Broke up with my LHBS today

[Beezy]

Todays market prices for grains

Corn 607 cents/bushel 56lbs
Soybeans 1152 cents/bushel 60lbs
wheat 623 cents/bushel 60lbs
Barley 210 cents/bushel 48lbs

It takes a lot of barley to cover the payment on your $350+K John Deere Combine.

It might actually take a study to figure this out since there are other factors. Barley has a higher yield per acre than a lot of grains. Maltsters may pay more for barley too.

http://www.agcensus.usda.gov/Publications/2002/Volume_1,_Chapter_1_US/st99_1_033_033.pdf

 

[teal]

My 2 cents - as long as I'm here...

If I am a retailer I buy a sack of grain for X, hope to sell it for Y and realize Z in profit. Why do I care if that's spread out over 15 customers or just 1? I've realized my profit and it also provided more short term cash flow.

IMO, as a customer I'm more ticked off at being rationed than hearing "Sorry, we're currently out, there's a shortage" - THAT I understand, what ticks me off is the idea that my dollar bill isn't as good as some future customer who may or may NOT need this particular item before you can restock's dollar bill.

 

[bonzombiekitty]

My 2 cents - as long as I'm here...

If I am a retailer I buy a sack of grain for X, hope to sell it for Y and realize Z in profit. Why do I care if that's spread out over 15 customers or just 1? I've realized my profit and it also provided more short term cash flow.

If you have X and you are selling it at Y, and X is in high enough demand & scarce enough, you know you are absolutely, without question, going to realize Z quickly regardless of if you sell it all to one person, or a little to many people.

So here's the question: Do you sell all of X to one person, and risk turning away 10 other potential customers, who may not return to your store in the future because they think you can't keep stuff in stock and/or risk them going to another store in order to acquire X but also purchasing A, B, and C at the other store when they would have bought it at your store if they had been able to buy X (think something like an iPod. I'm probably going to buy things like a car charger and other accessories for it at the store I buy the iPod at)?

or

Do you ration the supply such that 10 people can get what they want, but that 1 person can only get some of what he wants? You'd keep the ten other people happy, and get their additional purchases, but risk losing the business of a potential customer that will tend to buy larger quantities.

It all depends on supply & demand, product (does selling X mean a customer is likely to buy A, B, and C too?), and competition (can a customer easily find a nearby store?).

ETA: My LHBS had to recently ration simcoe and citra hops at 2ozs of each per person. Makes sense for him since there's another LHBS not too far away so if he sold all of his simcoe and citra hops to a couple people, he'd risk many more going to his competition.

 

[Dr. Francois]

If you have X and you are selling it at Y, and X is in high enough demand & scarce enough, you know you are absolutely, without question, going to realize Z quickly regardless of if you sell it all to one person, or a little to many people.

So here's the question: Do you sell all of X to one person, and risk turning away 10 other potential customers, who may not return to your store in the future because they think you can't keep stuff in stock and/or risk them going to another store in order to acquire X but also purchasing A, B, and C at the other store when they would have bought it at your store if they had been able to buy X (think something like an iPod. I'm probably going to buy things like a car charger and other accessories for it at the store I buy the iPod at)?

or

Do you ration the supply such that 10 people can get what they want, but that 1 person can only get some of what he wants? You'd keep the ten other people happy, and get their additional purchases, but risk losing the business of a potential customer that will tend to buy larger quantities.

It all depends on supply & demand, product (does selling X mean a customer is likely to buy A, B, and C too?), and competition (can a customer easily find a nearby store?).

ETA: My LHBS had to recently ration simcoe and citra hops at 2ozs of each per person. Makes sense for him since there's another LHBS not too far away so if he sold all of his simcoe and citra hops to a couple people, he'd risk many more going to his competition.

In the situation you described, demand is much greater than supply. Why not raise the price of high-demand hops and let the market take care of itself? Rationing seems like a prole, command-economy way of dealing with shortfalls.

I've often wondered why many shops keep hops at regimented prices (e.g. $2/oz across the board) instead of shifting prices based on market price and demand. Quite simply, there is more demand for "C" hops than there is for, say, Perle.

 

[ArcaneXor]

In the situation you described, demand is much greater than supply. Why not raise the price of high-demand hops and let the market take care of itself? Rationing seems like a prole, command-economy way of dealing with shortfalls.

I've often wondered why many shops keep hops at regimented prices (e.g. $2/oz across the board) instead of shifting prices based on market price and demand. Quite simply, there is more demand for "C" hops than there is for, say, Perle.

Demand is not easy to anticipate a priori, and neither is available supply. Constantly changing prices takes time and is frustrating to customers (especially if the prices are changed based on perceived demand spikes, at which point competitors will be able to beat the local store easily). Your scenario assumes availability of information that local homebrew stores usually do not have access to.

