in their extremely price sensitive business.