Price gouging ailse 5, Price gouging ailse 5

[huckdavidson]

How can one vendor be so much less than the rest? Are the other vendors price gouging? The variance is about the same switching to all grain. Why are these prices so far out of control?

6 lbs of Briess Golden Light DME
6 lbs of Briess Wheat DME

Northern Brewer: 71.96
More Beer: 68.40
RiteBrew: 37.56
Williams: 67.96

Northern Brewer:

MoreBeer:

RiteBrew:

Williams Brewing:

 

[mac_1103]

I thought we all knew that RiteBrew has the best prices on DME already. But shipping does close the gap a little on small orders. So it's even better to order more and get the quantity and shipping discounts.

 

[huckdavidson]

I thought we all knew that RiteBrew has the best prices on DME already. But shipping does close the gap a little on small orders. So it's even better to order more and get the quantity and shipping discounts.

Yes, we all do already know this. That's not the question though. The question is why? Are the other vendors price gouging?

 

[Gadjobrinus]

I've wondered the same thing. In fact I just bought 5 lbs of the Baird's roasted barley from RB, $8.70 per 5 lbs, whereas Morebeer is $14.39, and NB is $16.35. With shipping RB is about $17, MB is $37 ($23 in shipping 5 lbs!!!), and NB is $34.

A bag of Warminster MO from Label Peelers is $88, $129 shipped. The same bag from NB is $140, and $189 shipped. NB is 1.6X the price of Label Peelers.

Gouging plain and simple, it seems to me.

 

[hotbeer]

It might be that they don't really want to try and compete on that particular item. If they lower their prices and sell more they'll have to warehouse more. And space in the warehouse might be more desirable to them for other things. Or for a any other number of reason they just don't chose to sell it at a lower price, even if they are able to get it for the same cost as RiteBrew

I don't see it as price gouging since you have the ability to use other less expensive retailers for that item.

 

[Gadjobrinus]

It might be that they don't really want to try and compete on that particular item. If they lower their prices and sell more they'll have to warehouse more. And space in the warehouse might be more desirable to them for other things. Or for a any other number of reason they just don't chose to sell it at a lower price, even if they are able to get it for the same cost as RiteBrew

I don't see it as price gouging since you have the ability to use other less expensive retailers for that item.

Well, strictly speaking, no, it's not gouging since they aren't using something like a state of emergency and inelastic demand to exact "unfair" pricing. And certainly we can choose whomever we want to buy from. But I can't agree it has to do with warehousing or competition on certain items. If you compare RB, item for item, to just about anything MB or NB sells for the same item, the latter two sell the same things for a massive markup.

It is what it is. I would like Baird's chocolate, for instance, and RB doesn't carry it but MB does. It's important enough to me to pay the premium and try to get my purchase up to the $59 threshold for free shipping. So, that's the market. Doesn't mean I don't consider them egregiously overcharging for the same stuff, when there is.

 

[BrewnWKopperKat]

I don't see it as price gouging since you have the ability to use other less expensive retailers for that item.

^^^ THIS ^^^

 

[huckdavidson]

It might be that they don't really want to try and compete on that particular item.

What items are they offering a competing price on?

If they lower their prices and sell more they'll have to warehouse more. And space in the warehouse might be more desirable to them for other things.

So they're brewing hardware retailers who just happen to sell brewing ingredients?

I don't see it as price gouging since you have the ability to use other less expensive retailers for that item.

Price gouging doesn't require a monopoly.

 

[huckdavidson]

^^^ ^^^ ... THIS ... ^^^ ^^^

It's still gouging. Price gouging doesn't require a monopoly.

 

[BrewnWKopperKat]

you have the ability to use other less expensive retailers

 

[Gadjobrinus]

you have the ability to use other less expensive retailers

Yes, of course (like I mention above). Guess it comes down to the definition of "overcharging" since if we're willing to pay because we want it over something else, cheaper - well, that's the market. Still....$139 v. $88 for the same bag of malt. Um....

 

[whoaru99]

I don't see it as price gouging since you have the ability to use other less expensive retailers for that item.

Yeah, to me whether one wants to call it gouging or whatever is immaterial. Buy it from the cheaper source and move on.

 

[huckdavidson]

Even if you have the ability to use less expensive retailers its still price gouging and it's a despicable practice.

Price gouging is the practice of increasing the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair.practice.

https://en.m.wikipedia.org/wiki/Price_gouging

 

[DBhomebrew]

Non-necessary item. Widespread availability of item through a variety of competitive sources. No demand or supply shock. Struggling to find how price gouging as defined by your Wikipedia link applies here.

 

[whoaru99]

It's still gouging. Price gouging doesn't require a monopoly.

You're correct. Gouging doesn't require a monopoly.

