Another super Mall for Santiago!!!!

[cobraboy]

Nope! In the DR you must play by a different rule in order to be a survivor and make a profit!

Fixed prices relate to how a group or sector would set prices up to their profit, competition is just competition. Both are not plausible for the DR.

If you must call it something, then hedging would be the best descriptor...

Unbelievable.

Just unbelievable.

 

[cobraboy]

Static inventory is a killer for big box venues.

Static and old inventory is what you see on the shelves of many, many Dominican stores.

 

[the gorgon]

Unbelievable.

Just unbelievable.

horsesh*t is more like it.

 

[PICHARDO]

Static and old inventory is what you see on the shelves of many, many Dominican stores.

Hardly! Most stores keep inventory to a decent level shy of about less than three weeks or so at best in the DR.

The only thing they make sure to keep plenty of in any quantity after a lot of it, is the liquor...

 

[PICHARDO]

Unbelievable.

Just unbelievable.

Once you learn to accept it, it opens a huge window into understanding how the DR's economy ticks away. That and dealing with all the gov's web of policies will give you a door to creating wealth, you can leave to your children's children and generations ahead...

 

[pdmlynek]

if you have a problem with the figures, then take it up with the CEO of the company. he is the one who gave them. i do not know if you can get the program from some archives, but that is what the guy said. this company controls the sunglass, and prescription glass market in the USA. i am not speaking of 10 dollar chinese fakes. i am referring to real Gucci type stuff. ...

I do not have any quarrel with you, the gordon. I do not question your veracity.

The CEO who says that it costs 35 USD to stamp out, extrude and put together a few grams of acrylate/metal is full of it. I simply do not believe him. Even if it is done in Italy. Because there are many different ways of figuring out costs, he is using the one that benefits him the most, i.e., make him look that it costs a lot of money to make sunglasses. He must be including in it a whole bunch of other stuff that most people would not include in the cost of manufacturing such as OH, R&D, etc. (yes, I have worked in the plastics industry, though not in sunglasses, so I have some idea of costs).

Why can the Chinese produce knock offs and sell them for a couple of dollars? It is not necessarily the "quality" which every branded distributor automatically cries about (what else can they be crying about), but it is about the name. No-name sunglasses can be sold only for a few dollars, because of the competition with other no-name sunglasses; nobody is going to pay a lot of money for no-name sunglasses regardless of the quality or appropriateness to the wearer. Branded sunglasses, be they Gucci, Oakleys, Raybans, or whatever the latest film stars are given to wear, can charge more for their sunglasses because people are willing to pay obscene amount of money to wear the same sunglasses that some sports/movie/rock star happened to wear.

It is all about marketing. It is all about image. That is what customers are willing to pay for. I congratulate the makers of such luxury products.

 

[pdmlynek]

...to follow this markup idea, here is a little list of product markups on familiar objects of sale

1..wine in restaurants...300% markup

2..certain brands of lingerie..300%

3..designer jeans..between 200-350%

4..SOME eyeglasses..up to 1000%

5..concession stand foods, such as at a ballgame...up to 1000%. normal markup is 500%. think of popcorn as an example

6..over the counter drugs..between 200-3000%

a)antacids and pain killers..400%

b)decongestants..300%

margin on a soda at McDonalds..anywhere around 900%. a 2.29 soda costs 13 cents to produce.

....

I do not understand. Are you having a problem with such mark up?

Look, the reason why prices set at the prices that they are, is because that is the price which customers are willing to pay, and which seller is willing to accept. How much it costs to manufacture the product is simply irrelevant. Who cares how much it costs to manufacture? The cost-plus model of pricing goods, or the percentage-profit, or similar type of pricing structure that ties the price to COGS, or manufacturing costs, or whatever, is simply an inefficient way of setting prices.

