DID YA HEAR? 80% of the over 250K crowd is "Small Business"!

[KittenKoder]

Someone finally gets it....
An economic policy of punishment is doomed from the beginning because by punishing the top 5% you are restricting economic growth for everyone.

in general, i believe Demand comes before Supply....i don't believe in supply side economics, for the most part...

if there were no workers out there making the money to buy the widgets, there would be no business to make widgets.

this is not a one way street....

really?
well, you will see it soon enough
the shit Obama is doing will be passed on

Although Obama is in no way going to be helping much (more likely he will hurt business) Care did make a great point. Without the demand there would be no business at all, unless people really like wasting money on producing things that are not wanted or needed. The flaw is that luxury items are not really changing in price except by the normal effects of the economy while products and services which are needed keep going up faster. But that's another topic.

 

[DiveCon]

in general, i believe Demand comes before Supply....i don't believe in supply side economics, for the most part...

if there were no workers out there making the money to buy the widgets, there would be no business to make widgets.

this is not a one way street....

really?
well, you will see it soon enough
the shit Obama is doing will be passed on

Although Obama is in no way going to be helping much (more likely he will hurt business) Care did make a great point. Without the demand there would be no business at all, unless people really like wasting money on producing things that are not wanted or needed. The flaw is that luxury items are not really changing in price except by the normal effects of the economy while products and services which are needed keep going up faster. But that's another topic.

true, but if you raise the cost of doing business, those costs get passed on into the price of the product
thats very plain and simple economics

 

[Tech_Esq]

in general, i believe Demand comes before Supply....i don't believe in supply side economics, for the most part...

if there were no workers out there making the money to buy the widgets, there would be no business to make widgets.

this is not a one way street....

really?
well, you will see it soon enough
the shit Obama is doing will be passed on

Although Obama is in no way going to be helping much (more likely he will hurt business) Care did make a great point. Without the demand there would be no business at all, unless people really like wasting money on producing things that are not wanted or needed. The flaw is that luxury items are not really changing in price except by the normal effects of the economy while products and services which are needed keep going up faster. But that's another topic.

The trouble with the demand side argument is that it assumes supply. You assume that just because you have money and want something that it is available for you to buy. This is a uniquely American view. We have everything available to us here so it is impossible for us to envision desiring something and having the money for it, but it not being available for us to purchase. This is everyday in many places in the world.

Why is that life everyday in some places? Because there is no supply, either because of the lack of foreign trade, the lack of transportation and/or the lack of domestic production, the people are deprived of goods they and and would purchase.

Why is that? Looking just at the domestic front, because capital formation is retarded by government policy or instability. Either of which will prevent capital formation. What does that mean? It means people who have the money are not willing to put it at risk in the environment that has the demand.

Let's look at Somalia as an extreme example that makes the point. Would you invest your life savings to create a business in Somalia? Hell no you wouldn't, provided you are in possession of your faculties. The reason is that the country is too unstable. There may be plenty of demand, but what difference does that make if you aren't sure you could profit from it? What would I with all this money instead? I would invest it in an overseas market or set up a business in a foreign country that has a good environment for business.

 

[Care4all]

Someone finally gets it....
An economic policy of punishment is doomed from the beginning because by punishing the top 5% you are restricting economic growth for everyone.

in general, i believe Demand comes before Supply....i don't believe in supply side economics, for the most part...

if there were no workers out there making the money to buy the widgets, there would be no business to make widgets.

this is not a one way street....

really?
well, you will see it soon enough
the shit Obama is doing will be passed on

Yes, it is very hard for me, as a Retail and Whole Sale Buyer for 15 years, before getting in to Product/Development/Marketing for nearing another decade, it is very hard for me to accept supply side economics, because this is NOT how it works with buyers in retail.

We read the markets on what to buy by several means, some of it is just "gut", where you see the market going, based on what you saw coming out of europe's runways and how it translated in to fashion in America, where colors will be, what percentages of your buys should be in those colors, and so on and so forth....

but most ALL OF THIS is determined by very in depth analysis of Demand, or actual sales of the various categories you analyze at the end of the season, preparing yourself to cover at least, last year's sales if it sold well, in to this year's purchases, or this year's "demand" for the product.

