3 ms·

Mom-and-pop businesses usually have to charge higher prices, because they can't get large volume discounts. Big companies also have the infrastructure to ship

Mom-and-pop businesses usually have to charge higher prices, because they can't get large volume discounts. Big companies also have the infrastructure to ship things reliably from overseas. When it comes down to it, most people would rather save money and pay less than shop at small businesses. On a note about radio: it's dead. If you want a local radio feel, listen to podcasts. Stephen King most likely is losing advertisers because radio, as a medium, is getting overtaken by podcasts and things like Youtube. I used to listen to the radio every day and I haven't been a regular listener for almost a decade.

CubsFan1060 2y ago
> When it comes down to it, most people would rather save money and pay less than shop at small businesses. You hit the nail on the head exactly here. People are very good at maximizing their short term situation, even at the detriment to their community. A good example is people who travel to nearby cities to buy things because they have lower taxes. They don't seem to understand that (for the most part), taxes in their own city benefit their city. Taxes they pay to a neighboring city don't benefit them or their neighbors.
- mattmaroon 2y ago
  Eh. Retail is only one type of business. The fraction of businesses that are small fluctuates by a couple percent here and there but isn’t on some long term decline. How is it to our long term benefit to continue paying more for goods forever? Maybe we’re just better off in a world where industries that have severe economies of scale like retail get consumed by the big guys so we all save money, and small businesses keep fixing the pipes, designing our graphics, etc.
  - CubsFan1060 2y ago
    I can't back this up with data, so this is just my opinion. Economies of scale are better in almost every way, if the benefits of economies of scale are somewhat evenly distributed, and that the benefits don't come with significant negatives somewhere else. However, most of the time, the majority of the benefits of economies of scale tend to go to the wealthy. The small amount of benefits that do go to consumers/people make them think that they are the beneficiaries, and often the societal cost is masked.
    - foxglacier 2y ago
      It should be OK if those big companies are publicly traded and mostly owned by ultimately, lots of individuals, say through retirement funds investing in them?
    - mattmaroon 2y ago
      Lots of small businesses exist in areas that do not have economies of scale, and sometimes have diseconomies. Think businesses where labor is the majority of the costs. Your local plumbing company is probably a small to medium business and Roto-Rooter isn’t hurting them. Some have some economies of scale but not severe and service or quality or other things matter and there you usually find big businesses and small competing with each other. (I work in the packaged food world, it falls into this category.) And some, like retail, have such large economies of scale that a small business just can’t really compete. In the case of retail, this is largely because of logistics being such a big portion of cost of goods.
- lolinder 2y ago
  > They don't seem to understand that (for the most part), taxes in their own city benefit their city. They usually understand that perfectly well, but understanding that doesn't mean that they should not rationally try to minimize the taxes that they personally pay. The ideal scenario for any individual A is that A pays as little in taxes as possible and all A's neighbors pay as much as necessary to fund the government programs which A benefits from. For A, intentionally shopping locally in order to pay higher but local taxes is against their own rational self interest. Policy shouldn't be designed to only work for the collective good if every individual works against their own self interest—any policy designed that way is doomed to failure from the get go.
  - throwway120385 2y ago
    I think the point being made here is not that people should work against their own "rational self interest" but that paying taxes in your local community to support infrastructure, policing, education, public services, public health, and so on is actually directly in your own self interest. But people have this idea that taxes benefit nobody so we work scrupulously to avoid them. One of the biggest socialist programs of wealth redistribution in the US is actually our highway and road system, where we pay hundreds of billions of dollars from cities to smaller municipalities and counties to maintain a system of public roadways by which those smaller municipalities can reach larger cities by car. Absolutely nobody complains about that. So clearly paying taxes on that is beneficial. And that suggests that paying taxes on other things is beneficial.
