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Pestelence2020 t1_jdzvrdb wrote

Reply to comment by DenuvoSuks in Who is taking the extra profit here? by n1ck90z

Probably the issue is why are imported products from China not going down in cost as a result in the reduced overhead costs associated with shipping…..I.E. are sellers pocketing the savings from shipping cost reduction but not reducing the prices of their goods for sale.

This analysis forgets the inherent delay associated with these kinds of inputs. Prices won’t fall until competitive pressures make them. If everyone importing a certain widget is selling for a stable price of $x, why would they reduce that price unless demand falls to a level they’re forced to consider $x-y = more sales (and more profit)?

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DenuvoSuks t1_jdzy3ao wrote

i'm tired of saying this, no one wants to see prices going down, once inflation gets them up it's really hard to ever see a decrease unless things get really bad. This is an historical fact.

If you can sell less quantity for the same margin, profits go up.

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n1ck90z OP t1_jdzzx94 wrote

My point here is exactly that this is short/mid term bullish for companies pocketing this money. The question is which companies are pocketing the most. Depends also on how much shipping costs weight on the goods value

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