explorerrowan:

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kagutsuchi-kun:

sirobvious:

mythiass:

tilthat:

TIL Walmart failed in Germany for a variety of reasons, including being convicted by Germany’s highest court of “predatory pricing” because their prices were too low

via reddit.com

I’m no friend to big business but please explain to me without using Keynesian economic theory on why low prices are a bad thing

When Walmarts enter a new area, they routinely set their prices impossibly low and sell products at a loss for the first few years, until all of the local non-franchise stores are unable to compete and driven out of business. Then, once ever other store in the town is dead, Walmart jacks up their prices.

Walmart can afford to do this because they are a global franchise and have a cushion of billions of dollars, but local stores owned by individuals can never afford to drop prices that low and sell at a loss.

Walmart is also a 328 billion dollar company which rakes in billions from federal subsidies, tax breaks and grants, yet they pay their employees pitiful wage slave pittances, so these employees end up having to go on food stamps and other protective benefits

So it’s a double dip, Walmart is basically the 21st century’s East India Company, it can only exist due to mercantilism and nepotism and would collapse anywhere else. Fuck Walmart

A child with an allowance of $10 a week who spent it on lemons and sugar: Lemonade for sale, a dollar a cup.

My niece, backed by me, an adult who can afford to buy a soda stream and a bunch of flavor packets and all without really feeling the cost, setting up a lemonade stand: Lemonade for sale, ten cents a cup.

A child who hasn’t sold any lemonade because his neighbor undersold him: Aww nuts, I didn’t make my allowance back and I spent all my money, I can’t even afford to make more lemonade *shuts down his lemonade stand*

My niece, seeing the neighbor boy go inside: Lemonade, $1.10 a cup.

Anyway if you’d like to read about how this works in practice please check out this 96 page writeup of Amazon doing this exact thing to Diapers.Com.

Barnes & Noble did this to most of the bookstore industry. Thing is, this model is and was always unsustainable, and Barnes & Noble is now in trouble. They’re not in trouble because of Amazon, contrary to popular belief. They’re in trouble because by bankrupting all of the other booksellers, the publishers were also bankrupted, and they destroyed the diversity of the publishing market. Publishing is getting more diverse now because small presses, vanity presses, and self-publishing are gaining traction via the internet, but publishing was a brutal wasteland through the ‘90s and ‘00s.

Monopolies fuck themselves in the end, but not before they’ve fucked everyone else, and that’s why they’re a problem.