critter928
CGN Ultra frequent flyer
- Location
- in interesting times
Hard to believe you're wrong...right?
Possibly you never knew that the production was ramped up to 24/7 to fill demand and will go back to "normal" when demand subsides there will be cuts in staff.
I have no idea where you get some of the ideas you write, guess if become a problem if you can't just cut and paste.
There will be a demand for increased profit which will come from increased margin after ths stupdity ends as not a single company will allow their net profit to decrease if they can do something about it. Prices will not come down but you keep on your crusade they will and time will show who is wrong, oh it will be YOU.
You don't understand the economics of business as being a cop you don't have a job that "creates" anything, you get paid no matter what even if you don't perform your duty.
Your post about China and low margins is laughable, I forwarded it to some business friends and they will pee themselves over that. Proves you don't understand the economics of business and probaby never will. I have been to China, there are more filthy rich in that country than anywhere else in the world and we all know they made their millions by producing goods at low margin.
The only thing that is cheaper in China is labor, they pay world price for everything else and that is their big advantage. Wages are up in China to where more and more companies are looking at places like Vietnam for production. They are tough business people to deal with and have no intention to produce for little return on investment, just like every other company in the world.
Again I would love to see you take your "I know everything" attitude to China to do business, they would literally throw you out of their office. Live in your bubble, you honestly don't understand business.
EVERY supplier will cut production when demand drops, I know this is hard for you to grasp but try. NO supplier will be dumb enough to think if they produce 24/7 after the bubble bursts they will get all the business.
A cut in production does not mean lower prices, I know thay may be difficult to accept but it is a fact. It is obvious you have never had employment other than being a civil servant where layoffs are rare and payday always happens.
There are no freebies in business, someone paid for them.
Here is one you will probably have difficulty wrapping your brain around, you can actually produce less and make more net profit.
You should forward your "friends" this whole thread and then post the replies. It will be a good laugh.
And since you can't seem to read let alone comprehend, and like to put words in my mouth I never said, I will go back a bit for and repeat what I said;
But I guess when you are so wrapped up in an argument and stance, you fail to read what the other guy is saying, and just keeping running your mouth arguing points no one made.
So if they are selling at X dollars paying for new equipment, and running 24/7 paying OT, and still turning a profit, they will be able to still get the same profit lowering prices below X when they go back to normal production and have lower production costs.
The only way to keep the price at X with the decreased demand and even greater margins (and profit) would be to collude as a cartel and all cut production to exactly match demand, or have government step in with a supply management model.
Reality is when the demand drops they will have excess production capacity, and the ability to meet the current level of demand with lower operating costs while still producing less (no OT and no investment in new production capacity).
Therefore they can produce less, sell it at a lower price, and still make the same profit, and they will do this because of competition as if they don't their competitors have the excess capacity to do it and will undercutting them. It is simple business sense in a industry with lots of producers and excess capacity and no cartel or supply management.
No one is saying or has said they are going to continue pumping out the supply like they are now (again, I point you to my quote above), but they will not be cutting their supply to a level to maintain the current price point either.
If they choose to produce less, and try and charge the same price as now when demand drops, their competitors will simply drop their price to where they are still making the same profit as now and gain market share and sell more as unless their product is unique, the consumers will move to the brand with the lower price.
That you fail to comprehend this and are telling me you are in the business explains to me why we are in the state we are in, and why China who does this is kicking our arse.
When demand drops, in a industry with excess production capacity and plenty of competition, the price will come down (barring collusion, cartels, or supply management).
It happens in every market, in your example of the auto industry (rebates and incentives), and in your example of Chinese "widgets" (artificially low exchange rates to sell lower than the competition and flooding the market).
Bottom line, there are many competitors in the ammunition industry who will soon have excess production capacity and lower production costs (no more OT and brand new production lines) who will lower their prices to turn the same profit and maintain their market share. They will be all be competing with the one who can produce it the cheapest and still turn a profit and meet the price point that that company is willing to sell and sets.
If someone can produce it cheaper and sell more of it than their competitors, they will (and will produce as much as possible at that price point without increasing their costs - like paying OT).
Seriously, do you think they invested in new production capacity now to idle it all down in the future to try and maintain the price point?
Do you understand the concept of building market share and utilizing under used production capacity (like clever marketing of "Zombie Ammo", "Swamp People Ammo", bulk packs with free ammo cans)?
Prices are coming down, and more products and promotions will come when demand drops.
Nobody likes to run under-utilized brand new production capacity, especially when there is profit to be made (and nobody builds it unless they plan on using it). That profit is not made by cutting your own throat and producing less asking for a higher price when your competitors will produce more at a lower price point and still make a higher profit than today at a higher price.
Business 101, you should probably do yourself a favour and take some classes as your experience in the field has failed you.
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Should you get that position please let everyone know so we can dump our shares should we own any.