Price gouging is generally a term reserved for cases where the prices of basic necessities are artificially inflated after some sort of supply disruption, natural disaster, etc.

That does not seem to be the case here.

 

[huckdavidson]

Yeah, to me whether one wants to call it gouging or whatever is immaterial. Buy it from the cheaper source and move on.

Or stand up and say something. Whatever happened to that? See something that you know is blatantly wrong say something.

That's what I'm doing here. I'm calling out those retailers on their price gouging, profiteering or whatever term you'd like to assign to it.

Non-necessary item. Widespread availability of item through a variety of competitive sources. No demand or supply shock. Struggling to find how price gouging as defined by your Wikipedia link applies here.

Doesn't have to be a necessity at a specific time, that's just an example of when it normally occurs.

 

[DBhomebrew]

Yes it is. No it's not, because xxxxx. Yes it is. No it's not, because yyyyyyy. Yes it is.

Really, no it's not.

 

[Bobby_M]

Since everyone is weighing in, no this is not Price Gouging in the strict definition. I'm going to assume you actually want to know why you're seeing these different prices and that this isn't just a rant type of thread.

Northern Brewer, Williams and Morebeer have a free shipping pricing model and Rite Brew and some others like Brewhardware.com has an ACTUAL shipping model.

A free shipping model takes the item cost + markup + average shipping cost = retail price. The fact that a buyer doesn't reach the free shipping threshold has no effect on the price of the items because most customer DO reach that threshold and everyone pays for that.

Market research suggests that the vast majority of shoppers are fooled by "free shipping" even if a given vendor's total delivered price is higher than one that shows the actual shipping cost on the checkout page.

Here's why a company would NOT want to offer the free shipping model:
For one thing, as you've noticed, it just FEELS slimy as hell when you really notice it. Second, it slaps local walk in customers with a markup to cover costs they will never contribute to.

Here's a best case shipping scenario, like in state or adjacent state to NJ:

If I change the address to California, it looks like this:

If you want some extreme transparency, I'll play along.

The cheapest I can get Briess DME 3 pound bags is $7.39 with maximum volume discounts, not including the distribution of a couple hundred per pallet in freight costs. I have to personally, or pay someone to break the pallets down, check them in, put them away and update the website's inventory. It gets stored in a space that costs rent, heating and cooling, lighting, insurance. I pay $850 a month for the website. Visa takes 42 cents + 2.2% of the order cost. I have to buy boxes, packing tape, and pay someone to print the orders out and pack and label the box. Every step of this process is more cumbersome than it actually seems. You have to account for the calls when customers want to cancel an order or change an item. You have to account for lost boxes because all the carriers suck. You have to account for shipping clerk mistakes, when they ship a similar but wrong item. Sometimes the DME bag breaks open and makes a mess and things need reshipping. Sometimes the box ends up being an inch too big in one direction and it costs me $5 more than the quoted shipping cost.

 

[mashdar]

What is the proposed solution? A central authority setting DME prices?

And personally I wish people would increase prices during emergencies. You wouldn't believe the person that buy 100 gallons of gas and 96 sheets of plywood the day before a hurricane. Maybe if gas was $10/gal and plywood was $100/C-C 1/2" sheet, they would think twice and others could get some.

FL's anti-gouging law then made it illegal for Bubba to drive to Alabama and buy plywood to bring back and sell, further limiting supply.

In a perfect world a gas station would charge 300% or whatever and donate the excess. That way they're not making money on anyone's misery, and people think twice before hoarding.

edit: A worker at the local Ace Hardware threw a guy out one time for trying to buy every last gas can the day before a hurricane. I appreciated that.

 

[whoaru99]

Or stand up and say something. Whatever happened to that? See something that you know is blatantly wrong say something.

That's what I'm doing here. I'm calling out those retailers on their price gouging, profiteering or whatever term you'd like to assign to it.



Doesn't have to be a necessity at a specific time, that's just an example of when it normally occurs.

If you think you got something bring a lawsuit. Else buy at the cheaper place considering the total bottom line and move on.

 

[huckdavidson]

Second, it slaps local walk in customers with a markup to cover costs they will never contribute to.

And of course those who don't want or don't need to meet the minimum order amount for "free shipping".

Either way it's coercing the consumer into purchasing more than they may need and adding unnecessary markup to products.

Yeah it's definitely slimy. It's a scam and should be illegal.

 

[BrewnWKopperKat]

Or stand up and say something. Whatever happened to that? See something that you know is blatantly wrong say something.

That's what I'm doing here. I'm calling out those retailers on their price gouging, profiteering or whatever term you'd like to assign to it.

With regard to on line price shopping (for those of us who didn't have a locally owned local home brew store),

​

some of us have been​

​

politely​

​

mentioning lower cost alternatives to online stores that were more expensive​

​

for a number of years.​

Some of lower cost alternatives are HomeBrewTalk sponsors.

