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by ska 920 days ago
It's not really arbitrary. Some of the underlying costs really are driven by things completely outside of your control (e.g. interest rates knock on effects).

So if your COGS are shifting you have to respond to that, but in most cases price variability is going to cause you problems (e.g. you aren't a financial market, you are selling goods) and your competitors movements are also, so you are trying to strike a balance. And maybe you are bit greedy and see an opportunity in the variability to end user, but maybe you are more worried about collapsing margin.
1 comments
dpflan 920 days ago
I really appreciate your comments and insight, but I must stress again, what has been noted by both of us:

> And maybe you are bit greedy and see an opportunity in the variability to end user, but maybe you are more worried about collapsing margin.

"And maybe you are bit greedy" -- https://www.cbsnews.com/news/retail-price-gouging-lowes-amaz....

And this "profit" is a number derived from an price that is set to attain some difference that is "allowed by the market". Greed is baked in always, else a business cannot continue; but the smoke-screen of inflation is what is discomforting.

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ska 920 days ago
And I'm saying it's not really a smoke-screen, but rather it is what happens whenever there is high variability. Note that I included both greed & fear in the mix.

I guess I'm objecting to "arbitrary" rather than "how markets work".

I think we are both agreeing that there are parts of e.g. consumer grocery store prices that are inherently inflation driven (and unlikely to go down) and parts that may be opportunistic or defensive (and might) but the key think is literally nobody actually knows how to separate that cleanly. There is some hope that competition will drive out some of the additional price increase over time relative to actual value, but usually the way this happens is by letting inflation eat it, not actually re-pricing lower. We will see, but until then we'll see reports like you've linked, and others claiming otherwise, and not really know until the dust settles.

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