Question of Ethics during the Hop "Crisis"

Evan! said:

Charge too little and it's predatory pricing. Charge too much and it's gouging. Charge the same as your competitors and it's collusion.

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Wow Evan!, those are the words I have been trying to form in countless arguments, I think I am stealing your explanation for my own. Whenever I try and say the same thing it comes out all garbled and convoluted....

You remind me of a particular blazing saddles quote

deathweed said:

Wow Evan!, those are the words I have been trying to form in countless arguments, I think I am stealing your explanation for my own. Whenever I try and say the same thing it comes out all garbled and convoluted....

You remind me of a particular blazing saddles quote

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It's from an old libertarian joke that I heard awhile back:

Three guys are in a jail cell. They start to talking and find out that they’re all gas station owners.

The first one says, “I set my prices at a couple of cents higher than my competitors. I’m in here for price-gouging.”

The second one says “I set my prices at a couple of cents lower than my competitors. I’m in here for predatory practices.”

The third one says “I set my prices at the same price as my competitors. I’m in here for collusion!”

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Agree with Evan! et al that there's nothing at all unethical about the pricing -- in fact, it's a fairly sophisticated strategy for a HBS. Pricing 101: segment your customers in such a way that you can get each of them to pay the maximum they're willing to pay.

What I don't understand (and which is more aligned with the other part of the OPs original question) is WHY the HBS would choose to make pounds of hops available on eBay (and, it appears, on his web site) with no "must-buy-grain" conditions, and then not do the same for customers in the store.

I don't think it's unethical; I just don't understand what he's trying to accomplish.

Anyone else get it?

NoClueBrewMaster said:

IF you read all of what I have said, my problem is not that he is selling his items on ebay or what he is charging. My problem is that he is willing to part with said items on ebay, yet won't do the same in his store front. To purchase hops from him, you have to purchase other items as well. Thats what seems unethical to me. He should be treating his "E-customers" the same as the guys that actually come into the store.

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Again, what you don't seem to realize is that the whole "you have to purchase other items from me as well" practice is, in essence, the same as a price increase. He's essentially selling his hops as a "package deal only" at the store.

Think about it for a minute---let's say a company had some MP3 players to sell. They decided to sell them at a bricks-n-mortar shop and online. They wanted to sell them as a package along with a case for the player, a wall charger and a computer dock, but soon realized that there were similar products online that were being sold individually---and as a package deal, it probably wouldn't sell. On the other hand, since there weren't many retailers near their bricks-n-mortar store selling mp3 players, they didn't have the same competition in the physical world, so they went ahead and decided to sell the package deal in their physical store rather than sell the MP3 player alone.

Again I ask, what about that situation is unethical? You said in the post title that it was "question of ethics", and I'm trying to answer your question. The method in which a retailer sells his wares, whether it's through package deals like this, or with mail-in-rebates, or whatever, is (or should be) up to the retailer, and it's not unethical to choose different methods of selling for different markets.

Also, I have taken Econ as well as other business related classes. I have a full understanding of supply and demand as well as standard business practices due to economy, location, etc.

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If that's the case, then I'm surprised that you fail to understand that selling products in a different fashion in different markets/locations is not unethical. Hell, I see it all the time, in different guises. For instance, I'll go into my cellphone company's store looking for a wall charger, but they're selling it for way too much money and they make you buy a whole package that includes a car charger. Since I don't need a car charger, I go online and find the wall charger by itself.

Because online shopping is so competitive and because people can simply open 10 tabs at once and compare deals, it's an entirely different environment from a local homebrew shop. It's not like, after you've driven to the shop and made the effort to go inside and look around, you can just compare prices instantly with 10 other nearby shops. On the internet, you can. Thus, you should not only accept, but expect different selling methods and prices between the two mediums of commercialism.

Bike N Brew said:

Agree with Evan! et al that there's nothing at all unethical about the pricing -- in fact, it's a fairly sophisticated strategy for a HBS. Pricing 101: segment your customers in such a way that you can get each of them to pay the maximum they're willing to pay.

What I don't understand (and which is more aligned with the other part of the OPs original question) is WHY the HBS would choose to make pounds of hops available on eBay (and, it appears, on his web site) with no "must-buy-grain" conditions, and then not do the same for customers in the store.

I don't think it's unethical; I just don't understand what he's trying to accomplish.

