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I will make stores price match anything and everything. I also look at every item on my grocery check out to make sure the price is exactly what the shelf said.

by erkt 1y ago

I will make stores price match anything and everything. I also look at every item on my grocery check out to make sure the price is exactly what the shelf said. I concede no ground to fine print sales expiration dates. However, I am a freak when it comes to remembering these things after a decade of business purchasing and I did my fair share of taking advantage of the consumer. I frankly enjoy fighting stores on pricing and get dopamine from a good deal and it pains me to pay more than necessary even if I can afford it just fine. I understand not everyone is like this. There was a period a year or two ago where if you leaked cookies and ad tracking to Amazon and deliberately clicked through to competing sites their algorithm would aggressively slash pricing far below MSRP. I admit I would use this technique in microcenter to get Amazon to give me ludicrously cheap pricing then turn around and make them price match for instant gratification. Retail/amazon operate at a much higher margin than most people realize.

lotsofpulp 1y ago
>Retail/amazon operate at a much higher margin than most people realize. Then why don’t their 10-Ks and 10-Qs show it? There is a reason it has a reputation of being a cutthroat business. Out of all the big retail businesses, only Home Depot/Lowes has 8%+ profit margins, and Apple obviously. https://www.macrotrends.net/stocks/charts/WMT/walmart/net-profit-margin https://www.macrotrends.net/stocks/charts/WMT/walmart/net-pr... https://www.macrotrends.net/stocks/charts/BBY/best-buy/net-profit-margin https://www.macrotrends.net/stocks/charts/BBY/best-buy/net-p... https://www.macrotrends.net/stocks/charts/COST/costco/net-profit-margin https://www.macrotrends.net/stocks/charts/COST/costco/net-pr... https://www.macrotrends.net/stocks/charts/KR/kroger/net-profit-margin https://www.macrotrends.net/stocks/charts/KR/kroger/net-prof... https://www.macrotrends.net/stocks/charts/ACI/albertsons/net-profit-margin https://www.macrotrends.net/stocks/charts/ACI/albertsons/net... https://www.macrotrends.net/stocks/charts/TGT/target/net-profit-margin https://www.macrotrends.net/stocks/charts/TGT/target/net-pro... https://www.macrotrends.net/stocks/charts/JWN/nordstrom/net-profit-margin https://www.macrotrends.net/stocks/charts/JWN/nordstrom/net-... https://www.macrotrends.net/stocks/charts/M/macys/net-profit-margin https://www.macrotrends.net/stocks/charts/M/macys/net-profit... https://www.macrotrends.net/stocks/charts/WBA/walgreens/net-profit-margin https://www.macrotrends.net/stocks/charts/WBA/walgreens/net-... https://www.macrotrends.net/stocks/charts/CVS/cvs-health/net-profit-margin https://www.macrotrends.net/stocks/charts/CVS/cvs-health/net...
- erkt 1y ago
  Because net profit margin is different from gross margin. The products are still marked up way higher than that bottom line number. PMn is the margin after you add in all the over head costs and those really have little to do with whether they are loosing money by selling a product under their target mark up. Best Buy making a gross $250 on a $1000 priced TV or $50 when discounted to $800 still isn’t loosing any money unless they are at their credit ceiling and cannot replace the good sold. They make zero if A customer standing in their store deciding not to even give them $50 and giving it a to a competitor on their cellphone. Tho is absolutely profit opportunity lost, even if it is small.
  - erkt 1y ago
    Consider the case of a business operating at excessive margins with huge room to discount but doesn’t. Their fixed costs must then be spread over few transactions and lower their net margins to almost nothing. Instead a business operating at a much more socially optimum price point sells a huge amount of goods at a lower mark up and gets to spread those fixed costs over a lot more transactions. Their Gross markup may be less than the high priced store but their net margin can be higher. I set a lot of prices during the pandemic. Any average business found that they were granted some degree of monopoly power and could generate higher net margins with less competitive prices. Many of us found the simplest solution was to just pass on all costs to the consumer because they had no choice but to take our price or not get their good. Times are different and there is competition but many businesses have still forgotten how to increase gross margin by having a sale. Not to get into politics but tariffs are the same way. The elasticity of demand for a good determines the monopoly power of the supplier/retailer and how much of the tariff gets passed on to the consumer. Highly interchangeable products will not see the full tariff passed on to the consumer because that would mean forgoing all sales. The importer will determine how much gross margin they can give up without loosing money…but the producer in the foreign country also does the same math. Do they completely give up the American market to save inventory for other markets or do they eat some top line profit and still make some sales. Many goods will indeed be pulled from the market, but if the producer fails to find replacement customers in other markets they will look back at 300M Americans and reconsider whether they can give their importer a better price while still making something. If the good expires, like say a case of white wine, or becomes obsolete in the case of say a lightning charging cable there is additional pressure to make the decision before the surplus simply becomes unseeable. If a good has no viable alternatives and is relatively shelf stable expect all tariffs to be passed along because the products price is already disconnected from its cost and the business producing it is closer to a monopoly than not.