When I go a store and I see two products that meet my needs equally, and Product A costs 9 units whereas Product B costs 10 units, which will I buy? Just like everyone else, Product A. Do I care what the manufacturing costs is? No. If both products are the same, I'll pick the cheaper one, even if the manufacturing cost for Product A is 1 unit whereas the manufacturing cost for Product B is 8 units. Or if it is other way around.

If you see something wrong with this, then congratulations; you may be a visionary to take advantage of this arbitrage. Go open up a store, undercut your competitors by selling that 13 cent soda for 18 cents or 26 cents, or whatever you feel is fair, and beat McDonalds in selling soda.

 

[pdmlynek]

The DR market is NOT based on competition!

Those that try that way soon find out they are setting themselves up for major bankruptcy...

There are far too many unpredictable variables that can change the costs of the goods in short notice, worst yet leave you out of funds to replace a dwindling inventory if you go that route in the DR.

The model of capitalism in the DR adjusts to the reality of the country and system, hence why I keep repeating myself here about how unlike to the U.S. or U.K. the model really is from the basics out.

If I were to represent the DR economic model in plain Jane words so that even a toddler would grasp it, I would say that the DR biz are carried out in a manner consistent to a hedge fund, but one that's applied on an everyday circle of operations.

Price fixing would be impossible, given the volatility of the said prices.

It's more a question of how high can I go before I price myself out of biz in the DR. If the market allows for it, there's no cap or preset guidelines to halt the soaring rates.

I am sorry Pichardo, but I have no idea what you are trying to communicate.

Are you trying to imply that the markets are inefficient?

What do you mean by "price fixing"? Price fixing has nothing to do with cost volatility, but with collusion with one's competition.

Your last sentence makes it clear that markets work in DR.

What do you mean that DR economic model is consistent with a hedge fund? Yes, you can use big words to explain it to me; I have an MBA in finance from one of the top bus schools in the US.

 

[SantiagoDR]

Chiri with all due respect a statement like yours could only infer that one group owns all of the malls - which I doubt is the case.

No it doesn't.

 

[the gorgon]

I do not have any quarrel with you, the gordon. I do not question your veracity.

The CEO who says that it costs 35 USD to stamp out, extrude and put together a few grams of acrylate/metal is full of it. I simply do not believe him. Even if it is done in Italy. Because there are many different ways of figuring out costs, he is using the one that benefits him the most, i.e., make him look that it costs a lot of money to make sunglasses. He must be including in it a whole bunch of other stuff that most people would not include in the cost of manufacturing such as OH, R&D, etc. (yes, I have worked in the plastics industry, though not in sunglasses, so I have some idea of costs).

Why can the Chinese produce knock offs and sell them for a couple of dollars? It is not necessarily the "quality" which every branded distributor automatically cries about (what else can they be crying about), but it is about the name. No-name sunglasses can be sold only for a few dollars, because of the competition with other no-name sunglasses; nobody is going to pay a lot of money for no-name sunglasses regardless of the quality or appropriateness to the wearer. Branded sunglasses, be they Gucci, Oakleys, Raybans, or whatever the latest film stars are given to wear, can charge more for their sunglasses because people are willing to pay obscene amount of money to wear the same sunglasses that some sports/movie/rock star happened to wear.

It is all about marketing. It is all about image. That is what customers are willing to pay for. I congratulate the makers of such luxury products.

actually, you are inadvertently helping to make my point. i , too, do not believe that they costs that much to make. if the chinese can make them for a dollar a piece, i see no reason why the Italians make them for 35. what that means is that the markups are astronomical. PICHARDO claims that markups in the USA are not anything like 200%. i beg to differ.

 

[the gorgon]

I do not understand. Are you having a problem with such mark up?

Look, the reason why prices set at the prices that they are, is because that is the price which customers are willing to pay, and which seller is willing to accept. How much it costs to manufacture the product is simply irrelevant. Who cares how much it costs to manufacture? The cost-plus model of pricing goods, or the percentage-profit, or similar type of pricing structure that ties the price to COGS, or manufacturing costs, or whatever, is simply an inefficient way of setting prices.

