[culi]

That's true, grocery stores made record profits during covid.

I've sometimes toyed with the idea of an "open sourced" grocery store that's extremely transparent about every detail. Think electronic price tags that give you a complete breakdown of the cost of an item, cost of labor, cost to account for "loss", over/under-supply, etc.

I feel like there's a niche out there for hyperinformed consumers

[Hilliard_Ohiooo]

That's basically Costco, the price they pay is what you pay, the system paired down to bare necessities, and it is incredibly popular.

[the_sleaze_]

Costco mandates a maximum of 11% margin on goods in the store and aggressively monitor suppliers on that cost.

One of the reasons I like costco actually 10% or so is a fine margin to pay.

[spockz]

That is actually quite nice. I’ve been toying with the idea of mandating this 10% maximum margin for products and services on every for-profit company.

Trouble is, how do you prevent them making stacks of companies compounding the 10% profits. And is 10% sufficient to build up a buffer for when hard times hit?

This thinking has been triggered by fuel producers and sellers making sky rocket profits because of the increased oil prices. The same as the overheated graphics cards.

[tekne]

You hit on what, in my opinion, is the actual core issue with this type of thinking -- it doesn't compose.

To make a poor analogy to physics: if you measure something which changes when you change unit/frame of reference -- it's not a well-defined thing.

The best policies have the same effect regardless of the legal structure (within the policy) superimposed on the actual action.

Medium policies can be optimized/gamed (perspective) -- but are designed to be adversarial, in that the gamed outcome is at least OK but potentially in fact the desired one (for example -- if you tax land, then not paying the tax means not using up land, which may be a desired policy goal). These can cause issues, though -- common law is an adversarial system, and "justice" can usually be translated to "access to lawyers," imo.

The connection with the above is that while the solution used is probably not universal -- sometimes, the optimal solution is, so the adversarial policy is just an approximation of "good policy".

Bad policies not only don't compose -- but then bureaucrats go on and insert discretion to try to make them compose. On the surface, this often looks like common sense -- but the result is insiders can keep doing the Bad Thing, but you can't do anything which isn't the Way Things Are Done -- because you need approval, and it Looks Bad.

/rant

[spockz]

So, how would we go about defining policies that prevent “excessive” profits while still allowing for building buffers in risky and capex heavy industry?

More heavily tax profit above a certain level? Allows for funnelling back some of the excessive profits. Suffers from the same tax evasion as we currently have where profits are skewed on the books with all kinds of accounting tricks.

Demanding sales prices cannot exceed cost + 10% of cost? In aggregate or per unit?

[miki123211]

This is a bad idea if your industry is CapEx heavy and you have a lot of bets that don't pay off.

The drug industry is like this; the profits on a single drug sale are insane, even counting the R&D costs for that particular drug. However, those profits are offset by the losses incurred on all the other drug ideas that hadn't panned out despite the hundreds of millions of dollars invested in them.

The record and publishing industries are similar. As Steve Jobs once said, the main job of a music label isn't selling records, it's not even marketing or promotion, it's identifying artists with potential to be great hits amongst the thousands of wannabes. The revenue that labels get, and it's a lot of revenue, mostly goes towards recouping the costs of failed bets.

[the_sleaze_]

Absolutely and costco has other interesting business model mechanics that make that margin feasible. Membership fees of course but other things as well. Like the fact they are all warehouses they don't have intermediate warehousing or unpacking like say Target does.

[culi]

The transparency just isn't there. I would love to see a reasonably complete breakdown of the final cost of every item

[tesseract]

That's pretty much what a food co-op is supposed to be.

[culi]

Yeah food co-ops are awesome but they don't expose that kind of information to the casual shopper. Even most members. Even if you're very actively involved you'd have to strap together multiple spreadsheets and receipts to come up with something like I'm describing

I guess I'm thinking of something like dynamic pricing, except instead of it being used to manipulate consumers into paying the most they can possibly pay, it's used to give you really transparent, real-time information about what goes into that final pricetag

[BizarroLand]

My local co-op is stupid expensive, like $8 for a box of cereal that costs $4 at my normal grocery store, $7 for a dozen eggs, $8 butter, $8/lb chicken thighs.

There are non-coop but organic and "fancy" grocery stores in the area as well that decimate them on prices.

Admittedly, these items are all very high quality, organic, small batch, hand crafted, local, minority-owned, protecting the rainforest etc. type products, but as a single man living alone, my grocery bill would be probably $800 a month if I bought all of my food from them.

There is something to be said for the power of group purchasing power though. For instance, you can buy a cow for much less than the cost of the individual cuts and have it butchered and split for like, $2-$4/lb of meat you receive.

[conductr]

I think with this openness the problem is there’s so many fluctuations and estimates that average consumer would think you’re being dishonest even if you weren’t. They’d see that you acquired an item for $20 and could never quite understand why they have to pay you $50. They’d see the plethora of line item costs as nickel and diming even if many are absolute hard costs. They’d see the estimated numbers as inflated.

There are coop grocery stores where members get to see the financials at a high level and make price changes that make the market sustainable. This is usually some form of shared ownership but I think this is a better way to achieve similar goals.

[culi]

Yeah I was imagining this would be more of a co-op situation so the rift between "consumer" and "manager" is lessened. Maybe I just want a more nuanced version of the co-op model or a technologically-enabled model that allows a more intelligent exposure of the subcosts

The reason I used the word "open sourced" is because I think a good goal to shoot for would be to allow anyone else to learn and copy the structure/data/model. It'd be more of an experiment than anything else. Like a "let's teach everyone how a grocery store actually works" thing. Maybe even a non-profit

[b10nic]

I have always liked the idea of a company that sits between me and all the other services I engage. Like I am a client of ZipZorp and they negotiate on my behalf rentals, travel, providers, utilities et al. ZipZorp provides value to me by using their size to negotiate better rates, conditions, offer legal protection and as you put it remain hyperinformed in a way that I cannot. I would pay for a service like that.