4 ms·

Why must you increase the price?

by docjay 2mo ago

LoganDark 2mo ago
Because if you take orders otherwise you won't be able to fulfill them.
somat 2mo ago
It is the other way around, When people want something they are willing to pay more for it. The manufacturer wants to sell to the person that will pay the most. While the person wants to buy from the manufacturer that charges the least. As such when the manufacturing capacity is below demand the price goes up until the item is worth what people will pay for it(at large, statistically, it works like an auction). The promise of capitalism is that as the price goes up it should incentivize manufacturing capacity to go up and as the capacity meets demand and the manufactures start to fight each other to be the one to sell the item the price goes down. Sometimes this works and sometimes it does not.
- docjay 2mo ago
  Thank you for taking the time and effort to provide a clear explanation. I’m familiar with supply and demand though. My emphasis was on “must” as a lazy protest against greed being considered a mandatory part of capitalism. Prices don’t have to go up, someone just wants more money. If you happily sell apples for $1 and see a hungry person walking towards you, must you raise the price? I think that basic thought gets lost sometimes when people talk about shortages causing the price to increase. The shortage didn’t cause anything, some executive decided they want more money. That’s all. There’s nothing inherent in the system that requires it. Whether that’s OK or not is up to the reader, I just think people lose sight of the reality and talk about it like it’s gravity, rather than simple decision making.
  - ShinyLeftPad 2mo ago
    > If you happily sell apples for $1 and see a hungry person walking towards you, must you raise the price? if you happily sell apples for $1 and now there are VC-funded companies who need a ton of apples to produce some dubious crap and can pay you $5 per. And you are the only company selling apples. what you should do is keep selling $1 apples to retail customers and charge corporations as much as they accept. you invest it into more apple trees and maybe subsidize the hungry people even
    - 1718627440 2mo ago
      The issue with that solution is that in order to sell to retail customers, they sell to other large corporations, which they think are going to sell to retail customers. Guess what happens when they find out, you are charging other corporation higher prices.
      - ShinyLeftPad 2mo ago
        Guess they have no choice, because you're the only one selling apples
    - docjay 2mo ago
      But what do you suppose the corporations do with the apples you’re selling to them? Adding a degree of separation doesn’t change what you’re doing, and you’re not morphing into Robin Hood. To be clear, I’m not taking a fully altruistic position. I’m just tired of price hikes on things, from apples to memory, being blamed on the weather rather than openly understanding that it’s a person wanting more money. “I can’t afford gas because of the shortage” - No, it was the CEO saying a number in a meeting and that person has a name. When someone is robbed we don’t say “an economic disparity caused a wealth adjustment.”
      - ShinyLeftPad 2mo ago
        It's not Robin Hood it's basic decency...
cortesoft 2mo ago
The alternative is to have shortages. If there is demand for N chips at $X price, but you only have N/2 chips, then half the people aren't going to be able to buy them. The people who really need the chips, and would be willing to pay a lot more than $X for them, will be competing with people who are only willing to pay $X for them. You will end up getting scalping and shortages and hoarding. Since people know that there are enough people willing to pay a higher price, everyone will try to buy them at $X, even if they don't need them at all. Just buy them at $X, and immediately sell it to one of those companies willing to pay a lot more. The market is extremely inefficient... since the manufacturer isn't charging enough, you get way too many people trying to buy them from the manufacturer. So you find the price where the demand is N/2 chips, and everyone who is willing to pay that much will get one, and there is no profit for scalpers so the only people who will buy them will be actual companies that need them.
- docjay 2mo ago
  If demand outpaces supply then there’s a shortage no matter what you do. I don’t believe scalpers are an issue in B2B; these aren’t concert tickets being sold to the general public. It’s clear you grasp the economic theory as it’s taught, but my comment was meant for you to question it. If someone is hungry you can charge more for food. The market allows and encourages it. But don’t mistake that for “willingness” and don’t mistake raising the prices purely to get extra money from the exchange as some inevitable law of the universe. You’re welcome to love the concept, but don’t whitewash it.
  - crote 2mo ago
    > If demand outpaces supply then there’s a shortage no matter what you do. Demand is elastic. If the price of potatoes rises to $1000 / kg most people will switch to using pasta or rice for their dinner instead. There might be a shortage of potatoes at $1 / kg, but not at $1000 / kg. If my 7-year-old computer were to die tomorrow I would've normally replace the entire thing. It has had a good life, the newer generations of hardware are a decent bunch faster, and it would be nice to get some additional features. With current RAM prices? No way I can afford to upgrade to DDR5, I'll have to get a replacement AM4 motherboard / CPU to fix it. > I don’t believe scalpers are an issue in B2B They are called "speculators". DRAM is a commodity and is traded no different from, say, potatoes. It's why there are companies like DRAMeXchange. DRAM module assemblers like Kingston, G.Skill, and Corsair will buy chips from whoever gives them the best deal. Similarly, anyone assembling hardware using DRAM will have stockpiled it when the AI boom became noticeable - with some almost certainly selling it off now that it has become too valuable to use for cheaper products.
inigyou 2mo ago
Because otherwise you will be outcompeted. In other words capitalism will fire you for doing a bad job.

