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 Post subject: da biz
PostPosted: 14 Apr 2012 11:26 
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The philosopher Tsang said, "I daily examine myself on three points:-whether, in transacting business for others, I may have been not faithful;-whether, in intercourse with friends, I may have been not sincere;-whether I may have not mastered and practiced the instructions of my teacher."
From the Analects of Confucius.

I work for a large industrial supplier. I work part-time while I further my education. The company charges an outrageous amount of money for items that cost pennies to produce. For instance, a particular type of bolt might cost, say, .05USD. We sell it for .5USD.
We are given a certain latitude to adjust the price (it still is a killing for the company) for our customers. Our store is not meeting sales goals so there is pressure from up top to perform better and I have been told to not discount the prices. One one hand I feel evil for charging so much, but on the other, as the philosopher Tsang said, I must ask myself if I have been faithful in transacting business for others.


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 Post subject: Re: da biz
PostPosted: 14 Apr 2012 12:00 
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Solomon

When you say the bolt cost .05 to produce, how do you determine that is the cost?

Are you referring to the materiel cost?

How much must be added to the cost of each bolt to account for the fringe benefits and overhead costs? How much profit are you making per item?


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 Post subject: Re: da biz
PostPosted: 15 Apr 2012 18:19 
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Value isn't fixed. Just because I say a widget is worth $100, doesn't mean anything unless I can find someone to make a transaction at that price, and actually go through with it.

The bolt in question is worth $0.50 because someone is willing to pay that much for it. It may have only cost your company $0.05 to produce/purchase, but ultimately for the bolt consumer it is cheaper to pay the markup than it is to buy a factory to make the 5 or 10 bolts at $0.05.

If someone is outraged that your bolts are vastly overpriced then they are free to buy bolts from someone else. I wouldn't be surprised if they found a cheap importer on the internet who can sell bolts at far below the retail price you are charging, given the cut-throat nature of e-commerce (and the lack of overheads as well). If you really feel strongly about the evil Bolt-Industrial-Complex and their outrageous markups, you could even start your own business buying bolts at $0.05 and selling them for $0.10.

There is no ethical dilemma here.


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