Question of Ethics during the Hop "Crisis"

[etp777]

Reading Ed's response has given me a strange hankering to listen to some Clapton.

 

[Evan!]

I also think that it's important to step back for a moment from our skewed view of things and realize that the hop "crisis" is really not that much of an emergency in the grand scheme of things. This is a hobby, this brewing thing we do. I know, to us, the hop shortage seems like the end of the world, but it's not like you HAVE to have hops like you HAVE to have water and food and clothing. Hops are not essential for survival (though we all may think so).

 

[EdWort]

Down with the Capitalists. FREE BEER FOR EVERYONE!!

Alrighty comrade!

 

[Anthony_Lopez]

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 (as it is in this case). It's why, when you drive up route 1 between Paso Robles and Santa Barbara, there's like 2 gas stations, and you have no way to get across the mountains back to "civilization", so the gas stations charge twice as much for gas. The gas doesn't cost twice as much to make, does it? No. But its scarcity relative it its location and lack of competition serve to set the price that high. You wouldn't expect water to cost the same in the middle of the desert as it does in the middle of lake country, would ya?

If you have a basic understanding of economic principles you'll quickly realize that there has been no ethical breach here. On the other hand, if you're naive enough to think that a product should cost the same no matter where it's sold, then yeah, I guess it seems pretty unethical.

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.

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.

 

[Denny's Evil Concoctions]

This might be best solved with a swift punch to his head. Preferably while wearing a ski mask. It's not robbery if you don't steal nothin' (excuse the dbl negative).

Also hiring some hackers to hack his ebay account might be fun too.

But the most fun I think is to hire some unemployed college kids to protest outside of his store for week with those big ass protest signs. The protesting won't mean ****, but it would be amusing.

 

[Bobby_M]

He's setting prices and practices differently for two totally different markets. Many businesses with both retail and online presence have different policies. Locally, he's competing with other local home brew shops. Online, he's competing with other online businesses. Why not just buy from him on Ebay and ask for a local pickup?

 

[TexLaw]

When you talk about ethics, you talk about some duty to others, whether an individual, a group, or the public as a whole. This guy is one of a large number of hops vendors. Other than to obey the law, he has no duty to sell his hops or anything else in any particular manner. Typically, the only relevant legal obligations are to refrain from deceptive practices and maintain fair competition. There is nothing unethical about offering his hops in one manner at the store and another at eBay. Likewise, if he wants to change his mind and offer them differently tomorrow, he can do so. He has no duty to anyone to offer those hops consistently across venues (so long as he obeys the law).

There is no "price gouging" here. Actual price gouging is when a vendor raises prices for necessities during or in anticipation of some emergency that will decrease the supply or increase the demand of those necessities. Those necessities are along the lines of food, potable water, fuel, and maybe even something like batteries or portable generators. Those emergencies are along the lines of natural disasters or wars. No matter how homebrewers may feel about it, hops are not a necessity, and a bad hop crop or hop warehouse fire is not an emergency. Vendors are simply raising their prices in response to a decreased supply and increased demand. It happens all the time.

However, you are the consumer, and you can choose to buy those hops or pass. If you do not like the guy's practices, move on. That is your power.

This goes back to what Evan! said. More and more often, consumers expect that they should always be able to get what they want, how they want it, when they want it, and at their chosen price. More precisely, consumers feel that vendors have some duty to make goods available to the public at some "fair" (read "cheap") and consistent (or consistently decreasing) price. No such duty exists.

(Good heavens. Did I just agree with Evan!? )


TL

 

[blacklab]

When you talk about ethics, you talk about some duty to others, whether an individual, a group, or the public as a whole. This guy is one of a large number of hops vendors. Other than to obey the law, he has no duty to sell his hops or anything else in any particular manner. Typically, the only relevant legal obligations are to refrain from deceptive practices and maintain fair competition. There is nothing unethical about offering his hops in one manner at the store and another at eBay. Likewise, if he wants to change his mind and offer them differently tomorrow, he can do so. He has no duty to anyone to offer those hops consistently across venues (so long as he obeys the law).

There is no "price gouging" here. Actual price gouging is when a vendor raises prices for necessities during or in anticipation of some emergency that will decrease the supply or increase the demand of those necessities. Those necessities are along the lines of food, potable water, fuel, and maybe even something like batteries or portable generators. Those emergencies are along the lines of natural disasters or wars. No matter how homebrewers may feel about it, hops are not a necessity, and a bad hop crop or hop warehouse fire is not an emergency. Vendors are simply raising their prices in response to a decreased supply and increased demand. It happens all the time.

However, you are the consumer, and you can choose to buy those hops or pass. If you do not like the guy's practices, move on. That is your power.

This goes back to what Evan! said. More and more often, consumers expect that they should always be able to get what they want, how they want it, when they want it, and at their chosen price. More precisely, consumers feel that vendors have some duty to make goods available to the public at some "fair" (read "cheap") and consistent (or consistently decreasing) price. No such duty exists.

(Good heavens. Did I just agree with Evan!? )
TL

I'm on the side of the TexLaw.

Evan is throwing you eastside right now...

 

[Bobby_M]

TL, I felt the same way when I realized Evan and I now have some kind of agreement connection.

 

[Glibbidy]

I have seen similar situations with a particular used car dealer in my area. They have one price on the car sitting in their lot, and another on Ebay. Just keep in mind everything is negotiable.

 

[Dr_Deathweed]

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.

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

 

[Evan!]

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

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!”

 

[FlyingHorse]

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?

 

[Evan!]

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.

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.

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.

 

[Evan!]

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?

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.

 

[homebrewer_99]

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...

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...

 

[Dr_Deathweed]

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

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.

 

[Evan!]

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.

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.

 

[DeathBrewer]

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.

 

[Anthony_Lopez]

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.

 

[Dr_Deathweed]

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....)

 

[Evan!]

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....)

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.

 

[OblivionsGate]

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....

 

[Evan!]

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

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.

 

[bethlehembrewer]

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.

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.

 

[bethlehembrewer]

Damn everyone beat me!

 

[brewt00l]

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....)

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.

 

[Evan!]

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....

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!

 

[Dr_Deathweed]

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....

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.

 

[Dr_Deathweed]

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.

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.