When I go a store and I see two products that meet my needs equally, and Product A costs 9 units whereas Product B costs 10 units, which will I buy? Just like everyone else, Product A. Do I care what the manufacturing costs is? No. If both products are the same, I'll pick the cheaper one, even if the manufacturing cost for Product A is 1 unit whereas the manufacturing cost for Product B is 8 units. Or if it is other way around.

If you see something wrong with this, then congratulations; you may be a visionary to take advantage of this arbitrage. Go open up a store, undercut your competitors by selling that 13 cent soda for 18 cents or 26 cents, or whatever you feel is fair, and beat McDonalds in selling soda.

actually, my list was not compiled because of an opposition to the notion of high markups. i did it because PICHARDO asserts that there is no such thing in the USA as 200% markups. i made the list to contradict his statement.

 

[the gorgon]

I guess to Gorgon the fact of biz that you can't extrapolate a few items profit margins to the whole gamut of goods is lost on translation, unless:


He owns a restaurant that ONLY sells wine to clients from open to close...

Sells only that type of lingerie in the store 365 days a year and does brisk biz year round...

Only sells those designer's jeans on that store and clients are a plenty...

Only sells those "some" eyeglasses with a 1,000% profit (which I hope for his sake are at least more than USD$ 20 a pop and a constant stream of sunny days to boot).

Ballgames each day of the week, 365 days a year... And everybody in the park buys at least one item!: Nirvana!

Over the counter drugs?!?!? You're having too much prozac already or is that a pill mill???

Antiacids and pain killers? LOL!!

Descongestants??? LOL!!


So a 2.29 soda costs 13 cents? Wow! I guess somebody forgot to add ice (which is made by an electric ice machine 24/7), the syrup (last I checked the price for a 5 bib was a tad high), etc...

Somebody is selling you dreams boy! Wake up!

such idiotic observations do not merit a response.

 

[the gorgon]

Easy: drop shipping to the DR is prohibitively expensive as anyone who lives here knows. One has to pay a rate of $4-5 a pound in shipping alone. You can ship 40,000lbs in a 40' container to the DR for $2500MOL. Compare and contrast $4.50lb. vs. $0.07lb., Perfesser Parse.

I am comparing the DR mall model with an in-the-DR direct shipper company. "Like Amazon," not "Amazon."

The better model comparison *might* be Wal-Mart that receives massive numbers of 40' containers and ships from warehouses to stores and to customer locations from the web. At very low costs.

Mall space is expensive, mall staffing (compared to warehouse staffing) is expensive, driving to malls is expensive and time in the DR is becoming increasingly expensive.

But the current barrier of entry for that model in the DR is the lack of efficient third-party parcel delivery services for *all* the DR "like" UPS, USPS or FedEx parcel (NOT, Perfesser Parse, "UPS, USPS or FedEx parcel.")

let me try this one more time. if drop shipping is the Amazon business model, and you do not plan to drop ship, what is the similarity between yourself, and Amazon?

 

[playacaribe2]

If I were to represent the DR economic model in plain Jane words so that even a toddler would grasp it, I would say that the DR biz are carried out in a manner consistent to a hedge fund, but one that's applied on an everyday circle of operations.

Pichardo:

Here is the future press release;

Best Buy announced today the opening of its first store in the Dominican Republic

(Minneapolis) Best Buy Co. announced its first store to be built in Santiago, the Dominican Republc's second largest city. The mega mall store is a new concept of Best Buy and to insure profitability it will incorporate the latest hedge fund techniques in its business model.

The announcement came after exhaustive market research provided by Grupo Pichardo that the hedge fund model was the way to successfully conduct business in that country.

When pressed to explain the concept, Pichardo, a spokesman for Grupo Pichardo, indicated that based on the study and the dynamism of the current economy, Best Buy could expect to sell more goods per square foot than anywhere else in the world.