Sometimes you venture out and buy something that is so new, you have no true read on that item or category as far as the previous demand for it....but being in the usa, and slower...about a year behind Europes Fashion market, as buyers you can get a read on the item from the sales Europe is showing on it....how quickly the item was "turning"....selling.

Also, we would never buy an item that had no history of demand or sales, and spread it out to all stores without buying it small and testing its salability in a few stores that were different in nature, that gave us a read on how all of our stores would do with it...before spending the money blindly and buying this item for all stores at once without having the proper read on what the customer's demand for this product will be.

Sooooo, DEMAND, DEMAND, DEMAND....my entire life, my entire career in business, DROVE THE BUSINESS....supply came to meet that demand Dive....so yes, i don't believe in supply side economics.

 

[KittenKoder]

really?
well, you will see it soon enough
the shit Obama is doing will be passed on

Although Obama is in no way going to be helping much (more likely he will hurt business) Care did make a great point. Without the demand there would be no business at all, unless people really like wasting money on producing things that are not wanted or needed. The flaw is that luxury items are not really changing in price except by the normal effects of the economy while products and services which are needed keep going up faster. But that's another topic.

true, but if you raise the cost of doing business, those costs get passed on into the price of the product
thats very plain and simple economics

This is why I can't stand the Democrats approach to business, most fail to see that.

 

[Tech_Esq]

in general, i believe Demand comes before Supply....i don't believe in supply side economics, for the most part...

if there were no workers out there making the money to buy the widgets, there would be no business to make widgets.

this is not a one way street....

really?
well, you will see it soon enough
the shit Obama is doing will be passed on

Yes, it is very hard for me, as a Retail and Whole Sale Buyer for 15 years, before getting in to Product/Development/Marketing for nearing another decade, it is very hard for me to accept supply side economics, because this is NOT how it works with buyers in retail.

We read the markets on what to buy by several means, some of it is just "gut", where you see the market going, based on what you saw coming out of europe's runways and how it translated in to fashion in America, where colors will be, what percentages of your buys should be in those colors, and so on and so forth....

but most ALL OF THIS is determined by very in depth analysis of Demand, or actual sales of the various categories you analyze at the end of the season, preparing yourself to cover at least, last year's sales if it sold well, in to this year's purchases, or this year's "demand" for the product.

Sometimes you venture out and buy something that is so new, you have no true read on that item or category as far as the previous demand for it....but being in the usa, and slower...about a year behind Europes Fashion market, as buyers you can get a read on the item from the sales Europe is showing on it....how quickly the item was "turning"....selling.

Also, we would never buy an item that had no history of demand or sales, and spread it out to all stores without buying it small and testing its salability in a few stores that were different in nature, that gave us a read on how all of our stores would do with it...before spending the money blindly and buying this item for all stores at once without having the proper read on what the customer's demand for this product will be.

Sooooo, DEMAND, DEMAND, DEMAND....my entire life, my entire career in business, DROVE THE BUSINESS....supply came to meet that demand Dive....so yes, i don't believe in supply side economics.

This once again proves my point. It assumes supply. What if there was nothing to buy Care? Where would your business be then?

 

[KittenKoder]

really?
well, you will see it soon enough
the shit Obama is doing will be passed on

Although Obama is in no way going to be helping much (more likely he will hurt business) Care did make a great point. Without the demand there would be no business at all, unless people really like wasting money on producing things that are not wanted or needed. The flaw is that luxury items are not really changing in price except by the normal effects of the economy while products and services which are needed keep going up faster. But that's another topic.

The trouble with the demand side argument is that it assumes supply. You assume that just because you have money and want something that it is available for you to buy. This is a uniquely American view. We have everything available to us here so it is impossible for us to envision desiring something and having the money for it, but it not being available for us to purchase. This is everyday in many places in the world.

Why is that life everyday in some places? Because there is no supply, either because of the lack of foreign trade, the lack of transportation and/or the lack of domestic production, the people are deprived of goods they and and would purchase.

Why is that? Looking just at the domestic front, because capital formation is retarded by government policy or instability. Either of which will prevent capital formation. What does that mean? It means people who have the money are not willing to put it at risk in the environment that has the demand.