Anyone else get it?

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yes, I get it---read my comment above. There's much more competition online, and people can compare prices and deals instantly with 10 other stores---so he probably realizes that he would get crushed by the competition on the internet, whereas at the local store, he doesn't have that same competition. It's not that he doesn't WANT to do the whole "you have to by grain" thing on the internet, it's that he CAN'T.

Evan! said:

Those who don't understand economics think that an item's price should be tied solely to the base cost of the item. Thus when someone sells the same product for more in one location and less in another, they think that it's "unethical", not realizing that an item's price is not just set by its cost alone, but by other factors such as competition...If you have a basic understanding of economic principles you'll quickly realize that there has been no ethical breach here...

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I think the OP said the LHBS would not sell hops to him unless he purchased a kit first and at the same time he sells hops in bulk on-line but not in his store.

It has nothing to do with competition only his business practice to his walk-in customers. This is why I said he's probably making a killing on shipping and handling charges.

OP: I think you should post the stores name and owner. We can either buy him out of his hops or spread the word about not buying anything from him...

Evan! said:

It's from an old libertarian joke that I heard awhile back:

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Oh, in that case, retract my previous impressed state...


I also 100% agree with you Evan! So much so that 1.) I can't really add any more to the argument, but may try anyways, and 2.) I am kinda developing a man crush here


Other than "ethics" being a relative term anyways, there is no ethical dilemma here. the owner is choosing to sell to different niche markets with different strategies. No one on line is going to want to buy only 2oz of hops if they have to get 10lbs of grain as well, they are going to want to buy in bulk. On the other side, someone running into the LHBS is probably going to go ahead and buy that grain with the hops, and may even possible shop around an pick up a few extra odds and ends.

This is the same as a major retailer moving into a small rural community. Because of their infrastructure, they COULD under price every mom and pop store in the area, but because of their size and the "convenience factor" the can charge MORE on some items and get away from it, even if it upsets some peoples delicate "ethics".

Once again, as I said previously, the seller can do what they want. As long as people are still willing to pay, there is nothing wrong with what he is doing. You can make the personal choice to shop elsewhere, and if there are enough people willing to do that, he would be forced to make a change. Until then, either pay up, or go elsewhere.

homebrewer_99 said:

I think the OP said the LHBS would not sell hops to him unless he purchased a kit first and at the same time he sells hops in bulk on-line but not in his store. It has nothing to do with competition only his business practice to his walk-in customers. This is why I said he's probably making a killing on shipping and handling charges.

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Bill, as I've explained previously, it has everything to do with competition. The reason he can (or at least thinks he can) get away with enacting the "must buy grain" or "must buy a kit" practice in his store is because there's probably zero competition---at least that's been my experience. In the "real world" (offline), there's rarely more than 1 homebrew shop in a 100 mile radius. The reason he doesn't to it online is, more than likely, there's fierce competition. Unlike with the offline store, people can shop around instantly, and personally, I know that if I came across an online retailer who was trying to make me buy grain with my hops, I'd laugh it him, close the tab, and buy from someone like freshops. If I were in his store and I needed hops for a brew I was doing that evening, I wouldn't have that option.

As such, this is ALL about competition. If his offline customers feel slighted by his practices, then they'll stop shopping there, and his profits will decrease, and he'll be forced to get rid of his "must buy a kit" practice. It's called "voting with your dollars". Rather than call into question the ethics of the man, just don't shop there if his practices are unacceptable to you. But to say that this has nothing to do with competition belies a lack of economic understanding.

Didn't read the whole thread, so not sure if this is completely off-topic, but i didn't feel like making a new one

i went to San Francisco Brewcraft for the second time last weekend and bought enough ingredients for 2-3 beers. Then they limited my hops so i can't even make the 2 beers i was going to do.

I can get the hops from other sources. That's still bull****.

They are free to do as they'd like, but I won't be shopping there again.

This is getting even funnier. I posted a question on the Ebay auction where this guy is selling his hops, and he said that they WILL NOT LIMIT the amount of hops u can buy in store. I was there a week or 2 ago, and u could only buy hops for recipes, and it said on EVERY FREEZER that you could not buy bulk.

