4 ms·

I didn't get it, the pricing was pretty much what I would have guessed. The markup isn't that high, especially considering they're hard to store and ship. Other

by jrells 12y ago

I didn't get it, the pricing was pretty much what I would have guessed. The markup isn't that high, especially considering they're hard to store and ship. Other things have much higher markup (drinks, fashion, any goods manufactured in china). Where is the voodoo economics?

crazygringo 12y ago
Agreed. There is no voodoo economics, just regular economics. I was disappointed that the article's title promised something really interesting or counterintuitive -- instead, it's just a pretty normal cost breakdown.
- deleted 12y ago
  [deleted]
ChuckMcM 12y ago
I think that was the point. I don't know what the author's motivations were for writing this piece but I would speculate that someone, sitting in their comfy chair reading a story about how Maine lobsterman are complaining about getting only $4/lb for lobster, and seeing it as the $60/plate special at the restaurant complained "Gee someone is making bank here at our expense!" And the author deconstructs that notion by putting names and faces on all the people in the path of harvest to production. But given the title, he will get people who think they are being ripped off to read it, and then they will perhaps find they aren't really being ripped off, there are just a lot of hands between them and the lobster's origin.
- Turing_Machine 12y ago
  Removing those hands is what Bezos does best. Amazon Seafood, anyone?
- brazzy 12y ago
  I think an interesting and nontrivial thing explained by the article is why raw lobster prices are going down but restaurant prices aren't: the largest percentage markup is added by the restaurant, but most of the price the restaurant pays is added by the middlemen and does not vary with the price of the raw product.
VLM 12y ago
One part that didn't mathematically make sense is the fisherman price varied over more than 2 to 1 ratio, yet it doesn't seem to cost very much money to store a lobster. So the fishermen are giving up a large profit by letting someone else store the lobster for them. The voodoo nature is probably around almost all the value being constructed by multiple layers of profit taking middlemen in a supposedly blue collar occupation. This is seen as the norm for the FIRE economic sector, seems odd in a blue collar sector. I'm mystified why no one vertically integrates. If "Red Lobster" owned their own fleet of boats and hired men, they would cut out a lot of profit currently going to multiple stages of middlemen. Or if not big business, one dude could fish during the season, fill his personal warehouse, then go food truck it or whatever for the rest of they year and haul down an immense profit.
- eric_h 12y ago
  > I'm mystified why no one vertically integrates. If "Red Lobster" owned their own fleet of boats and hired men, they would cut out a lot of profit currently going to multiple stages of middlemen. It would appear that they're trying to do that. Not via fishing, but farming: http://articles.orlandosentinel.com/2012-04-08/business/os-darden-lobster-farming-20120408_1_bill-herzig-spiny-red-lobster http://articles.orlandosentinel.com/2012-04-08/business/os-d...

by jrells 12y ago

crazygringo 12y ago

Agreed. There is no voodoo economics, just regular economics. I was disappointed that the article's title promised something really interesting or counterintuitive -- instead, it's just a pretty normal cost breakdown.

deleted 12y ago
[deleted]

ChuckMcM 12y ago

I think that was the point. I don't know what the author's motivations were for writing this piece but I would speculate that someone, sitting in their comfy chair reading a story about how Maine lobsterman are complaining about getting only $4/lb for lobster, and seeing it as the $60/plate special at the restaurant complained "Gee someone is making bank here at our expense!" And the author deconstructs that notion by putting names and faces on all the people in the path of harvest to production. But given the title, he will get people who think they are being ripped off to read it, and then they will perhaps find they aren't really being ripped off, there are just a lot of hands between them and the lobster's origin.

Turing_Machine 12y ago
Removing those hands is what Bezos does best. Amazon Seafood, anyone?
brazzy 12y ago
I think an interesting and nontrivial thing explained by the article is why raw lobster prices are going down but restaurant prices aren't: the largest percentage markup is added by the restaurant, but most of the price the restaurant pays is added by the middlemen and does not vary with the price of the raw product.

VLM 12y ago

One part that didn't mathematically make sense is the fisherman price varied over more than 2 to 1 ratio, yet it doesn't seem to cost very much money to store a lobster. So the fishermen are giving up a large profit by letting someone else store the lobster for them. The voodoo nature is probably around almost all the value being constructed by multiple layers of profit taking middlemen in a supposedly blue collar occupation. This is seen as the norm for the FIRE economic sector, seems odd in a blue collar sector. I'm mystified why no one vertically integrates. If "Red Lobster" owned their own fleet of boats and hired men, they would cut out a lot of profit currently going to multiple stages of middlemen. Or if not big business, one dude could fish during the season, fill his personal warehouse, then go food truck it or whatever for the rest of they year and haul down an immense profit.

eric_h 12y ago
> I'm mystified why no one vertically integrates. If "Red Lobster" owned their own fleet of boats and hired men, they would cut out a lot of profit currently going to multiple stages of middlemen. It would appear that they're trying to do that. Not via fishing, but farming: http://articles.orlandosentinel.com/2012-04-08/business/os-darden-lobster-farming-20120408_1_bill-herzig-spiny-red-lobster http://articles.orlandosentinel.com/2012-04-08/business/os-d...