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The Forum > General Discussion > Small business the price makers V the price takers and the takers are loosing the battle.

Small business the price makers V the price takers and the takers are loosing the battle.

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While there are many successful small businesses, the reality is that these are usually price makers. The likes of plumbers, electricians, engineers, lawyers and alike all have one distinctive advantage, that being that they set their prices and some have seen massive increases in recent times, especially in mining towns.

Then there's the price takers, those in retail, hospitality and farming who have little choice other than to take the price on offer, or as set (in the case of retail) by the big players who, with little constraint from governments have all but killed off the little guy.

I just wish when people speak of small business that they would actually categorize things a bit more as the price makes all too often crow about how great things are, while the price takers slip further and further behind their counterparts.
Posted by rehctub, Sunday, 28 September 2014 9:36:04 AM
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Butch, I agree with you. it is always an advantage to offer a service rather than selling commodities. The outlays are totally different. With the emphasis on service, it's surprising how many service providers like plumbers etc, fail on that score. In boom times when demand is there, if you upset a few customers with poor service you can get away with it, but when things get tough they are the first to suffer. Plus there are few, if any big players in the service industries except for banking and insurance, and they are not all that great on service anyway.
You say <<Then there's the price takers, those in retail, hospitality and farming who have little choice other than to take the price on offer, or as set (in the case of retail) by the big players who, with little constraint from governments have all but killed off the little guy. That becomes a philosophical argument, in a free market why shouldn't the big retailer kill off the small guy? I happen to believe its not in the public interest for governments to allow that to happen, but they do.
Posted by Paul1405, Monday, 29 September 2014 7:12:13 AM
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Paul, if we continue to allow the big guys to squash the little guys, we will all loose.

While some may think the likes of fruit and veggies have seen a moderate price increase over the past ten odd years, the reality is that the farmers are not making more money, it's just that if they don't get a price that covers their costs, they simply allow the crop to rot in the paddock.

If our lawmakers don't act now, I seriously doubt that we will have anything other than phone jockeys in this country in thirty years from now.

In fact, my prediction is that one in ten will have a job, they will employ another three as security guards and the remaining six will be trying to rob you.
Posted by rehctub, Monday, 29 September 2014 8:28:15 AM
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Butch, when you talk retail in this country, you talk Coles and Woolworths, the big two retailers, they have become the market, they control the market from both end, the supply price and the sell price, that gives them a huge advantage, and I must say a very profitable advantage at that. The 'Big Two" is preferable to the "Big One", I suppose, heaven help us if that was the case, just the big one 'Colesworth'. How does the government save the little guy from these monsters with their unfair tactics, things like predatory pricing etc. One answer is to encourage foreign competition into Oz the 'Aldi' types, but that ain't going to help the little guy at all, helps the consumer, but not the small retailer. There is always going to be a niche market for some, but it can't apply for all small retailers. What do you think? How about co-ops, buying groups, franchises. I'm afraid the stand alone retailer in a lot of areas of the game looks doomed, not the least in your business.

How is this one; On Saturday we went shopping, my partner "T" is partial to avocados (she used to pick them years ago back home in NZ). here in Sydney for some time avos have been retailing for about $3 each for good ones. We went to Aldi's and "T" sees avos, nice ones, she look's at the boxes and they are from NZ, in fact picked and packed by a the mob she used to work for all those years ago. They are selling for 99c each, buys 5 or 6, good. After, we went to Coles in the same shopping center, to pick up some little thing, lone behold they have the very same avocados, picked and packed by the same mob from NZ, but theirs were not 99c each, but rather $2.98 each, and people were buying them! No wonder Woolies can retail a loaf of bread for 85c.
Posted by Paul1405, Monday, 29 September 2014 10:06:33 AM
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That idea might have been right once Paul, but today, with so many of the kids who may be just about bright enough to become a plumber, going off to uni, mostly at our expense, to do arts degrees, don't expect it to last.

With so few training, you will shortly find yourself begging even the most incompetent plumber/electrician to even consider looking at your job.
Posted by Hasbeen, Monday, 29 September 2014 10:24:48 AM
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Hasbeen,the people are the backbone of the nation, I'm not going to argue that one with you. Skilled productive people are the main wealth producers. in a complex economy like ours we need academics, accountants, bankers, lawyers etc, but not to the detriment of basic productive people. like farmers and trades people, we need a sustainable balance of all types of workers. We need the butchers the bakers and the candle stick makers, I dare say we even need you! LOL.
Posted by Paul1405, Monday, 29 September 2014 11:55:54 AM
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