Let's look at Somalia as an extreme example that makes the point. Would you invest your life savings to create a business in Somalia? Hell no you wouldn't, provided you are in possession of your faculties. The reason is that the country is too unstable. There may be plenty of demand, but what difference does that make if you aren't sure you could profit from it? What would I with all this money instead? I would invest it in an overseas market or set up a business in a foreign country that has a good environment for business.

Tech, I make a living on fulfilling demand ... without demand I wouldn't be able to make any money. I could offer the supply of my services until blue in the face, but if no one wants or needs them ... I have no way to make profits. Same holds true of all products. The most successful businesses find a demand that hasn't been filled or has been filled poorly then create a supply or better supply. Bill Gates and Steven Jobs business models were like that as well, they created something that there was a demand for, even though most people didn't know about it at the time, they saw a possibility of that demand rising, so they filled the smaller demand until it became bigger, now they are rich. Try to think of any one product that would "create" it's own demand? Just one.

 

[KittenKoder]

Also, most businesses that fail it's because there is no demand for their products or services, either because of a better supply or that the supply is simply not needed.

 

[Care4all]

really?
well, you will see it soon enough
the shit Obama is doing will be passed on

Yes, it is very hard for me, as a Retail and Whole Sale Buyer for 15 years, before getting in to Product/Development/Marketing for nearing another decade, it is very hard for me to accept supply side economics, because this is NOT how it works with buyers in retail.

We read the markets on what to buy by several means, some of it is just "gut", where you see the market going, based on what you saw coming out of europe's runways and how it translated in to fashion in America, where colors will be, what percentages of your buys should be in those colors, and so on and so forth....

but most ALL OF THIS is determined by very in depth analysis of Demand, or actual sales of the various categories you analyze at the end of the season, preparing yourself to cover at least, last year's sales if it sold well, in to this year's purchases, or this year's "demand" for the product.

Sometimes you venture out and buy something that is so new, you have no true read on that item or category as far as the previous demand for it....but being in the usa, and slower...about a year behind Europes Fashion market, as buyers you can get a read on the item from the sales Europe is showing on it....how quickly the item was "turning"....selling.

Also, we would never buy an item that had no history of demand or sales, and spread it out to all stores without buying it small and testing its salability in a few stores that were different in nature, that gave us a read on how all of our stores would do with it...before spending the money blindly and buying this item for all stores at once without having the proper read on what the customer's demand for this product will be.

Sooooo, DEMAND, DEMAND, DEMAND....my entire life, my entire career in business, DROVE THE BUSINESS....supply came to meet that demand Dive....so yes, i don't believe in supply side economics.

This once again proves my point. It assumes supply. What if there was nothing to buy Care? Where would your business be then?

I would not know what to buy or what to supply the customers with, without having a read on their demand....your supply may be low for that demand, so then you beef it up or supplement it with similar products, or your supply may be too high for that demand and then you liquidate it with costly to profit, mark downs....

There has to be demand for the product, before any business person in the world, would put all his money in to supply.... honestly, this is how it works....

And yes, of course there has to be capital to fund the supply for the demand, but with a good business model, with the testing of the marketplace on the product's demand, you can find funding through your bank or through smart business men with money to spare, or start really small with your supply until it pays for itself to meet the rest of the demand....

regardless, the demand has to be there....this is the rule, at least in being a Buyer for a Corporation.

 

[Tech_Esq]

Although Obama is in no way going to be helping much (more likely he will hurt business) Care did make a great point. Without the demand there would be no business at all, unless people really like wasting money on producing things that are not wanted or needed. The flaw is that luxury items are not really changing in price except by the normal effects of the economy while products and services which are needed keep going up faster. But that's another topic.

The trouble with the demand side argument is that it assumes supply. You assume that just because you have money and want something that it is available for you to buy. This is a uniquely American view. We have everything available to us here so it is impossible for us to envision desiring something and having the money for it, but it not being available for us to purchase. This is everyday in many places in the world.

Why is that life everyday in some places? Because there is no supply, either because of the lack of foreign trade, the lack of transportation and/or the lack of domestic production, the people are deprived of goods they and and would purchase.

Why is that? Looking just at the domestic front, because capital formation is retarded by government policy or instability. Either of which will prevent capital formation. What does that mean? It means people who have the money are not willing to put it at risk in the environment that has the demand.

