"I grew up on small livestock farm shortly after World War II. When our hogs were ready for slaughter, my father would bring them to the local wholesale market, where they would be auctioned off to butchers or traders. The sheer number of farmers who brought their hogs to market, matched by the large number of butchers and traders on the “buy” side, meant that no individual buyer or seller had a direct influence on the price of the hogs. [Moi ici: Condição para a concorrência perfeita] We were at the mercy of the local cooperative, which cleared the transactions. They would tell my father the price he would receive, and thus determine how much money he could take home to our family.
The same applied to milk, which we would deliver to the local dairy. We had absolutely no influence on the price. The dairy, again part of a cooperative, told us what the price would be. The milk price would fluctuate based on supply and demand . In times of an oversupply, prices would plunge. We never had hard numbers on supply and demand, only the impressions we gained from observing the market itself. Who else delivered milk? How much did they have?
In every market my father went to, we were “price takers.” We had to accept the set price, whether we liked it or not. It was an extremely uncomfortable position. As anyone with a similar experience will attest, money is tight on a farm; these sales were our only source of income.
I absorbed all these impressions as a young boy and I must admit, I didn’t like them. Decades later, I would explain in interviews that these lessons taught me something which has guided me in running my own business and helping others improve theirs: never run a business in which you have no influence on the prices you charge.[Moi ici: Só possível praticando, em maior ou menor grau, a concorrência imperfeita]
Prices determine how much money you make. That much is clear.
sábado, janeiro 30, 2016
Pricing man (parte IV)
Interessante como Hermann Simon começa o seu último livro "Confessions of the Pricing Man: How Price Affects Everything":