You can print out what he says on ebay, and show it to him in store. If he does not honor it, you can try reporting him to the ebay authorities (whoever they are....)

deathweed said:

You can print out what he says on ebay, and show it to him in store. If he does not honor it, you can try reporting him to the ebay authorities (whoever they are....)

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That's what I was thinking. It's fine to have package deals and/or limit the amount of hops someone can buy, but lying and/or deceiving people is unethical. I bet that if you print out that thing from eBay and show them at the store, they'll swallow their pride and sell you whatever you want. Looks like you may have found a nice way around their package deal.

well, i'm going to skip all of those super-fun lectures on economics and get to what i think is the point of the OP.

homebrewing is a tight-knit clan of people who share a love/obsession with beer, doing this stuff may be economically sound, but morally dick to people who share an interest.

oh, and if any of the posters who wrote pages on the theory of economics needs help getting down from their high horses, give those who agree with the OP a call, we'll be right there....

deathweed said:

Oh, in that case, retract my previous impressed state...


I also 100% agree with you Evan! So much so that 1.) I can't really add any more to the argument, but may try anyways, and 2.) I am kinda developing a man crush here

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Uh oh. Should I be scared?

Really, I just try to think about economics rationally rather than emotionally, and it helps to clear the air of any BS. When you realize that the seller OWNS that stuff, and it's HIS, and that he should be able to do whatever he wants with it, things are just a whole lot simpler. When you feel slighted by someone's business practices, it's a kneejerk reaction to say that he's done something wrong or unethical---but if you remove the emotionalism from that situation, you realize, hey, you know what? He doesn't have to sell me hops at all. They're his product, so for all he cares, he could put all the hops in the front window of his store and put up a big sign that says "these are my hops and I'm not selling you any", and there's nothing anyone can do about it except refuse to shop there.

NoClueBrewMaster said:

This is getting even funnier. I posted a question on the Ebay auction where this guy is selling his hops, and he said that they WILL NOT LIMIT the amount of hops u can buy in store. I was there a week or 2 ago, and u could only buy hops for recipes, and it said on EVERY FREEZER that you could not buy bulk.

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Print that Q&A he provided you with into the store. Take the amount of hops you want to the counter and proceed with the purchase. If you are questioned provide the documentation. This would be alot like when places tell you: "we'll beat anyones prices."

If this does not work then just don't shop there ever again.

Damn everyone beat me!

deathweed said:

You can print out what he says on ebay, and show it to him in store. If he does not honor it, you can try reporting him to the ebay authorities (whoever they are....)

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Just takin a guess but I really don't think ebay cares to get involved in the discussion of a transaction in the retail store, outside of ebay.

OblivionsGate said:

well, i'm going to skip all of those super-fun lectures on economics and get to what i think is the point of the OP.

homebrewing is a tight-knit clan of people who share a love/obsession with beer, doing this stuff may be economically sound, but morally dick to people who share an interest.

oh, and if any of the posters who wrote pages on the theory of economics needs help getting down from their high horses, give those who agree with the OP a call, we'll be right there....

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I'm not on any high horse, it just pisses me off when people ignore simple economics. Regardless of how tight knit this "clan" is, the fact remains that these guys are A BUSINESS.

And what I'm trying to tell the OP is that it's not morally or ethically wrong; it's just how this particular guy chooses to do business. I'm sorry if you feel that my explanation of economics and my defense of this guy's business practices puts me on a "high horse", I'm just trying to explain basic economic principles so that people won't be so quick to rush to judgment about things like this.

Instead of bitching about ethics, DO SOMETHING ABOUT IT!

OblivionsGate said:

homebrewing is a tight-knit clan of people who share a love/obsession with beer, doing this stuff may be economically sound, but morally dick to people who share an interest.

oh, and if any of the posters who wrote pages on the theory of economics needs help getting down from their high horses, give those who agree with the OP a call, we'll be right there....

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Wow, ummm, wow? We may be a "tight knit clan" but do you SERIOUSLY believe that no one is going to say "hey! I have the supply! There is a huge demand! I am going to jack up my prices and sell in different places to that I can make more money off my product!!!!"

Business is Business. Save emotion for charities. If you have a serious problem with his practices, take your money elsewhere. It's not like there are no other HBS out there.

brewt00l said:

Just takin a guess but I really don't think ebay cares to get involved in the discussion of a transaction in the retail store, outside of ebay.