Let's look at Somalia as an extreme example that makes the point. Would you invest your life savings to create a business in Somalia? Hell no you wouldn't, provided you are in possession of your faculties. The reason is that the country is too unstable. There may be plenty of demand, but what difference does that make if you aren't sure you could profit from it? What would I with all this money instead? I would invest it in an overseas market or set up a business in a foreign country that has a good environment for business.

Tech, I make a living on fulfilling demand ... without demand I wouldn't be able to make any money. I could offer the supply of my services until blue in the face, but if no one wants or needs them ... I have no way to make profits. Same holds true of all products. The most successful businesses find a demand that hasn't been filled or has been filled poorly then create a supply or better supply. Bill Gates and Steven Jobs business models were like that as well, they created something that there was a demand for, even though most people didn't know about it at the time, they saw a possibility of that demand rising, so they filled the smaller demand until it became bigger, now they are rich. Try to think of any one product that would "create" it's own demand? Just one.

Unless you are in Government, I would expect everyone that is in business fill some sort of demand need, but I think you miss my point.

You bring up Jobs and Gates. They are an example of what you say doesn't exist. I don't know how old you are, but in the late 1970s when Jobs and Wazniak were fooling around creating kits with wood and circuit boards and selling them to hobbyists to make personal computers, there was no demand for a PC. In fact, for the next 7 years after that, the general opinion of the average home owner was, "What in the hell would I do with a computer in my house?" I'd say we're in a different place now.

But that is not really the point of supply-side economics. The point of supply side econ is to ease the restrictions on capital formation to make it easier and thus more likely for people to use their capital (money) to create businesses. Hopefully, that business is filling some slice of demand (or it will fail).

Supply-side economics doesn't mean I create a banana slicer even though nobody wants a banana slicer and try to force it on the market. It just means easing regulations that might inhibit people from starting businesses, increasing the likelihood that people will use their money for venture capital, increasing the likelihood that banks will lend money, reducing the price of money (interest rates), maybe even providing tax incentives for people to create businesses. (If you really want to go all out).

That way, you have a multiplier effect on the money that Congress spends. All of the people that put their money at risk because the government did (by forgoing taxes) adds to the money spent by government. Then, because businesses are being created, people are being hired to work in these new jobs. They start earning money and paying taxes and the tide rises. That is supply-side economics.

 

[DiveCon]

Also, most businesses that fail it's because there is no demand for their products or services, either because of a better supply or that the supply is simply not needed.

and if the costs of you doing your business increase, you must pass that on to the price of your product
if that amount is more than the market will bear, then you go out of business
now, where are those taxes coming from?

 

[Tech_Esq]

Yes, it is very hard for me, as a Retail and Whole Sale Buyer for 15 years, before getting in to Product/Development/Marketing for nearing another decade, it is very hard for me to accept supply side economics, because this is NOT how it works with buyers in retail.

We read the markets on what to buy by several means, some of it is just "gut", where you see the market going, based on what you saw coming out of europe's runways and how it translated in to fashion in America, where colors will be, what percentages of your buys should be in those colors, and so on and so forth....

but most ALL OF THIS is determined by very in depth analysis of Demand, or actual sales of the various categories you analyze at the end of the season, preparing yourself to cover at least, last year's sales if it sold well, in to this year's purchases, or this year's "demand" for the product.

Sometimes you venture out and buy something that is so new, you have no true read on that item or category as far as the previous demand for it....but being in the usa, and slower...about a year behind Europes Fashion market, as buyers you can get a read on the item from the sales Europe is showing on it....how quickly the item was "turning"....selling.

Also, we would never buy an item that had no history of demand or sales, and spread it out to all stores without buying it small and testing its salability in a few stores that were different in nature, that gave us a read on how all of our stores would do with it...before spending the money blindly and buying this item for all stores at once without having the proper read on what the customer's demand for this product will be.

Sooooo, DEMAND, DEMAND, DEMAND....my entire life, my entire career in business, DROVE THE BUSINESS....supply came to meet that demand Dive....so yes, i don't believe in supply side economics.

This once again proves my point. It assumes supply. What if there was nothing to buy Care? Where would your business be then?

I would not know what to buy or what to supply the customers with, without having a read on their demand....your supply may be low for that demand, so then you beef it up or supplement it with similar products, or your supply may be too high for that demand and then you liquidate it with costly to profit, mark downs....

