Hacker News Reader

Hacker News

Comment by SilasX | Hacker News Reader

Parent Full thread

SilasX

What about regular retail stores? If you buy a box of cereal should Walmart have to say:

Wholesale unit price: $1.40

Retail storage fee: $0.60

rather than

Box of cereal: $2.00 ?

(Not saying that's necessarily a bad idea, just a thought.)

Note: This came up before and I made the same point: https://news.ycombinator.com/item?id=18677023

View on HN

If everyone had to disclose their margins and we removed this information asymmetry, it could be a great thing for consumers, and a great thing for efficient markets.

There are a lot of grandmas and tech illiterate people buying laptops for incredibly inflated prices, from often smaller and more questionable computer shops. We're talking about 5 year old CPUs, 4GB of RAM, sometimes even a hard drive and no solid state drive.

If they had to disclose that the $999 laptop they're selling only costs $400 and they make a margin of $600 on it, and the consumer takes their money elsewhere and buys a genuinely reasonable laptop, I think that's a fantastic outcome.

It would also likely disproportionately harm small business and businesses that rely on value-add services.

It's not really a value-add service if the customer isn't willing to pay $x for it.

The customer can make that decision without seeing margins. While I generally argue in favor of transparency, I think this would end up incentivizing the wrong things.

There's a lot of examples of industries where the price of the actual materials used is not as important as the expertise/training/tools of the person who assembles/installs/prepares/etc it. A policy encouraging consumers to make decisions on margin would would favor companies that skimp on their employees and punish those who are smart about their materials costs. Ultimately, it could end up encouraging wastefulness and inefficiency.

Say you’re a country store in Alaska 300 miles from the nearest town with active business. You have a plane. You bring in goods once in a while. You add what seems a hefty margin.

In those situations I don’t see it as excessive—of course it would be contextual. And some of this is case-by-case.

It would just cause deflation. Everyone who now has their margins eroded now has less money to spend on things. Apply this to everyone and whatever good/service they provide and you end up with everyone having less to spend on goods and services that cost less. The only people that win are those that aren't subject to price transparency and compressed margins, which would likely end up being just those that work for the government, because that's a cost-plus activity.

Fun fact - margin isn't a synonym to profits.

Margins don't include operating expenses(ex salaries of employees)

Profits don't include operating expenses either

Profits are the taxable earnings of the company, sans all costs.

It think it's more helpful when exposing their fraudulent offers. An easy example was loyalty cards that had one purpose but were sold on the lie of big savings. A common trick was to inflate the "regular" price above what was common, offer a card-only "discount," and show the "savings" that came with it. It sounds like they're hooking you up until you go to... any... of the other large competitors seeing similar prices. Even worse, one in my area started adding "You could've saved X dollars" on their fake sales at the bottom of the receipt.

It's stuff like that which might justify rules for transparent pricing. Then, consumers can just avoid companies playing a lot of games with them. Or choose or be stuck with them due to other reasons. This is just one tool in the toolbox.

This sounds like a great thing

Most retail stores aren’t known for inflating prices while adding marginal convenience. They add a service to me and many. The relationship is more symbiotic than parasitic, as I see it.

Looking at this recursively I don’t need the restaurants’ price breakdown, but I think I want to know what the restaurant gets from me if I buy direct vs when we use these services.

Same with Uber vs a regular taxi. I want to know their vigorish.

Same with hospitals and doctors. I want to know if I’ll be paying $100 for a Tylenol when I can go down to their own pharmacy and get one for pennies.

Well I want to know exactly how much of the money I pay is paid to the waiter and the cook. Why do you get to choose what you want, but I get an FU?

The problem with hospitals, is that you aren't even provided with an estimate beforehand. It's a completely different issue.

What about the cost of transportation? The box itself? The ingredients? You could go on forever.

Specific legislation will outline details.

Don't like patchwork regulation as an interstate superchain? maybe you will get behind federal legislation.

The cost of the ink to print the additional cost breakdown

We'll and up with a list going back to the first homosapiens....

Reply on news.ycombinator.com