Why must you increase the price?

by docjay 2mo ago

Why must you increase the price?

LoganDark 2mo ago

Because if you take orders otherwise you won't be able to fulfill them.

somat 2mo ago

It is the other way around, When people want something they are willing to pay more for it. The manufacturer wants to sell to the person that will pay the most. While the person wants to buy from the manufacturer that charges the least. As such when the manufacturing capacity is below demand the price goes up until the item is worth what people will pay for it(at large, statistically, it works like an auction). The promise of capitalism is that as the price goes up it should incentivize manufacturing capacity to go up and as the capacity meets demand and the manufactures start to fight each other to be the one to sell the item the price goes down. Sometimes this works and sometimes it does not.

docjay 2mo ago
Thank you for taking the time and effort to provide a clear explanation. I’m familiar with supply and demand though. My emphasis was on “must” as a lazy protest against greed being considered a mandatory part of capitalism. Prices don’t have to go up, someone just wants more money. If you happily sell apples for $1 and see a hungry person walking towards you, must you raise the price? I think that basic thought gets lost sometimes when people talk about shortages causing the price to increase. The shortage didn’t cause anything, some executive decided they want more money. That’s all. There’s nothing inherent in the system that requires it. Whether that’s OK or not is up to the reader, I just think people lose sight of the reality and talk about it like it’s gravity, rather than simple decision making.
- ShinyLeftPad 2mo ago
  > If you happily sell apples for $1 and see a hungry person walking towards you, must you raise the price? if you happily sell apples for $1 and now there are VC-funded companies who need a ton of apples to produce some dubious crap and can pay you $5 per. And you are the only company selling apples. what you should do is keep selling $1 apples to retail customers and charge corporations as much as they accept. you invest it into more apple trees and maybe subsidize the hungry people even
  - 1718627440 2mo ago
    The issue with that solution is that in order to sell to retail customers, they sell to other large corporations, which they think are going to sell to retail customers. Guess what happens when they find out, you are charging other corporation higher prices.
    - ShinyLeftPad 2mo ago
      Guess they have no choice, because you're the only one selling apples
  - docjay 2mo ago
    But what do you suppose the corporations do with the apples you’re selling to them? Adding a degree of separation doesn’t change what you’re doing, and you’re not morphing into Robin Hood. To be clear, I’m not taking a fully altruistic position. I’m just tired of price hikes on things, from apples to memory, being blamed on the weather rather than openly understanding that it’s a person wanting more money. “I can’t afford gas because of the shortage” - No, it was the CEO saying a number in a meeting and that person has a name. When someone is robbed we don’t say “an economic disparity caused a wealth adjustment.”
    - ShinyLeftPad 2mo ago
      It's not Robin Hood it's basic decency...

cortesoft 2mo ago

The alternative is to have shortages. If there is demand for N chips at $X price, but you only have N/2 chips, then half the people aren't going to be able to buy them. The people who really need the chips, and would be willing to pay a lot more than $X for them, will be competing with people who are only willing to pay $X for them. You will end up getting scalping and shortages and hoarding. Since people know that there are enough people willing to pay a higher price, everyone will try to buy them at $X, even if they don't need them at all. Just buy them at $X, and immediately sell it to one of those companies willing to pay a lot more. The market is extremely inefficient... since the manufacturer isn't charging enough, you get way too many people trying to buy them from the manufacturer. So you find the price where the demand is N/2 chips, and everyone who is willing to pay that much will get one, and there is no profit for scalpers so the only people who will buy them will be actual companies that need them.

docjay 2mo ago
If demand outpaces supply then there’s a shortage no matter what you do. I don’t believe scalpers are an issue in B2B; these aren’t concert tickets being sold to the general public. It’s clear you grasp the economic theory as it’s taught, but my comment was meant for you to question it. If someone is hungry you can charge more for food. The market allows and encourages it. But don’t mistake that for “willingness” and don’t mistake raising the prices purely to get extra money from the exchange as some inevitable law of the universe. You’re welcome to love the concept, but don’t whitewash it.
- crote 2mo ago
  > If demand outpaces supply then there’s a shortage no matter what you do. Demand is elastic. If the price of potatoes rises to $1000 / kg most people will switch to using pasta or rice for their dinner instead. There might be a shortage of potatoes at $1 / kg, but not at $1000 / kg. If my 7-year-old computer were to die tomorrow I would've normally replace the entire thing. It has had a good life, the newer generations of hardware are a decent bunch faster, and it would be nice to get some additional features. With current RAM prices? No way I can afford to upgrade to DDR5, I'll have to get a replacement AM4 motherboard / CPU to fix it. > I don’t believe scalpers are an issue in B2B They are called "speculators". DRAM is a commodity and is traded no different from, say, potatoes. It's why there are companies like DRAMeXchange. DRAM module assemblers like Kingston, G.Skill, and Corsair will buy chips from whoever gives them the best deal. Similarly, anyone assembling hardware using DRAM will have stockpiled it when the AI boom became noticeable - with some almost certainly selling it off now that it has become too valuable to use for cheaper products.

inigyou 2mo ago

Because otherwise you will be outcompeted. In other words capitalism will fire you for doing a bad job.