 

[bonzombiekitty]

In the situation you described, demand is much greater than supply. Why not raise the price of high-demand hops and let the market take care of itself? Rationing seems like a prole, command-economy way of dealing with shortfalls.

I've often wondered why many shops keep hops at regimented prices (e.g. $2/oz across the board) instead of shifting prices based on market price and demand. Quite simply, there is more demand for "C" hops than there is for, say, Perle.

*shrug* I dunno why homebrew suppliers price the way they do. It might just be it's too much effort for them to figure out an ideal price for each type of hop, and only raise the price of a given hop if the price goes up really high. We're not talking about large companies that can do serious market research. Aforementioned LHBS did this when he rationed supply - he could only get his hands on Citra and Simcoe at retail prices, so he sold them for extra as well as rationed them. He supposedly was breaking even on the sale of those hops. He decided that it was better to get a smaller profit off the grain and yeast sales rather than risk losing a sale entirely.

But going beyond LHBS, some stores are contracted to sell a product at a given price. So even if demand is uber high, they can't raise the price easily.

 

[Acoma]

I agree to selling it to whoever comes first. If I am a good retailer I would get more supply asap for the next customer or they will go to someone who can get it for them. This isn't that complicated.

 

[bonzombiekitty]

I agree to selling it to whoever comes first. If I am a good retailer I would get more supply asap for the next customer or they will go to someone who can get it for them. This isn't that complicated.

But there's your risk. Say it takes 3 business days to get more supplies in (assuming you can find them at all, remember we're talking about items that are on the scarce end of things). Within those three days you could have multiple people who come in looking for smaller quantities of X, which you don't have because you sold it all to some guy on day 1. If those multiple people instead opt to go to your competitor, where they can get it NOW, you're potentially missing out on money from peripheral sales (e.g. yeast).

Now, what's better? Potentially losing a sale to one person who buys a lot, or potentially losing several smaller sales? It can be either or depending on what's going on.

 

[Pappers_]

In the situation you described, demand is much greater than supply. Why not raise the price of high-demand hops and let the market take care of itself? Rationing seems like a prole, command-economy way of dealing with shortfalls.

I've often wondered why many shops keep hops at regimented prices (e.g. $2/oz across the board) instead of shifting prices based on market price and demand. Quite simply, there is more demand for "C" hops than there is for, say, Perle.

After consulting my crystal ball and my favorite telephone psychic, I present, based on the above scenario, an HBT Thread of the Future:

I can't believe it! I went to my LHBS and those b*astards tripled the price of my favorite hop! I reminded them I have patronized their store for years, spent thousands of dollars there, and now they gouge me like this. Screw them, I'm buying online from now on, rather than supporting those ungrateful, price gouging SOBS.

 

[cadarnell]

didnt read everything and Im sure someone already said it ... but if you dont have hops you cant sell grain, priming sugar, caps, bottles, etc. .. you should have been told about the limit when they told you they had the hops though .. and in this particular case, i think they should have sold you the other 2 ozs. and just politely warned you about buying so much at once in the future ...

 

[Airplanedoc]

you should have been told about the limit when they told you they had the hops though .. and in this particular case, i think they should have sold you the other 2 ozs. and just politely warned you about buying so much at once in the future ...

At the end of the day this whole thing boils down to poor communication and customer service on the vendors part. From other posters who have used the same vendor, it appears that this is not the first time( or probably the last) this had happened at the same vendor..

 

[teal]

IMO - as a customer, which I AM - I'm less ticked at a LHBS running out of a product than I am being rationed. Particularly if other places aren't doing it.

For instance - I went to my local yesterday. Completely out of 6gal Better Bottles. Does that bother me? Not particularly. I'll go back at the end of the week when they have more in. AND they're more expensive than an e-tailer.

Now if they told me that they had 10 but I was only allowed to buy 1 - that would tick me of to the point of not going back.

I guess I'm just not buying the sensitivity as a customer to a store being out of product but not being sensitive to being told your dollar isn't as good as the next guys'.

If some guy bought out the entire store of every hop they had - as the next customer it NEVER EVER even enters my head to hold that against the store. I more than likely think that dude's an arse but it wouldn't enter my mind that a for profit venture was some how "bad" because it sold it's products to a customer with cash in hand.

Just me...

 

[Pivzavod]

That's why I buy everything online from reliable OHBS.

On the side note, in NYC Whole Foods on Bowery is LHBS. They sell and the supplies and mill your grains for you.

 

[CreamyGoodness]

I found the Bowery location to be lacking in mead/winemakers supplies however (other than fermenters and airlocks etc.) The guy behind the counter with the obligatory mustache was kind and friendly, but didnt know his yeasts at all. If I have to look up a yeast they are selling on my friend's Iphone then perhaps they should at least have more printed materials available. None of the yeasts were familiar, and after looking them up, none were suitable for mead/wine. Just an observation.