i understand what you're saying. i'm not arguing with you but why not just charge a little more the tool due to inflation and keep the same quality? surely everyone understands inflation by now. companies gotta pay their union emplyees 5 dollar an hour raises every year. the gov't impliments "pollution" taxes and forces them to use "less polluting" materials. gas prices increase.
People WOULD NOT BUY the raised panel at a higher price. Actually, the price is, has, and MUST drop, or the sales will drop even more.
It's called a 'price point'. That is, what you ( the customer) will pay for a specific something.
Say it's a taco.
You will pay 59 to 99 cents. Period. You won't pay 1.49 for a taco that is the same as the one you paid 89 cents for last year. You will just complain and go elsewhere.
You may buy the taco Grande, or max taco or whatever for 1.89 and get roughly your old 89 cent taco and 30 cents more meat. See how it works? You aren't buying the old unit at a much higher price. You are buying something better at a MUCH higher price.
Humans buy that way.
Think I'm kidding? Look around. The marketing system in this country (and everywhere else people have freedom to buy) is based on this concept.
You can NOT absorb the increased cost of government/labor/lawsuits by just raising your prices. It would require a constant price increase, every month, quarter, year. Last year’s 8.00 wrench would be 10.00, then 12.00 etc.
No one would buy it, because a Taiwan wrench would be 6.00, and STAY 6.00.
So you have to get what is called creative, or outside the box, or whatever cliché buzz word is hot today.
So you cheapen the wrench till you still make the same gross profit on it that you did at 8.00, even though costs (labor/legal/taxes) are up. But you can't expand, grow or even break even at that rate.
So you push the 'deluxe' wrench which costs a little more to make-market, but sells for 20-60% more, equaling more dollars on the bottom line.
Or you can go out of business. You can't cut labor costs except by leaving the country. You can't cut cost of government from OSHA to EPA to taxes. You can't cut legal costs.
So you de-content the product, push the premium product and hope to continue till you retire/die/go to another company.
Welcome to the real world.
The guys that carry on the most about ‘buying American’ (a noble idea but not real practical) WILL NOT buy a Craftsman raised panel at 12.00, which is what it would cost based on keeping the quality the same, the warranty the same, the in-stock condition the same, (inventory cost LOTS of money, keeping it in-stock as needed costs more than the wrench itself, trust me) etc. means the price has GOT to rise.
Most the buy American crowd only hate the people who have the responsibility to keep the price down, the people who get ulcers and heart attacks trying to get the product to the customer at a price the customer will pay.
They seldom attack the guy screwing up on the line, raising prices, the guy on drugs running the machine that makes all the defects, the Union bosses in their mansions raking in killer money by shaking down the rank and file as well as the company making the product, the welfare mentality that keeps so many out of the workforce, the trial lawyers suing when a guy puts a screwdriver through his hand when drunk, the shoplifters, the employees stealing, etc.
No, they get mad at the people who are REQUIRED by LAW to maximize the company’s profits.
Yes, the law says that a company CEO, or board can GO TO JAIL if they deliberately make choices that damage or reduce the company’s profits.
You see, the government protects the Unions, the school teachers, the plumbers, the mechanics, EVERYONE who owns stock in those companies from the management committing misfeasance. That is, failing to do the right thing for the owners, who are unions, profit sharing funds, mutual funds, retirement funds, grandmothers, and just about everyone else.
Those ‘owners’ who hold stock are protected from CEO’s, board members, company presidents, etc. who want to make less profit, thus stealing from the owners.
It’s a complicated field and everyone is an expert, especially the guys who have never met a payroll, been at a board meeting, been sued by a shyster, or been shaken down by a union official for a kickback.
