So classes have started up and the first day my economy professor went around asking each person their names and if they had an economy question since the holidays just passed, being it's the busiest time of the year for buying and selling. So I asked why have the prices of items stayed the same or have gone up in some cases, with shipping and production costs much cheaper with lowered gasoline and diesel prices. He asked me what I thought the reason was. So I responded, "Because greedy people are...greedy?" He had a bit of a chuckle then told the classes to try and figure out a better answer than that for our first week's homework assignment. So anyways I'm trying to hunt everywhere to find specific reasons other than, "Greed is good."

The cost of Gas has not much/little to do with the price of shipping/cost of goods.

Suppose your shipping a truckload of product across the country and it cost $5000, the Gas itself might cost 500 - I guess know it would be a little less

but the products your shipping still haven't changed and are still worth the exact same. Consider the Iphone - cost 500+ each and probably 75% is profit - but the you gotta pay employees, rent, bills and still try to make a profit for yourself.

If you work out the cost per unit of an Iphone - probably only 10$ each is the price of shipping so over the xmas holidays now its like 1c per unit cheaper.

Also retail good price is also based on consumer demand as well - consider The Pet Rock - retail is 9.99, production cost is 3 cents another cent for shipping.

So the next time you go to an Apple store you can explain to them your theory about how those greedy bastards are overcharging you by 1 cent and why there is no one in the world that daily figures out the cost of everything each hour to determine "appropriate" retail prices for you.

This post was edited by card_sultan on Jan 10 2016 04:57pm

Gasoline has a very small effect of the shipping costs of carrier. Gasoline is actually usually an additional % or $ cost on top of actual shipping costs and isn't factored into shipping costs at all. If you interested in any more information regarding this let me know I'm the head pricing analyst at a carrier company and I could lend some insights into the actual variables that contribute the most to price.

Prices of raw materials are going up, price increase in electricity, prices of rent are going up, inflation, higher wages, R&D investments, Fixed Costs, and people need disposable goods, these are just some tips.

This post was edited by Diablokgb on Jan 15 2016 06:15pm

yup, just cause one thing is cheaper - there's still plenty of other greedy sob's out there to swallow up any break you get.

In all honesty ....

The claim of most companies has been fuel costs were driving up their transportation costs and in turn driving up the cost of sale end items. This was true to an extent. The other part was greed and excuse. The excuse allowed them to increase their bottom line greeddily.

Now, fuel prices are coming down. An immediate drop in transportation costs and sale end goods will not be immediately apparent for 2 reasons.
1. The cost of transporting goods already in play needs to be compensated before they can readjust market price based on transportation costs.
2. They are unsure of the trending of the market and its stability. They aren't sure there is a long term trend.

Now, be that as it may. If fuel prices settle at a certain level and do not continue to vary as such, you will see a trending, in general, of lower sale end items, somewhat. However, due to the fact they will wait long enough to adjust that you will become complacent with current prices, the adjustment based on their greed will not match the upwards trend at all. So, greed s a major part and so is consumer complacency.

We can blame the oil industry and their greed in general.
We can blame the transportation industry and their greed in general.
We can blame retailers and their greed in general.
But, for the most part, we need to blame ourselves for latent complacency and laziness. Today's consumer is the laziest i have seen in my entire life and the most complacent.

Bearing in mind these are only some of the higher mitigating factors involved. But, I stand by my statement, that today's consumer is the main mitigating factor over all.

Other mitigating factors, based on the sale end item, that are also into play as an affecting factor can be [not inclusive]:

Packaging/Labeling costs
Gathering/Equipment costs
Taxes/Tarrifs
Governmental controls and standards
Workforce availability and cost/Migrant workforce availability
Weather
Season/Time of year [Holidays]
Consumer demand
Crop availability
OBama-care
and there can be more or less factors involved based on the sale end item


The answer to your question can be a very in-depth and complex one and not necessarily a one word, blanketed answer. Another overlooked factor is you .... your fuel cost to go to work demands more money to get to work. Hence, you either cut back spending increasing sale end item loss and price increase or you demand a raise to make up for that cost increasing company employment costs, and in turn, increasing price rise to make up for it.

As you can see, it would take serious research and an extremely long answer to explain the query. And, again, it is also based on the individual type of sale end item.

This is a working-stiff, layman's answer to your query by someone with only a high school diploma.


Run that by your lib prof and see what he says.

This post was edited by luciferus on Jan 17 2016 09:46am