    - lolinder 2y ago
      > and so on is actually directly in your own self interest. But people have this idea that taxes benefit nobody so we work scrupulously to avoid them. But my point is that it's not. It's in your interest to have those things but not in your interest to pay for them. Having government programs such as roads is beneficial. Paying for roads out of your own pocket is not. So we should expect to see people dodge taxes wherever it's practical to do so. This has implications for how you design a taxation system. For example, there is an optimal sales tax rate that is neither significantly lower than your neighbors nor significantly higher—one where the inconvenience of shopping somewhere else is higher than the cost of shopping locally. The only way to get around the problem is to make receiving the government services contingent on paying the tax. Vehicle registration fees are a good example, as are property taxes. If roads are paid for out of a tax that you can't avoid paying if you own a car, then using the government-provided infrastructure is contingent on paying for it and it's in your self interest to do so. Sales taxes are particularly problematic in this regard because the people who pay them are often not the people who benefit from the programs paid for. (Though this is less true in small isolated towns than it is in large Metro areas.)
- ensignavenger 2y ago
  If they are regularly spending time in that neighboring community, then the taxes they pay their do benefit them. I think it is more a vote of no confidence in local leadership.
ANewFormation 2y ago
I don't think the shipping is about infrastructure, but I don't know what it is. You can get a 40 foot shipping container (~2400 cubic feet) shipped half way around the world for ~$4k, yet try to ship a cubic foot of volume using any normal commercial shipping service, and you'll probably pay $100+. Perhaps I'm missing something, but if not then the shipping market is just completely broken and begging for disruption.
- lolinder 2y ago
  What you're describing is the same as in any market—wholesale costs less per unit than retail because there are enormous gains in efficiency for the seller when they don't have to deal with smaller units. In the case of shipping, I'm not an expert but I do know a few of them: * The amount of time per mile a human needs to spend handling that shipping container is lower, because there are only a few very long legs rather than many transfers. * The amount of time per pound of goods a human has to spend handling the shipping container is much lower, because the container is moved all at once, where your cubic-foot package has to be handled individually. * The fuel cost per pound of goods per mile is lower with the shipping container because it is usually transported by boat and train, which are far more efficient than the trucks used in last-mile delivery.
  - ANewFormation 2y ago
    What I'm getting at is that baseline costs for a cubic foot are about $1.50. A startup could sell cubic foot containers for $5 - shipped when able to fill a crate, and have a massive margin, for those willing to trade time for a 95% cost reduction. That no such service exists is so weird and dysfunctional. This also applies to endless other real world things and services. Prices for so many things are completely out of touch with reasonably approachable costs, yet there's no Elon in shipping or these zillion other broken industries that, if fixed, could really reshape and perhaps even revitalize the American economy.
- lovich 2y ago
  If you want to move less atoms than the standard(a standardized shipping containers worth), you are going to pay a premium for either the wasted space or for some other agent to figure out how to pack your shit with 100 other small customers and then also unpack that shit at the end and send it to the correct recipients. This is quite literally, one of the benefits people are referencing when doing commerce in large quantities when they mention “economy of scale”. In computer science terms the shipping containers are like bits. They either exist or they don’t. If you want something with more precision like an integer or a float, you can make it happen, but it’s more costly in terms of resources