Given the study, financial analysts would then issue major lines of credit, without any personal guarantees, and then Best Buy would sell credit default swaps, an insurance policy model successfully used by the major banks in the US to protect against mortgage default. This would then insure profitability no matter whether they sold anything or not.

Pichardo further indicated that is how the Dominican business model has become so profitable and he has hopes to expand the concept to other Latin American countries, particularly Venezuela.


Respectfully,
Playacaribe2

 

[waytogo]

such idiotic observations do not merit a response.

You're in trouble now.................
"P" is going to batata you like nobody's been batatad before...........lol

B in Santiago

 

[the gorgon]

You're in trouble now.................
"P" is going to batata you like nobody's been batatad before...........lol

B in Santiago

thanks, waytogo. i am a grown boy. i can take it with the best of them. when some guy is doltish enough to assert that the USA does not do business with 200% profit margins, that is your cue not to respond, and let him hoist himself by his own petard. what does he think sneakers cost to manufacture? or sunglasses? what is the profit margin on popcorn, for example?

 

[waytogo]

You're trying to debate with someone who thinks he's the smartest person that ever graced this planet.
I cannot find one post where he EVER told someone he agreed with them.
If it's night, he'll say it's day. If it's day, he'll say it's night.
You're wasting your time with this guy...........
he's not worth it...........
When he doesn't have an answer.........it's lol's and batatas............


B in Santiago

 

[the gorgon]

You're trying to debate with someone who thinks he's the smartest person that ever graced this planet.
I cannot find one post where he EVER told someone he agreed with them.
If it's night, he'll say it's day. If it's day, he'll say it's night.
You're wasting your time with this guy...........
he's not worth it...........

B in Santiago

.

thanks, waytogo. i already figured that out, ever since the time he left out a 20% segment of an income study, and attributed the omission to a 'quintile". i laughed so hard i split my drawers.

 

[JMB773]

I do not understand. Are you having a problem with such mark up?

Look, the reason why prices set at the prices that they are, is because that is the price which customers are willing to pay, and which seller is willing to accept. How much it costs to manufacture the product is simply irrelevant. Who cares how much it costs to manufacture? The cost-plus model of pricing goods, or the percentage-profit, or similar type of pricing structure that ties the price to COGS, or manufacturing costs, or whatever, is simply an inefficient way of setting prices.

When I go a store and I see two products that meet my needs equally, and Product A costs 9 units whereas Product B costs 10 units, which will I buy? Just like everyone else, Product A. Do I care what the manufacturing costs is? No. If both products are the same, I'll pick the cheaper one, even if the manufacturing cost for Product A is 1 unit whereas the manufacturing cost for Product B is 8 units. Or if it is other way around.

If you see something wrong with this, then congratulations; you may be a visionary to take advantage of this arbitrage. Go open up a store, undercut your competitors by selling that 13 cent soda for 18 cents or 26 cents, or whatever you feel is fair, and beat McDonalds in selling soda.

REALLY??? Have you ever worked for a large company such as, Walmart, Target, Safeway, Albertsons, Pepsi, Coca Cola, United Airlines, Delta Airlines?

BTW Give me example of two products that are alike? Cheaper is not always BETTER, for instance if Spirit Airline gave me a credit for 10,000USD I still would NEVER stand at a gate marked Spirit Airline. Same product as you put it, but many Americans do not and will not fly Spirit.

Spirit is not ALWAYS the cheapest fly, but you ALWAYS receive the cheap customer service. Care to explain.

 

[cobraboy]

let me try this one more time. if drop shipping is the Amazon business model, and you do not plan to drop ship, what is the similarity between yourself, and Amazon?

I have no interest is going any farther with my example. I could as easily have used WM or NewwEgg; I chose Amazon.

My point...which you parsed, per usual...is that the "mall" concept is largely going away and Big Box stores have a short shelf life.

The DR is 6-10 years behind the US in utilization of technology, and maybe 20 years behind in distribution. It's just a matter of time.