There has to be demand for the product, before any business person in the world, would put all his money in to supply.... honestly, this is how it works....

And yes, of course there has to be capital to fund the supply for the demand, but with a good business model, with the testing of the marketplace on the product's demand, you can find funding through your bank or through smart business men with money to spare, or start really small with your supply until it pays for itself to meet the rest of the demand....

regardless, the demand has to be there....this is the rule, at least in being a Buyer for a Corporation.

I think we are still talking past each other. Read my response to Kitten and see if we get any closer.

 

[DiveCon]

The trouble with the demand side argument is that it assumes supply. You assume that just because you have money and want something that it is available for you to buy. This is a uniquely American view. We have everything available to us here so it is impossible for us to envision desiring something and having the money for it, but it not being available for us to purchase. This is everyday in many places in the world.

Why is that life everyday in some places? Because there is no supply, either because of the lack of foreign trade, the lack of transportation and/or the lack of domestic production, the people are deprived of goods they and and would purchase.

Why is that? Looking just at the domestic front, because capital formation is retarded by government policy or instability. Either of which will prevent capital formation. What does that mean? It means people who have the money are not willing to put it at risk in the environment that has the demand.

Let's look at Somalia as an extreme example that makes the point. Would you invest your life savings to create a business in Somalia? Hell no you wouldn't, provided you are in possession of your faculties. The reason is that the country is too unstable. There may be plenty of demand, but what difference does that make if you aren't sure you could profit from it? What would I with all this money instead? I would invest it in an overseas market or set up a business in a foreign country that has a good environment for business.

Tech, I make a living on fulfilling demand ... without demand I wouldn't be able to make any money. I could offer the supply of my services until blue in the face, but if no one wants or needs them ... I have no way to make profits. Same holds true of all products. The most successful businesses find a demand that hasn't been filled or has been filled poorly then create a supply or better supply. Bill Gates and Steven Jobs business models were like that as well, they created something that there was a demand for, even though most people didn't know about it at the time, they saw a possibility of that demand rising, so they filled the smaller demand until it became bigger, now they are rich. Try to think of any one product that would "create" it's own demand? Just one.

Unless you are in Government, I would expect everyone that is in business fill some sort of demand need, but I think you miss my point.

You bring up Jobs and Gates. They are an example of what you say doesn't exist. I don't know how old you are, but in the late 1970s when Jobs and Wazniak were fooling around creating kits with wood and circuit boards and selling them to hobbyists to make personal computers, there was no demand for a PC. In fact, for the next 7 years after that, the general opinion of the average home owner was, "What in the hell would I do with a computer in my house?" I'd say we're in a different place now.

But that is not really the point of supply-side economics. The point of supply side econ is to ease the restrictions on capital formation to make it easier and thus more likely for people to use their capital (money) to create businesses. Hopefully, that business is filling some slice of demand (or it will fail).

Supply-side economics doesn't mean I create a banana slicer even though nobody wants a banana slicer and try to force it on the market. It just means easing regulations that might inhibit people from starting businesses, increasing the likelihood that people will use their money for venture capital, increasing the likelihood that banks will lend money, reducing the price of money (interest rates), maybe even providing tax incentives for people to create businesses. (If you really want to go all out).

That way, you have a multiplier effect on the money that Congress spends. All of the people that put their money at risk because the government did (by forgoing taxes) adds to the money spent by government. Then, because businesses are being created, people are being hired to work in these new jobs. They start earning money and paying taxes and the tide rises. That is supply-side economics.

what care is not taking into consideration is if her costs to supply that demand go up, she MUST pass that cost increase on to her customers of lose money
if the cost is too much for the market, no one can buy her goods, thus even though the demand is there, the cost is too high for people to afford

 

[DiveCon]

Yes, it is very hard for me, as a Retail and Whole Sale Buyer for 15 years, before getting in to Product/Development/Marketing for nearing another decade, it is very hard for me to accept supply side economics, because this is NOT how it works with buyers in retail.

We read the markets on what to buy by several means, some of it is just "gut", where you see the market going, based on what you saw coming out of europe's runways and how it translated in to fashion in America, where colors will be, what percentages of your buys should be in those colors, and so on and so forth....

but most ALL OF THIS is determined by very in depth analysis of Demand, or actual sales of the various categories you analyze at the end of the season, preparing yourself to cover at least, last year's sales if it sold well, in to this year's purchases, or this year's "demand" for the product.