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My thought that is if he is posting false information on the produt to try and sell it, they may have something to say about it.

High horse? No. You can be my best friend but I'll slap you with facts if you're speaking ignorantly about something I have an opinion on. I don't mean ignorant in its commonly perceived negative implication. People hardly ever know that they don't know something. I'm talking about providing some clarity when emotion makes you say silly things ;-)

I don't think Evan or anyone else in the "this is capitalism" camp has been disrespectful at all.

Bobby_M said:

I don't think Evan or anyone else in the "this is capitalism" camp has been disrespectful at all.

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I might have been, but I don't know how not to be

deathweed said:

My thought that is if he is posting false information on the produt to try and sell it, they may have something to say about it.

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But that has no impact on the accuracy of the listing or the auction transaction covered by the buyer/seller TOS. I don't think ebay would get involved in failure to deliver on a transaction outside of ebay just because it was discussed in the listing of a similar product by the same seller.

brewt00l said:

But that has no impact on the accuracy of the listing or the auction transaction covered by the buyer/seller TOS. I don't think ebay would get involved in failure to deliver on a transaction outside of ebay just because it was discussed in the listing of a similar product by the same seller.

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Eh, its worth a shot. trying the BBB would probably be just as useful, but it might make you feel like you personally accomplished something/

deathweed said:

I might have been, but I don't know how not to be

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Well you're right there but there are a certain number of people who take disagreement as a personal attack. I might just be a little biased because I'm going to be selling a pound or two of hops in the near future and might even charge a different price depending on who I sell to. Call the cops.

Seriously, I'm just kidding around.

DeathBrewer said:

Didn't read the whole thread, so not sure if this is completely off-topic, but i didn't feel like making a new one

i went to San Francisco Brewcraft for the second time last weekend and bought enough ingredients for 2-3 beers. Then they limited my hops so i can't even make the 2 beers i was going to do.

I can get the hops from other sources. That's still bull****.

They are free to do as they'd like, but I won't be shopping there again.

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Evan: This (above) is the tactics I'm complaining about.

And yes, you are right...and we choose to buy EVERYTHING elsewhere where we can get all the supplies we need.

I can understand going to a HBS and buying a kit or supplies enough for 2 batches and the guy selling you only enough for the recipe, but not selling you enough hops to make the batches for the supplies you purchased is just not right...but he'll sell bulk hops on-line? There's just something fundamentally wrong with both transactions because of an alleged shortage.

Personally, I'm not affected by the shortage. I had pounds of hops in my freezer for months before the first announcements of a possible shortage.

Plus, I know there are people here who are willing to trade, which has already happened a little while ago.

I also have 5-8 hop plants that will be 3 years old this year. :rockin:

Well if we were all as prepared as you, there would be no shortage would there?


I got to admit I stocked up as well (despite all the warnings not to) although I wish I had stocked up earlier than I did. I am just hoping I can grab enough of the 2008 crop this summer/fall to hold me another year.

Oh yeah, to stay on topic.... Capitilism... that is all.

Is it really false info? Did the owner ever think that the person who comes into the store would be going on ebay as well, then put 2 & 2 together to figure out what the store was doing? People sell things on ebay to people who live thousands of miles away and would not have known otherwise. The accuracy and fairness of the ebay transaction is relative to ebay and nothing else.

However, now he has said he will not limit the amount he will sell in the store, using ebay as a means of communication. Again the prices he puts on the ebay listing are not relevant. What he said regarding the store's policies and prices while using ebay to communicate is relevant.

I don't take any offense to anyone speaking their mind. Thats why my thread is called "QUESTION of ethics..." and not "THIS GUY HAS NO ETHICS". IMO, there is a big difference between those statements. Also, why do you think I put Crisis in quotes?

The bottom line is that you can still state your opinion without trying to teach someone something they might already know. I'm not saying anyone is on a high horse, however I can see how some might take it that way. I have taken many courses on ethics, logic, philosophy as well as business classes. However, when I have an opinion on a given topic, I don't feel the need to lend footnotes for each statement I make and create a thesis from an opinion.

The bottom line is that this guy is limiting the amount of hops he sells in store to create revenue online. Yes, he can do that. Yes, they are infact his hops and his to sell as he likes. I don't agree with his business practices, and in the end he is just hurting himself.

