We all know consumer products are priced too high thought so why are we complaining? We need lower prices to move product and create more customer base.
None of us are huge manufacturers. Low prices are actually worse for larger manufacturers than small ones. They can’t pivot into other areas as easily and have massive amounts of debt and expenses. They’re going to fall. Then prices will dip again as large amounts from this overstocked companies hit the market and it happens all over again.
Stay small for now. Smaller manufacturers usually win when prices fall as long as they can ride it out and still pay rent. Dont take on debt right now. Tighten up and ride it out til spring. Dont fold up shop. Dont despair. We all knew this was coming.
I completely disagree. Economy of scale works solidly against the little guys. As a larger outfit we were able to run hard and fast and buy better efficiency than the little guys. Not to mention pricing power. When ops arent profitable you just turn off the lights and close the door. Plenty of inventory stacked to keep pressuring the market until the little guys move on.
Where I agree with you is in not taking on debt but thats more of a life philosophy than just canna investment advice. Then again big guys like mile high got paid by taking on the debt. Its the investor who will be the greater fool as usual.
Economies of scale just is not about growth. Economies of scale also destroys big guys.
In fact i’m not sure if he knew what he was talking about but the word is called “diseconomies of scale.”
This happens everyday in oil and gas. Billions are done in small shops. You might have your whales but there are so many valorizations. Nobody can be the one.
That’s just the thing… There must be equilibrium for any structure to work, no matter how profitable the Large companies are there MUST be! Small companies for it to work, the trick is finding your own little piece of the pie. There are multiple ways u could ride this out. #1 Form an alliance with other small firms and work more efficiently sharing ideas, clients, cost & profit. #2 Establish Strenght/Weakness among you
And compliment each other. #3 Bring in new “interns” people who want to work not for profit but for your knowledge and expertise… Let them do the dirty work, let them hit every corner and sling that shit from their cars if that’s what it take to make it… Bring in people with SOO Much Hunger in their eyes…
Get that products from farms who have no choice… Cus they are stuck with wet plant… Dry that babies even in your living room… Common people.!
I admire your enthusiasm but some fights are unwinnable. Pyhrric victory is no victory at all. There are examples all around us to show David rarely defeats Goliath.
I’ve been trading markets professionally for 30+ years. Anyone who hasn’t planned for a significant market price drop will be washed out. At the same time all the farmers who bought magic beans are facing ugly truths failed crops and/or low yield material. Expect 6 months of severe market adjustments, bankruptcies and desperate sales of very questionable product.