Some of the more expensive alternatives are also HomeBrewTalk sponsors.

Some of the more expensive alternatives have products that are not available in other online stores.

---

In a couple of my other hobbies, sponsors are more active in forum discussion. And those discussions often move the hobby forward.

 

[kartracer2]

Spit balling here,,,
Just "maybe" Rite Brew has an agreement with Briess or something. Also RB is only 50 mi +/- form Briess warehouse so less shipping cost to them? Maybe they self ship from Briess? Whose to say, as long as we have options to shop where we want, we win in my mind.
If a retailer is happy with their pricing structure why sell for less than the market is bearing? That would be dumb as they are in business to make money.
Bobby chimed in as was typing this and I think he pounded the nail rather well. I think they call it "COGS". All retailers are different.

Cheers,
Joel B.

 

[Gadjobrinus]

Spit balling here,,,
Just "maybe" Rite Brew has an agreement with Briess or something. Also RB is only 50 mi +/- form Briess warehouse so less shipping cost to them? Maybe they self ship from Briess? Whose to say, as long as we have options to shop where we want, we win in my mind.
If a retailer is happy with their pricing structure why sell for less than the market is bearing? That would be dumb as they are in business to make money.
Bobby chimed in as was typing this and I think he pounded the nail rather well. I think they call it "COGS". All retailers are different.

Cheers,
Joel B.

I do see they are Briess-heavy, and didn't know they were close, so that's interesting. However, I'm not interested in the Briess - see my post, it's significantly less on British stuff, too.

At the end of the day, no, nothing illegal and I agree, if, like myself, Baird chocolate is what I want, MB is selling it for a premium, and I go with it - we're both free to enter into this. Also, if for some reason any of us want to pay $50 more for the same exact bag of malt from NB v. RB, well, god help him but again, we all choose freely. No monopoly, no emergency on necessary goods, so, no, no gouging.

But yes, it pisses me off. My rant can only go so far if I choose to make the purchase.

 

[huckdavidson]

With regard to on line price shopping (for those of us who didn't have a locally owned local home brew store),

​

some of us have been​

​

politely​

​

mentioning lower cost alternatives to online stores that were more expensive.​

Some of lower cost alternatives are HomeBrewTalk sponsors.

Some of the more expensive alternatives are also HomeBrewTalk sponsors.

Some of the more expensive alternatives have products that are not available in other online stores.

---

In a couple of my other hobbies, sponsors are more active in forum discussion. And those discussions often move the hobby forward.

Because you don't think I already shop at these low cost alternatives?

It's more about calling them out and making the scam known.

NB even sends out discount codes which used to apply to ingredients but rarely do anymore. You have to buy their kits or hardware to get a discount.

 

[Bobby_M]

And of course those who don't want or don't need to meet the minimum order amount for "free shipping".

Either way it's coercing the consumer into purchasing more than they may need and adding unnecessary markup to products.

Yeah it's definitely slimy. It's a scam and should be illegal.

Scam is an extreme way of looking at a marketing strategy. Making it illegal smells a lot like communism.

The bigger the spend, the more likely there will be enough profit in the order to overcome the mountain of hidden costs that I've outlined. The term you're looking for is:

 

[huckdavidson]

If a retailer is happy with their pricing structure why sell for less than the market is bearing? That would be dumb as they are in business to make money.

Is the market bearing the price or are uninformed consumers being coerced into bearing shipping costs and purchasing more at the same time, shrinking the homebrew market. Homebrew ingredients used to be cheap. I mean cheeeeap.

 

[Bobby_M]

Spit balling here,,,
Just "maybe" Rite Brew has an agreement with Briess or something. Also RB is only 50 mi +/- form Briess warehouse so less shipping cost to them? Maybe they self ship from Briess?

Briess dabbled in being their own distributor for a couple years and the direct prices were 20% lower than their distributors had been and continue to be. The trouble I had was paying the inflated freight pricing all the way to NJ which negated much of the savings. Ritebrew was probably LOVING it at the time and my wild guess is that they were the one ecommerce retailer that worked out an ongoing deal. There is no way Ritebrew is getting their Briess products through a 3rd party distributor at those prices.

 

[huckdavidson]

View attachment 838401

Scam is an extreme way of looking at a marketing strategy. Making it illegal smells a lot like communism.

The bigger the spend, the more likely there will be enough profit in the order to overcome the mountain of hidden costs that I've outlined. The term you're looking for is:

View attachment 838402

Pretty sure I meant scam. It's dishonest at best unless spelled out for the consumer on their website.