Sometimes you venture out and buy something that is so new, you have no true read on that item or category as far as the previous demand for it....but being in the usa, and slower...about a year behind Europes Fashion market, as buyers you can get a read on the item from the sales Europe is showing on it....how quickly the item was "turning"....selling.

Also, we would never buy an item that had no history of demand or sales, and spread it out to all stores without buying it small and testing its salability in a few stores that were different in nature, that gave us a read on how all of our stores would do with it...before spending the money blindly and buying this item for all stores at once without having the proper read on what the customer's demand for this product will be.

Sooooo, DEMAND, DEMAND, DEMAND....my entire life, my entire career in business, DROVE THE BUSINESS....supply came to meet that demand Dive....so yes, i don't believe in supply side economics.

This once again proves my point. It assumes supply. What if there was nothing to buy Care? Where would your business be then?

I would not know what to buy or what to supply the customers with, without having a read on their demand....your supply may be low for that demand, so then you beef it up or supplement it with similar products, or your supply may be too high for that demand and then you liquidate it with costly to profit, mark downs....

There has to be demand for the product, before any business person in the world, would put all his money in to supply.... honestly, this is how it works....

And yes, of course there has to be capital to fund the supply for the demand, but with a good business model, with the testing of the marketplace on the product's demand, you can find funding through your bank or through smart business men with money to spare, or start really small with your supply until it pays for itself to meet the rest of the demand....

regardless, the demand has to be there....this is the rule, at least in being a Buyer for a Corporation.

thye demand wont matter one bit if they cant afford the price you have to charge

 

[KittenKoder]

Also, most businesses that fail it's because there is no demand for their products or services, either because of a better supply or that the supply is simply not needed.

and if the costs of you doing your business increase, you must pass that on to the price of your product
if that amount is more than the market will bear, then you go out of business
now, where are those taxes coming from?

Luckily I provide services, not products, so my costs won't be effected as much, being freelance I am not considered a business ... which helps a lot as well. I could theoretically call myself a hobbyist and avoid all taxes involved from what I am paid (might do that if Obama screws with things too much) since I don't actually make enough to count above the "poverty line" for Seattle. I just have very few personal expenses as well and can live on almost nothing (I'm just good that way). However, if they raise the prices of the products I service this WILL hurt demand a lot, possibly forcing me to have to go into a company thus ruining it for me (the only reason I do this work is because I CAN do it freelance and make a profit). So it will effect me indirectly (I hate working for big corporations).

 

[DiveCon]

Also, most businesses that fail it's because there is no demand for their products or services, either because of a better supply or that the supply is simply not needed.

and if the costs of you doing your business increase, you must pass that on to the price of your product
if that amount is more than the market will bear, then you go out of business
now, where are those taxes coming from?

Luckily I provide services, not products, so my costs won't be effected as much, being freelance I am not considered a business ... which helps a lot as well. I could theoretically call myself a hobbyist and avoid all taxes involved from what I am paid (might do that if Obama screws with things too much) since I don't actually make enough to count above the "poverty line" for Seattle. I just have very few personal expenses as well and can live on almost nothing (I'm just good that way). However, if they raise the prices of the products I service this WILL hurt demand a lot, possibly forcing me to have to go into a company thus ruining it for me (the only reason I do this work is because I CAN do it freelance and make a profit). So it will effect me indirectly (I hate working for big corporations).

i totally understand
but that is the basis of supply side
and care doesnt seem to get it
if you keep the supply side profitable, the demand side bennefits from lower costs in most cases

 

[KittenKoder]

and if the costs of you doing your business increase, you must pass that on to the price of your product
if that amount is more than the market will bear, then you go out of business
now, where are those taxes coming from?