First and foremost, i think the "capitalism" camp has been disrespectful to a degree. The OP was looking for some agreement/sympathy/listening ear from a community that should feel outraged about that. To then BASICALLY (not literally) call him and those in his school of thought idiots because "hey, its basic economics, tough" is ignorant.

As far as the tight knit community comment: how many people in america buy gas vs. how many people homebrew? how about the fact that of all the people on this site that go to lhbs, its mostly this one guy who is dealing with this problem? you want to mock me by saying "do i really think the 'community' wouldn't act like a business," thats just bull. My lhbs doesn't act like that and unless you are so rich that you can scoff at the idea of being forced to buy products you don't need to get the product you do, then i'm sure that would bother you too, regardless of "capitalism."

And as far as the high horse comment: i've already touched on that, you start lecturing basic economics like you are so great? the one poster said "i'll slap you with facts if you disrespect my opinion" hey, what do you think you are doing, but disrespecting the OP and my opinions! deathweed gets no comment, you admitted you responded in an ignorant way, and for evan, people are making jokes that for once they agree with you, that is how MUCH you disagree with people on the forums. so yes, for lack of a better phrase, get down off your high horses.

and in case you missed this point in my first post, lets bold it: i agree with you it is a valid economic practice, but it is morally ignorant to do that to someone who just wants to buy their product and go. Someone said this isnt the subject for emotion, look back to my explanation of why hb is a tight community, when better is emotion and ethics a role than when one person who should help fellow brewers stabs another in the back. and as far as doing something about it, if it WERE my lhbs, i sure as hell would never go back...

NoClueBrewMaster said:

in the end he is just hurting himself.

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Only if people stop buying from him

Ok sorry, I am getting a littl druck an just had to reply

Evan! said:

yes, I get it---read my comment above. There's much more competition online, and people can compare prices and deals instantly with 10 other stores---so he probably realizes that he would get crushed by the competition on the internet, whereas at the local store, he doesn't have that same competition. It's not that he doesn't WANT to do the whole "you have to by grain" thing on the internet, it's that he CAN'T.

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I guess I understand what he's TRYING to do, but it's just dumb, because
(a) there's too much transparency, so people coming in the store will quickly become aware of the situation
(b) it's likely to piss people off
(c) it's so easily circumvented -- you can actually go on his web site, order UNLIMITED hops, and for shipping, enter

(wait for it)










(wait for it)






















STORE PICKUP!

OblivionsGate said:

First and foremost, i think the "capitalism" camp has been disrespectful to a degree. The OP was looking for some agreement/sympathy/listening ear from a community that should feel outraged about that.

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The OP said it was a QUESTION, then opened it up for a DISCUSSION. Lo and behold a discussion got opposing points of view.

As far as the tight knit community comment: how many people in America buy gas vs. how many people homebrew? how about the fact that of all the people on this site that go to lhbs

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The gas situation (not to start a new argument) is more that people HAVE to buy gas to earn a living, you DO NOT HAVE to homebrew. And not ALL people go to a lhbs, I personally have never been in one. I have done all my shopping online.

you want to mock me by saying "do i really think the 'community' wouldn't act like a business," thats just bull. My lhbs doesn't act like that and unless you are so rich that you can scoff at the idea of being forced to buy products you don't need to get the product you do, then i'm sure that would bother you too, regardless of "capitalism."

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Well, the fact that this is a small hobby niche, I am pretty sure that any store you buy from is a BUSINESS. great if your lhbs has more lenient policies, it is their choice. Just like it would be their choice if they decide to adopt practices just like the store the OP mentioned.

And as far as the high horse comment: i've already touched on that, you start lecturing basic economics like you are so great? ... deathweed gets no comment, you admitted you responded in an ignorant way,

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So lecturing us that we have opposing points of view doesn't put you on a high horse? And I don't remember EVER saying I was ignorant, just that I might have been a little "disrespectful" (and that still holds true)

i agree with you it is a valid economic practice,

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the first point I believe that we were trying to make

but it is morally ignorant to do that to someone who just wants to buy their product and go

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morally ignorant? or common BUSINESS practice?

if it WERE my lhbs, i sure as hell would never go back...

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The SECOND point the capitalist camp was trying to make.

Glad we could agree on our major points

you could always win the auction, with some crazy high bid, then never pay him. me thinks he still has to pay listing fees based on the sale price....

did i type that out loud?

