> It makes me sad to time and time again learn that the low prices of services I love are unsustainable and instead subsidized by treating someone unfairly downstream.
In general, price competitiveness on the market is based on some form of workforce exploitation.
I know it's not a zero sum game and so on, but someone is paying the difference on the discounted price you are offered.
> It’s not a bad progressive model to have people who aren’t price-sensitive subsidize people who are.
It is entirely bad. It arrogates consumer surplus to the supplier. The people paying higher prices don’t subsidise those paying lower prices, the supplier pockets most of the gains. They’d like you to believe that the people paying cheaper prices are subsidised, but they’re not selling to them at a loss. And it causes a deadweight efficiency loss.
The fact that businesses can pass this off as some kind of progressive pricing and good for the consumer makes it as disingenuous as it is pernicious.
>If you are subsidizing your unit economics and your competition drops prices they are forcing you to lose more money. We prefer seek efficiencies and pass those savings on instead of just spending more money.
Unless by subsidizing, this company takes more market share and causes the non-subsidizer to dip into their own margin, and the race to the bottom continues.
> Would you prefer a less greedy corporation that goes where the most expensive labor is which then increases the cost of production which then increases the cost of the products you buy from said company?
Well, yes actually, if the higher cost of those products buys me something that I believe to be worthwhile. There's a whole bunch of stuff I am willing to pay more for, higher quality, better customer service, local ownership or representation, good labor practices, environmental concern, and on and on. I hate this idea that somehow price is the only thing that companies can compete on.
> Clearly the fact that people are talking about this in a generally negative way shows that they aren't seeing it as getting a bargain.
That's because the same companies who have been jacking up prices for no reason sure as hell aren't looking to do us any favors now. They'll use this to extract as much money from us as they can think they can get away and if we complain about their prices they will blame us for not rearranging our lives to match their random schedules.
> Everyday people honestly don't understand why prices are what they are. I've had a number of conversations with people and they truly believe that prices are arbitrarily set based on how much owners want to screw customers over.
Generally, a company will charge the highest price they can get away with, irrespective of the cost it took to produce the good or service.
Prices only approach the cost of production when there is strong competition among industry players. Basic tactics like branding, consolidation, and lack of transparency in an industry help subvert competition.
> Keeping prices low is a great thing. I wish Walmart and Amazon every success in that endeavor.
I don't. Our collective fetish to reduce prices to an absolute minimum has had nothing but terrible effects on pretty much everything.
It has increased poverty, it has decreased product quality, it has reduced the vibrancy and competitiveness of our economy, it has encouraged the worst aspects of our society.
And it hasn't made anything better for anybody. It's nothing but a collective self-destructive race to the bottom.
It's one thing to shop for a lower price, it's quite another to notice someone's desperate and take advantage.
> The collective population of the world does this when we chose to purchase things for cheaper prices made in countries with more lax environmental and labor laws.
An a lot of people object to that, too, and they often lack the power to make any other decision.
> In my opinion, enterprise pricing is an absolute racket.
That's one way of looking at it I guess. The other way of looking at it is that every company that doesn't charge each customer exactly what they can pay rather than something possibly less, is leaving money on the table.
> In the best outcome, the customer would be paying exactly the same amount that they pay now, or more, it just wouldn't be separated or optional in the bill.
I'd pay a premium just to avoid the distasteful master-servant relationship. It's insulting to assume that the customer would enjoy lording over others.
> just because they want a discount
It never crossed my mind that people do this. That's lousy.
> Everything would be priced at the highest possible price that you'd still pay.
That is almost always the case anyway. Things are priced at the point that one would pay. To lament that on behalf of the consumer and not of the business is hypocritical, or more concretely, self-interested, as of course we all are.
> how much poorer we would all be, if we lose the consumer surplus.
To summarize my point, imagine how richer we would all be if we didn't have to pay anything at all. Unfortunately, that is a false world; production depends on consumers paying what they can and businesses charging what they must.
> Because it's a market and prices of their time should be as high as their skills can be priced, not as low as possible to survive.
In an efficient competitive market, the expected behavior is that each seller will set the price they are willing to sell the next unit of what they are selling at the cost to them of providing that next unit (including the opportunity cost of what they give up to provide it.)
> and when they don't understand it, their price demping hurts whole market.
I think they do understand it. Its just that the people who have higher costs don't like that it prices those sellers out of the market. But welcome to a robust competitive market.
> it isn't worth the brain damage to sell to customers looking for the lowest price
The cheapest customers are always the most expensive to work with. It’s a sad reality.
I worked at several companies who for some foolish reason saw the cheapo customers as some untapped market and when they raced to the bottom they lost every time.
> Despite all the complaining about these prices, people are obviously still paying them.
Because they have no other choice.
Reminds me of the bus strike when I was driving cabs in Phoenix, people paid the price but nobody was happy about it as the other option was not having a job.
Destroy the competition then charge whatever you want.
>these bigger companies are setting prices to always match or undercut pricing elsewhere. This squeezes the advantage smaller players may have on pricing, and big players can afford to do so even at a loss.
That sounds like a win for the consumer
>This squeezes the advantage smaller players may have on pricing
Small players competing on price alone with Walmart or Amazon is suicidal. Offering something other than low price is a way to compete.
> If businesses are trying to get more money, they should do it by transparently raising prices instead of tricking people into paying hidden fees.
Yup. This seems like a terrible long term strategy. If I'd eaten expecting $X, and the total is now $X + $Y, and they have the nerve to remind me it's not a tip, I'm probably not leaving a tip, and I'm -definitely- not coming back.
Most cities are rather static in populace. This is a great way to see yourself out of business for a tiny short term profit.
> it's soo frustrating to see how we're ripped off for no good reason
It isn’t for no good reason, the prices are higher for the exact same reason they are lower in Germany: the price set allows the company to make the most money.
Whether prices are high or low, the reason is always exactly the same: it makes the most money.
In general, price competitiveness on the market is based on some form of workforce exploitation.
I know it's not a zero sum game and so on, but someone is paying the difference on the discounted price you are offered.
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