Luckily I provide services, not products, so my costs won't be effected as much, being freelance I am not considered a business ... which helps a lot as well. I could theoretically call myself a hobbyist and avoid all taxes involved from what I am paid (might do that if Obama screws with things too much) since I don't actually make enough to count above the "poverty line" for Seattle. I just have very few personal expenses as well and can live on almost nothing (I'm just good that way). However, if they raise the prices of the products I service this WILL hurt demand a lot, possibly forcing me to have to go into a company thus ruining it for me (the only reason I do this work is because I CAN do it freelance and make a profit). So it will effect me indirectly (I hate working for big corporations).

i totally understand
but that is the basis of supply side
and care doesnt seem to get it
if you keep the supply side profitable, the demand side bennefits from lower costs in most cases

Well ... but both sides are oversimplified. While the demand side can be effected by the supply costs and availability, without the initial demand there would be no way to sell the supply. Techs biggest flaw is in assuming that ALL demand is need, while much of it is actually want. If everyone suddenly decided they didn't want it, there would be no profit to the supplier. Such as my case, if the cost of the hardware became too high then most small businesses would just do without, it wouldn't hurt the businesses but would indirectly force my hand (whether suffer and wait it out or go to a major corporation). A great example of how the loss of demand will hurt supply even more (though it does support your side as well) is for the gaming industry.

The demand for games came from hobbyists (talking old school not v-games). Originally the cost for publishing games was very low, at first the selection was very low (only a couple) but the gamers kept demanding more, we just wanted options. Eventually the market was flooded with a lot of games. Most made almost no profits and were eventually taken off the market because no one wanted them. But several survived ... until the prices went up too high. Most people just stopped buying them at that point. The costs went up because the publishing companies wanted to try to make a bigger profit, which caused many of them to go under instead because no one wanted to pay that much. A few games went to other companies and survive because these companies sell them at rather low costs (with a few exceptions like D&D which survives only because of it's pop-culture style fan-base). The demand however stays low because of v-games which has a higher demand.

 

[DiveCon]

Luckily I provide services, not products, so my costs won't be effected as much, being freelance I am not considered a business ... which helps a lot as well. I could theoretically call myself a hobbyist and avoid all taxes involved from what I am paid (might do that if Obama screws with things too much) since I don't actually make enough to count above the "poverty line" for Seattle. I just have very few personal expenses as well and can live on almost nothing (I'm just good that way). However, if they raise the prices of the products I service this WILL hurt demand a lot, possibly forcing me to have to go into a company thus ruining it for me (the only reason I do this work is because I CAN do it freelance and make a profit). So it will effect me indirectly (I hate working for big corporations).

i totally understand
but that is the basis of supply side
and care doesnt seem to get it
if you keep the supply side profitable, the demand side bennefits from lower costs in most cases

Well ... but both sides are oversimplified. While the demand side can be effected by the supply costs and availability, without the initial demand there would be no way to sell the supply. Techs biggest flaw is in assuming that ALL demand is need, while much of it is actually want. If everyone suddenly decided they didn't want it, there would be no profit to the supplier. Such as my case, if the cost of the hardware became too high then most small businesses would just do without, it wouldn't hurt the businesses but would indirectly force my hand (whether suffer and wait it out or go to a major corporation). A great example of how the loss of demand will hurt supply even more (though it does support your side as well) is for the gaming industry.

The demand for games came from hobbyists (talking old school not v-games). Originally the cost for publishing games was very low, at first the selection was very low (only a couple) but the gamers kept demanding more, we just wanted options. Eventually the market was flooded with a lot of games. Most made almost no profits and were eventually taken off the market because no one wanted them. But several survived ... until the prices went up too high. Most people just stopped buying them at that point. The costs went up because the publishing companies wanted to try to make a bigger profit, which caused many of them to go under instead because no one wanted to pay that much. A few games went to other companies and survive because these companies sell them at rather low costs (with a few exceptions like D&D which survives only because of it's pop-culture style fan-base). The demand however stays low because of v-games which has a higher demand.

yup, i know what you are saying
by trying to get too much profit, they priced themselves out of business
the same thing can be done with taxes

 

[Care4all]

This once again proves my point. It assumes supply. What if there was nothing to buy Care? Where would your business be then?

I would not know what to buy or what to supply the customers with, without having a read on their demand....your supply may be low for that demand, so then you beef it up or supplement it with similar products, or your supply may be too high for that demand and then you liquidate it with costly to profit, mark downs....

There has to be demand for the product, before any business person in the world, would put all his money in to supply.... honestly, this is how it works....

