4 ms·

If we consider the 'profit margin' to include all the white collar make-work jobs that aren't performing the actual work, then pretty damn high. Last time I was

If we consider the 'profit margin' to include all the white collar make-work jobs that aren't performing the actual work, then pretty damn high. Last time I was at a stealership there was a whole line of people just sitting at desks pretending to be shop techs but actually just doing customer management. Never mind the entire behind-the-scenes management structure. Or you call a plumber for a simple repair and there goes one kilodollar, while the guy doing the work gets a few hundred of it. The rest is all going to the overhead of phone answerer, scheduler, manager, business entity owner, franchiser, etc. I suspect the majority of "cost disease" is going to such intermediaries, and the thing about intermediaries is they know their main job is maintaining their position.

JumpCrisscross 3y ago
> suspect the majority of "cost disease" is going to such intermediaries The trades are relatively efficient at forming new entrants. Most of the plumbers, painters, carpenters, et cetera I've worked with ran their own businesses. That didn't make them cheaper.
- mindslight 3y ago
  My second example there was Roto Rooter [0], so along with the stealership [1] these aren't examples of vibrant competition allowing for new entrants. But the fact they can have this outsized overhead and yet still have customers demonstrates something, even if not universal about the entire market. I think this somewhat ties into business discovery getting harder. There was a period where the Internet was making this better, but has now been seemingly completely locked down by web spammers and the surveillance-adtech industry making it into a pay to play game (aka more overhead). I'm halfheartedly in the market for contractors myself, and it seems like the best way to find leads is to sit down for lunch at a restaurant next to a main road, and write down the phone numbers on the trucks going by. At least that only requires people to spring for the fancy truck wrap, rather than the fancy website and surveillance-based advertising. [0] My aunt's drain was slow and I was too swamped to look at it, so that's who her helper ended up calling (sigh). If I had known the bill was going to come to $1200 for installing 12 feet of PVC pipe, I would have made the time. [1] Warranty recall.
  - JumpCrisscross 3y ago
    > halfheartedly in the market for contractors myself The good news is, in most towns, you only need to do this once. From there you can rely on referrals.
  - notyofriend 3y ago
    1200 is cheap. Your paying 300$ for the pipe and 900 for the 3x2x12 trench they had to dig
    - mindslight 3y ago
      It was in free space in the basement, next to a wall. Something like a slip joint (the under sink plumbing wasn't touched), a few feet of vertical pipe, a PVC trap with a few elbows, six to eight feet of lateral pipe, a 45 plus a few more feet of pipe, and a threaded adapter into the cast iron stack. It was close enough to the stack (or "grandfathered") that there wasn't even a vent involved. Care to revise your judgement?
      - notyofriend 3y ago
        Yes that seems expensive
    - s1artibartfast 3y ago
      Where are you getting your numbers from? I trenched a 60' PVC run last weekend and 2" sch40 was $1.60/ft. A 12' pipe trench a couple hours work tops, if done manually.
s1artibartfast 3y ago
I think I largely agree that there is a lot of theoretically unproductive overhead in larger businesses, but that doesnt mean it can be removed. If you start a shop, you will quickly find that many customers want mints on their pillows and telephone sanitizers - Even if as an owner, you would prefer to fire the lot of them and take an buy a new vacation home.

JumpCrisscross 3y ago

> suspect the majority of "cost disease" is going to such intermediaries The trades are relatively efficient at forming new entrants. Most of the plumbers, painters, carpenters, et cetera I've worked with ran their own businesses. That didn't make them cheaper.

mindslight 3y ago
My second example there was Roto Rooter [0], so along with the stealership [1] these aren't examples of vibrant competition allowing for new entrants. But the fact they can have this outsized overhead and yet still have customers demonstrates something, even if not universal about the entire market. I think this somewhat ties into business discovery getting harder. There was a period where the Internet was making this better, but has now been seemingly completely locked down by web spammers and the surveillance-adtech industry making it into a pay to play game (aka more overhead). I'm halfheartedly in the market for contractors myself, and it seems like the best way to find leads is to sit down for lunch at a restaurant next to a main road, and write down the phone numbers on the trucks going by. At least that only requires people to spring for the fancy truck wrap, rather than the fancy website and surveillance-based advertising. [0] My aunt's drain was slow and I was too swamped to look at it, so that's who her helper ended up calling (sigh). If I had known the bill was going to come to $1200 for installing 12 feet of PVC pipe, I would have made the time. [1] Warranty recall.
- JumpCrisscross 3y ago
  > halfheartedly in the market for contractors myself The good news is, in most towns, you only need to do this once. From there you can rely on referrals.
- notyofriend 3y ago
  1200 is cheap. Your paying 300$ for the pipe and 900 for the 3x2x12 trench they had to dig
  - mindslight 3y ago
    It was in free space in the basement, next to a wall. Something like a slip joint (the under sink plumbing wasn't touched), a few feet of vertical pipe, a PVC trap with a few elbows, six to eight feet of lateral pipe, a 45 plus a few more feet of pipe, and a threaded adapter into the cast iron stack. It was close enough to the stack (or "grandfathered") that there wasn't even a vent involved. Care to revise your judgement?
    - notyofriend 3y ago
      Yes that seems expensive
  - s1artibartfast 3y ago
    Where are you getting your numbers from? I trenched a 60' PVC run last weekend and 2" sch40 was $1.60/ft. A 12' pipe trench a couple hours work tops, if done manually.

s1artibartfast 3y ago

I think I largely agree that there is a lot of theoretically unproductive overhead in larger businesses, but that doesnt mean it can be removed. If you start a shop, you will quickly find that many customers want mints on their pillows and telephone sanitizers - Even if as an owner, you would prefer to fire the lot of them and take an buy a new vacation home.