This whole thread has gone off-topic. Do people really need to argue about economic practices, business ethics, etc?

I have definitely come away from this thread with knowledge, but it's certainly not what I was looking for.

I'd bet that most of you would have more respect for each other face to face than on this board. I appreciate the points that both sides have made, however this was never intended as a economic practices debate.

Somehow I see that coming back to bite you in the rear somehow.... May be worth looking into:cross:

obviously you'd want multiple ebay accounts if you were to engage in said practice.

this is an ethics thread right? :cross:

... HA...

I guess it is an "ethics" thread, however its more of a "Good Will Hunting" "This Kid is Wicked Smaat" "How Do You Like Them Apples" type of thread...

NoClueBrewMaster said:

I'd bet that most of you would have more respect for each other face to face than on this board. I appreciate the points that both sides have made, however this was never intended as a economic practices debate.

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I apologize for my part in the economic practices debate, it is a bit OT, but when discussion happens....

As far as being more respect for each other, I respect everyone on here, and I am sorry if sometimes it does not come off that way. when I am disrespectful, it is because I believe in bluntness, truthfulness, and not PC question dodging. I make it a point not to type anything I wouldn't say to someones face. You can ask my wife (if you knew her of course) I am a crass, blunt person, who does not sugar coat what I think. I would be perfectly comfortable having this conversation face to face over a beer in a bar. thats how discussions are supposed to be had, right?

So Oblivion and anyone else, I am not looking to pick a fight or offend, I say what I think, sometimes even in a point by point refutation.... But at the end of the post/thread/discussion, I would stand up, shake your hand, and offer to buy the next round

RDWHAHB applies to more than just, "will my beer be ok?"

NoClueBrewMaster said:

This whole thread has gone off-topic. Do people really need to argue about economic practices, business ethics, etc?

I have definitely come away from this thread with knowledge, but it's certainly not what I was looking for.

I'd bet that most of you would have more respect for each other face to face than on this board. I appreciate the points that both sides have made, however this was never intended as a economic practices debate.

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No offense, but next time you start a thread called "Question of Ethics...", I wouldn't go into it expecting people to refrain from discussing ethics. I don't know exactly what type of knowledge you were "looking for", but let's reflect on your original statement:

I was browsing Ebay tonight looking for decent deals on equipment, and found a guy thats selling whole leaf, pellet, and plug hops in 8 oz to full pound quantities. Since he had quite a few up for sale, I looked him up, and found he owns a shop in my area.

The funny thing is, when you go to this guys store, he won't sell you hops without buying a recipe kit. If I can buy his hops (ONLY HOPS, no recipe) on ebay, shouldn't I be able to do the same in his shop?

Not only that, but his prices in store are completely different than on his ebay "store" and he is definitely price gouging.

I have had issues with this guy before messing up a recipe (horribly I might add), but this just seems completely rediculous.

Perhaps I'm off-point on this, but does anyone else have an opinion on this situation?

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You questioned the ethics of a business practice, flat out accused them of price gouging, then explicitly asked for people's opinions. What did you expect to come from that? If you were looking for a bunch of people to commiserate with you on the horrible actions of this guy, then you should have come out and said so. But you questioned someone's ethics and explicitly asked for opinions on it. I can't believe you expected anything else than what this is.

As far as respect, I have the utmost respect for people who discuss/debate matters in a civilized manner, and I apologize for my matter-of-factness coming across as malice or disrespect; that's certainly not how I feel. The interwebs are funny like that---it's really difficult to pull someone's tone and emotional vibe from words. But I assure you that while my posts are often heated and passionate, they're not meant to disrespect anyone. It's nothing personal, I just have problems when people judge others based on what I feel are faulty premises.

Furthermore, the reason this turned into a debate on economics is because you explicitly accused this business of gouging. You said, "he is definitely price gouging." That's quite an accusation, and one that I felt needed to be corrected. The way I tried to do that was by explaining some economic principles. At the same time, I had a problem with your claim that you've taken classes on economics and understand them, since I found your definition of price gouging to be way off the mark.

These are the reasons it turned into what it did. Again, I meant no disrespect and I still don't---but next time, really, if you're looking for people to commiserate with, just say so, rather than making serious accusations and then asking for opinions.

Cheers,

Evan