by erkt 1y ago

lotsofpulp 1y ago

>Retail/amazon operate at a much higher margin than most people realize. Then why don’t their 10-Ks and 10-Qs show it? There is a reason it has a reputation of being a cutthroat business. Out of all the big retail businesses, only Home Depot/Lowes has 8%+ profit margins, and Apple obviously. https://www.macrotrends.net/stocks/charts/WMT/walmart/net-profit-margin https://www.macrotrends.net/stocks/charts/WMT/walmart/net-pr... https://www.macrotrends.net/stocks/charts/BBY/best-buy/net-profit-margin https://www.macrotrends.net/stocks/charts/BBY/best-buy/net-p... https://www.macrotrends.net/stocks/charts/COST/costco/net-profit-margin https://www.macrotrends.net/stocks/charts/COST/costco/net-pr... https://www.macrotrends.net/stocks/charts/KR/kroger/net-profit-margin https://www.macrotrends.net/stocks/charts/KR/kroger/net-prof... https://www.macrotrends.net/stocks/charts/ACI/albertsons/net-profit-margin https://www.macrotrends.net/stocks/charts/ACI/albertsons/net... https://www.macrotrends.net/stocks/charts/TGT/target/net-profit-margin https://www.macrotrends.net/stocks/charts/TGT/target/net-pro... https://www.macrotrends.net/stocks/charts/JWN/nordstrom/net-profit-margin https://www.macrotrends.net/stocks/charts/JWN/nordstrom/net-... https://www.macrotrends.net/stocks/charts/M/macys/net-profit-margin https://www.macrotrends.net/stocks/charts/M/macys/net-profit... https://www.macrotrends.net/stocks/charts/WBA/walgreens/net-profit-margin https://www.macrotrends.net/stocks/charts/WBA/walgreens/net-... https://www.macrotrends.net/stocks/charts/CVS/cvs-health/net-profit-margin https://www.macrotrends.net/stocks/charts/CVS/cvs-health/net...

erkt 1y ago
Because net profit margin is different from gross margin. The products are still marked up way higher than that bottom line number. PMn is the margin after you add in all the over head costs and those really have little to do with whether they are loosing money by selling a product under their target mark up. Best Buy making a gross $250 on a $1000 priced TV or $50 when discounted to $800 still isn’t loosing any money unless they are at their credit ceiling and cannot replace the good sold. They make zero if A customer standing in their store deciding not to even give them $50 and giving it a to a competitor on their cellphone. Tho is absolutely profit opportunity lost, even if it is small.
- erkt 1y ago
  Consider the case of a business operating at excessive margins with huge room to discount but doesn’t. Their fixed costs must then be spread over few transactions and lower their net margins to almost nothing. Instead a business operating at a much more socially optimum price point sells a huge amount of goods at a lower mark up and gets to spread those fixed costs over a lot more transactions. Their Gross markup may be less than the high priced store but their net margin can be higher. I set a lot of prices during the pandemic. Any average business found that they were granted some degree of monopoly power and could generate higher net margins with less competitive prices. Many of us found the simplest solution was to just pass on all costs to the consumer because they had no choice but to take our price or not get their good. Times are different and there is competition but many businesses have still forgotten how to increase gross margin by having a sale. Not to get into politics but tariffs are the same way. The elasticity of demand for a good determines the monopoly power of the supplier/retailer and how much of the tariff gets passed on to the consumer. Highly interchangeable products will not see the full tariff passed on to the consumer because that would mean forgoing all sales. The importer will determine how much gross margin they can give up without loosing money…but the producer in the foreign country also does the same math. Do they completely give up the American market to save inventory for other markets or do they eat some top line profit and still make some sales. Many goods will indeed be pulled from the market, but if the producer fails to find replacement customers in other markets they will look back at 300M Americans and reconsider whether they can give their importer a better price while still making something. If the good expires, like say a case of white wine, or becomes obsolete in the case of say a lightning charging cable there is additional pressure to make the decision before the surplus simply becomes unseeable. If a good has no viable alternatives and is relatively shelf stable expect all tariffs to be passed along because the products price is already disconnected from its cost and the business producing it is closer to a monopoly than not.