CubsFan1060 2y ago

> When it comes down to it, most people would rather save money and pay less than shop at small businesses. You hit the nail on the head exactly here. People are very good at maximizing their short term situation, even at the detriment to their community. A good example is people who travel to nearby cities to buy things because they have lower taxes. They don't seem to understand that (for the most part), taxes in their own city benefit their city. Taxes they pay to a neighboring city don't benefit them or their neighbors.

mattmaroon 2y ago
Eh. Retail is only one type of business. The fraction of businesses that are small fluctuates by a couple percent here and there but isn’t on some long term decline. How is it to our long term benefit to continue paying more for goods forever? Maybe we’re just better off in a world where industries that have severe economies of scale like retail get consumed by the big guys so we all save money, and small businesses keep fixing the pipes, designing our graphics, etc.
- CubsFan1060 2y ago
  I can't back this up with data, so this is just my opinion. Economies of scale are better in almost every way, if the benefits of economies of scale are somewhat evenly distributed, and that the benefits don't come with significant negatives somewhere else. However, most of the time, the majority of the benefits of economies of scale tend to go to the wealthy. The small amount of benefits that do go to consumers/people make them think that they are the beneficiaries, and often the societal cost is masked.
  - foxglacier 2y ago
    It should be OK if those big companies are publicly traded and mostly owned by ultimately, lots of individuals, say through retirement funds investing in them?
  - mattmaroon 2y ago
    Lots of small businesses exist in areas that do not have economies of scale, and sometimes have diseconomies. Think businesses where labor is the majority of the costs. Your local plumbing company is probably a small to medium business and Roto-Rooter isn’t hurting them. Some have some economies of scale but not severe and service or quality or other things matter and there you usually find big businesses and small competing with each other. (I work in the packaged food world, it falls into this category.) And some, like retail, have such large economies of scale that a small business just can’t really compete. In the case of retail, this is largely because of logistics being such a big portion of cost of goods.
lolinder 2y ago
> They don't seem to understand that (for the most part), taxes in their own city benefit their city. They usually understand that perfectly well, but understanding that doesn't mean that they should not rationally try to minimize the taxes that they personally pay. The ideal scenario for any individual A is that A pays as little in taxes as possible and all A's neighbors pay as much as necessary to fund the government programs which A benefits from. For A, intentionally shopping locally in order to pay higher but local taxes is against their own rational self interest. Policy shouldn't be designed to only work for the collective good if every individual works against their own self interest—any policy designed that way is doomed to failure from the get go.
- throwway120385 2y ago
  I think the point being made here is not that people should work against their own "rational self interest" but that paying taxes in your local community to support infrastructure, policing, education, public services, public health, and so on is actually directly in your own self interest. But people have this idea that taxes benefit nobody so we work scrupulously to avoid them. One of the biggest socialist programs of wealth redistribution in the US is actually our highway and road system, where we pay hundreds of billions of dollars from cities to smaller municipalities and counties to maintain a system of public roadways by which those smaller municipalities can reach larger cities by car. Absolutely nobody complains about that. So clearly paying taxes on that is beneficial. And that suggests that paying taxes on other things is beneficial.
  - lolinder 2y ago
    > and so on is actually directly in your own self interest. But people have this idea that taxes benefit nobody so we work scrupulously to avoid them. But my point is that it's not. It's in your interest to have those things but not in your interest to pay for them. Having government programs such as roads is beneficial. Paying for roads out of your own pocket is not. So we should expect to see people dodge taxes wherever it's practical to do so. This has implications for how you design a taxation system. For example, there is an optimal sales tax rate that is neither significantly lower than your neighbors nor significantly higher—one where the inconvenience of shopping somewhere else is higher than the cost of shopping locally. The only way to get around the problem is to make receiving the government services contingent on paying the tax. Vehicle registration fees are a good example, as are property taxes. If roads are paid for out of a tax that you can't avoid paying if you own a car, then using the government-provided infrastructure is contingent on paying for it and it's in your self interest to do so. Sales taxes are particularly problematic in this regard because the people who pay them are often not the people who benefit from the programs paid for. (Though this is less true in small isolated towns than it is in large Metro areas.)
ensignavenger 2y ago
If they are regularly spending time in that neighboring community, then the taxes they pay their do benefit them. I think it is more a vote of no confidence in local leadership.

ANewFormation 2y ago

I don't think the shipping is about infrastructure, but I don't know what it is. You can get a 40 foot shipping container (~2400 cubic feet) shipped half way around the world for ~$4k, yet try to ship a cubic foot of volume using any normal commercial shipping service, and you'll probably pay $100+. Perhaps I'm missing something, but if not then the shipping market is just completely broken and begging for disruption.

lolinder 2y ago
What you're describing is the same as in any market—wholesale costs less per unit than retail because there are enormous gains in efficiency for the seller when they don't have to deal with smaller units. In the case of shipping, I'm not an expert but I do know a few of them: * The amount of time per mile a human needs to spend handling that shipping container is lower, because there are only a few very long legs rather than many transfers. * The amount of time per pound of goods a human has to spend handling the shipping container is much lower, because the container is moved all at once, where your cubic-foot package has to be handled individually. * The fuel cost per pound of goods per mile is lower with the shipping container because it is usually transported by boat and train, which are far more efficient than the trucks used in last-mile delivery.
- ANewFormation 2y ago
  What I'm getting at is that baseline costs for a cubic foot are about $1.50. A startup could sell cubic foot containers for $5 - shipped when able to fill a crate, and have a massive margin, for those willing to trade time for a 95% cost reduction. That no such service exists is so weird and dysfunctional. This also applies to endless other real world things and services. Prices for so many things are completely out of touch with reasonably approachable costs, yet there's no Elon in shipping or these zillion other broken industries that, if fixed, could really reshape and perhaps even revitalize the American economy.
lovich 2y ago
If you want to move less atoms than the standard(a standardized shipping containers worth), you are going to pay a premium for either the wasted space or for some other agent to figure out how to pack your shit with 100 other small customers and then also unpack that shit at the end and send it to the correct recipients. This is quite literally, one of the benefits people are referencing when doing commerce in large quantities when they mention “economy of scale”. In computer science terms the shipping containers are like bits. They either exist or they don’t. If you want something with more precision like an integer or a float, you can make it happen, but it’s more costly in terms of resources