 

[kartracer2]

Is the market bearing the price or are uninformed consumers being coerced into bearing shipping costs and purchasing more at the same time, shrinking the homebrew market. Homebrew ingredients used to be cheap. I mean cheeeeap.

My guess is you have never been involved in a business that had to deal with sales and marketing. They are not in it just for the fun of it, there is a profit motive at play also.
Go ahead and send those companies an email complaining about their pricing structure. I can already guess what the reply would/will be.
Thanks again @Bobby_M for sharing and trying to keep things in perspective.
Cheers,
Joel B.

 

[Bobby_M]

The free shipping pricing model is so ubiquitous that it's unreasonable for anyone to expect it to be spelled out. If you see "free shipping", you should already know that nothing is free and it's built in to the item price. Like I said, it feels slimy to me as a business owner. Calling it a scam or that it should be illegal is a very fringe opinion.

A "fraud" is telling the customer they are buying one thing and delivering another ( or not delivering anything at all). These are companies offering items at a listed price and you can either buy or close the browser window. There is no fraud.

 

[MaxStout]

You pay for shipping--either directly or baked in to the pricing. No such thing as "free shipping," it comes from somewhere--you.

Do this next time you shop for supplies:
Open several browser tabs. Go to various suppliers and populate the carts of each supplier with the items you need. Go to checkout in each. Compare total cost. You might be surprised at which one is the best overall. Sometimes the low price/paid shipping vendor is cheapest. Sometimes it's the one that's opposite. YMMV.

 

[huckdavidson]

The free shipping pricing model is so ubiquitous that it's unreasonable for anyone to expect it to be spelled out. If you see "free shipping", you should already know that nothing is free and it's built in to the item price. Like I said, it feels slimy to me as a business owner. Calling it a scam or that it should be illegal is a very fringe opinion.

A "fraud" is telling the customer they are buying one thing and delivering another ( or not delivering anything at all). These are companies offering items at a listed price and you can either buy or close the browser window. There is no fraud.

Keeping the shipping markups on items when the minimum free shipping amount is not met, is fraudulent IMO, maybe not according to law, however. Why should I be forced to pay free shipping markups when my order doesn't qualify for free shipping?

 

[Hoochin'Fool]

@huckdavidson nobody is "forcing" you to order brewing ingredients

But that said, it is a little maddening that if I wanted to purchase just a pack of US-05 (jebuz, for $6.49 ?!?), I'd have to further pay another $20 for UPS-GROUND to drop it at my house a week later, some 23 miles away. I thought I read somewhere that they were maybe going to allow local pick-up (tho no in-store shopping), but that was several months ago...

 

[huckdavidson]

@huckdavidson nobody is "forcing" you to order brewing ingredients

I'm not sure what voluntary or involuntary purchases have to do with fraudulent, coerced, manipulative or unapplicable charges on items.

 

[kartracer2]

@huckdavidson , I guess I don't see what is dishonest about it.
Also, RB has a another shipping option with "Spee-dee", it's regional, that requires them to rely on you to make a shipping decision. I think that "Spee-dee" is cheaper that UPS if you can use it. I'm thinking the rate @Bobby_M pays for package shipped by UPS for the same item going the same distance will be different than the big boys. (I could be wrong though)
It is harder to "bake-in" shipping when you have several options also.
Again, just spit balling here.
Cheers,
Joel B.

 

[mac_1103]

I'm going to assume you actually want to know why you're seeing these different prices and that this isn't just a rant type of thread.

Perhaps a not entirely valid assumption?

 

[Spartan1979]

I doubt anyone is going to change his mind.

 

[huckdavidson]

@huckdavidson , I guess I don't see what is dishonest about it.
Also, RB has a another shipping option with "Spee-dee", it's regional, that requires them to rely on you to make a shipping decision. I think that "Spee-dee" is cheaper that UPS if you can use it. I'm thinking the rate @Bobby_M pays for package shipped by UPS for the same item going the same distance will be different than the big boys. (I could be wrong though)
It is harder to "bake-in" shipping when you have several options also.
Again, just spit balling here.
Cheers,
Joel B.

Remove the free shipping markup from that packet of us05 and instead of $6-7 packet it becomes $2-3. What would you rather pay? If you don't need another $50-$100 worth of merchandise why pay the higher cost?

Ups and fedex have volume discounts. The more you ship the bigger your discount. The price you pay for shipping is marked up 20 - 60+ percent from what the large retailer nb, mb, etc pay.

 

[BrewnWKopperKat]

I thought I read somewhere that they were maybe going to allow local pick-up (tho no in-store shopping), but that was several months ago...

... and it may take several more months for something that is beneficial NB and Twin Cities home brewers to become public.

OTOH, if one is in the Twin Cities area and is a member of one of the local clubs that have a good relationship with Northern Brewer, it may be that "the future is now".