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> By the time I arrived at Brooklyn’s Park Slope farmers’ market in search of a pawpaw one morning last week, it was already too late: The weird green fruit had
by OJFord 3y ago
> By the time I arrived at Brooklyn’s Park Slope farmers’ market in search of a pawpaw one morning last week, it was already too late: The weird green fruit had sold out within an hour. “You have to get here early,” Jeff Rowe of Orchard Hill Organics, the market’s lone pawpaw vendor, told me.
> [...] Rowe, the farmers' market vendor, said he's constantly selling out of pawpaws.
He is very clearly selling too cheaply?
- b112 3y agoI know people who won't eat something expensive, because they might get a craving for it/really like it. Some marketing strategies have people underpricing, even if in limited supply, so that demand will accrue. There is more to pricing than min/max theory.
- Carioca 3y agoAnd beyond pricing strategy, there are people who feel that a fair price is intrinsic to the product (e.g. the amount of work that goes into it). For example, it's pretty common in the classical guitar luthier world for there to be a decade-plus waiting list for some masters. They refuse to scale up their prices to “market-level” (i.e. a couple years max, takes months to build a guitar), because they don't want the guitars going to someone for purely economic reasons. Mind you, these are still very expensive, five figure instruments. (edit: you could obviously think of it as a strategy that maximizes some other utility function in which profit is just one parameter)
- phyzome 3y agoOr he doesn't feel like overcharging for what they cost to grow?
- cykros 3y agoPrice is determined by supply AND demand.
- thfuran 3y agoNo, price is determined exclusively by the seller. The ability to make sales and overall revenue is determined by supply and demand.
- deleted 3y ago[deleted]
- JumpCrisscross 3y ago> price is determined exclusively by the seller Nope. A seller can choose to sell below the market price, thereby inducing a shortage. In this case, it’s unclear the seller could predictably clear this perishable stock at a higher price.
- rileymat2 3y agoIt looks like you are talking past each other with one referring to something like the price on the tag and another talking of the most profitable price.
- JumpCrisscross 3y ago> one referring to something like the price on the tag and another talking of the most profitable price Market versus negotiated price. The market price is not controlled by a non-monopoly seller or non-monopsony buyer. That doesn’t preclude someone being convinced, in exchange for a bulk order, long-term commitment (formally or informally), out of sympathy, or a bribe or because a participant is misinformed or an idiot, to sell off market at a different negotiated price.
- deleted 3y ago[deleted]
- rileymat2 3y agoThat is very helpful, I did not have the right words.
- jdietrich 3y agoA flood of customers visiting your stall in the hopes of buying an elusive pawpaw may well be more profitable overall than a steady trickle of customers willing to pay the market-clearing price. C.f. the crazed crowds of bargain hunters on Black Friday, or the abundance of artificial scarcity in the premium sneaker and streetwear market. The sort of pricing and supply irregularities that lead to queues and scalpers and hype are frequently rational for the seller, precisely because of the irrationality of buyers.
- cvalka 3y agoWell said.
- danaris 3y agoIt may come as a shock to you, but there are people for whom getting the maximum possible profit is not the primary concern.
- OJFord 3y agoOk so perhaps it's passion for growing pawpaws: sell better and that's more revenue to grow the operation. Perhaps it's living more comfortably, working to live not living to work etc.: sell higher at fewer markets, grow/pick less. It may come as a shock to you, but I'm not a SV startup guy, and my own employment is certainly not income-maximised.
- matkoniecz 3y ago> He is very clearly selling too cheaply? Taking into account cost of selling (their time) may be a factor. I would prefer to sell for 1000$ in 1 hour over selling for 1100$ over 10 hours. assuming production and transport costs at 500$, and 0% taxes it is leaving with 400$ vs 480$ profit, making it a clearly good idea if you value your time at more than 8.89$/h. And it does not take into account promotion/building consumer loyalty. (obviously real world has many more factors, like selling also other products which may limit time saving and add chance for crossselling stuff)
- JumpCrisscross 3y ago> clearly selling too cheaply? They’re highly perishable, available in small quantities and wildly seasonal. The seller likely needs to drive motivated buyers to their cart, fast and predictably, to make the foraging worthwhile. That unfortunately means pricing in a shortage. This is why the scientists are trying to breed a version that is less perishable, producible in larger quantities or growable more predictably.
- mytailorisrich 3y ago> They’re highly perishable, available in small quantities and wildly seasonal. And there is apparently demand for them, which overall means they should indeed be relatively expensive. If sellers need to "drive motivated buyers to their carts" by selling cheap for such a troublesome product then in a developed country they will probably just not sell it because it isn't worthwhile.
- darkerside 3y agoHow can everyone be so confident without knowing stock, volume, or prices?
- mytailorisrich 3y ago> By the time I arrived at Brooklyn’s Park Slope farmers’ market in search of a pawpaw one morning last week, it was already too late: The weird green fruit had sold out within an hour. “You have to get here early,” Jeff Rowe of Orchard Hill Organics, the market’s lone pawpaw vendor, told me. And > They’re highly perishable, available in small quantities and wildly seasonal. Hence my previous comment, so I don't understand yours...
- darkerside 3y agoHow much should the farmer raise prices by? Hard to say when you don't know what it was priced at. Did the farmer bring 5? 15? 5 bushels? Selling your stock in an hour may be an optimal strategy.