And yes, of course there has to be capital to fund the supply for the demand, but with a good business model, with the testing of the marketplace on the product's demand, you can find funding through your bank or through smart business men with money to spare, or start really small with your supply until it pays for itself to meet the rest of the demand....

regardless, the demand has to be there....this is the rule, at least in being a Buyer for a Corporation.

thye demand wont matter one bit if they cant afford the price you have to charge

As a Buyer, price is always a calculation in the demand....

What did you sell it for last year, what will they pay for it this year...if your costs go up and demand was healthy prior to such, then you calculate this in to your purchase for this year's demand and buy less, but sell something more of another item that you misjudged demand and it is higher than you expected.

Also, if the previous years demand for the product was so great, and the price of the product this year was going to have to retail for $10 bucks more than last year for the same product because your cost of goods went up or taxes or duties went up or there was a shortage in one of the materials in the product or freight costs went up drastically because of gasoline prices rising or any number of reasons the same product costs more this year than last year.....instead of taking the buying less of that product because the demand will be reduced with the retail at $10 bucks more, OR YOU CAN TAKE THE APPROACH to buy the hell out of it, double what you bought last year and promote it barely above margin on it's sale price and get your return on investment and profits through mass selling it, at the lower margin.

Basically Dive, no one is boxed in...even if prices rise on one of your products.

If it rises on all of your products, then it rises on all of your competitor's products as well, so if it had a demand before, it will still have a demand afterwards...

I went through a leather crisis once, back in the 80's...when leather couches and leather chairs made their way back in to fashion and most every home in America....i bought women's shoes, the prices of all of our shoes for women went from about 29 bucks on average to $39 bucks on average from one season to the next.....we, the business, prepared for the worst.....there was no way women would pay 30% more for their footwear from one season to the next....this was super inflation....no way would it be accepted, so we bought low...we still would meet sales plan because each shoe would be selling for a higher price so this actually kept our salesplan flat....but with less items actually being sold.

Talk about being caught with our pants down....the consumer couldn't give a hoot about the 30% hike and we ran short on inventory and had to scrample to place more purchases to fill the demand.

Demand is a strange thing....those that can read it, will be your success stories in business, because they will have the right amount of supply bought to serve the demand appropriately and profitably.

Demand comes first then supply or projected demand, then supply.

I AM NOT SAYING supply is not important, it is very important, but the demand is what drives the proper supply....for any business....we projected our salesplan, down to the item, translating such in to a dollar figure of what was needed in inventory, in the supply.

Care

 

[KittenKoder]

i totally understand
but that is the basis of supply side
and care doesnt seem to get it
if you keep the supply side profitable, the demand side bennefits from lower costs in most cases

Well ... but both sides are oversimplified. While the demand side can be effected by the supply costs and availability, without the initial demand there would be no way to sell the supply. Techs biggest flaw is in assuming that ALL demand is need, while much of it is actually want. If everyone suddenly decided they didn't want it, there would be no profit to the supplier. Such as my case, if the cost of the hardware became too high then most small businesses would just do without, it wouldn't hurt the businesses but would indirectly force my hand (whether suffer and wait it out or go to a major corporation). A great example of how the loss of demand will hurt supply even more (though it does support your side as well) is for the gaming industry.

The demand for games came from hobbyists (talking old school not v-games). Originally the cost for publishing games was very low, at first the selection was very low (only a couple) but the gamers kept demanding more, we just wanted options. Eventually the market was flooded with a lot of games. Most made almost no profits and were eventually taken off the market because no one wanted them. But several survived ... until the prices went up too high. Most people just stopped buying them at that point. The costs went up because the publishing companies wanted to try to make a bigger profit, which caused many of them to go under instead because no one wanted to pay that much. A few games went to other companies and survive because these companies sell them at rather low costs (with a few exceptions like D&D which survives only because of it's pop-culture style fan-base). The demand however stays low because of v-games which has a higher demand.

yup, i know what you are saying
by trying to get too much profit, they priced themselves out of business
the same thing can be done with taxes

Yep. I think the only smart thing he did was the CEO pay cap for those who collect from the bailout, however I am not sure if he did that the right way since I didn't read it fully. But increasing their taxes won't help at all, it will likely hurt everyone in the long run, since they would also have to raise the prices to cover the new taxes.