• 48 Posts
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Joined 3 years ago
Cake day: July 5th, 2023
  • Avid Amoeba@lemmy.catoTechnology@lemmy.world•'Knockoff' Browser Extension Hides Sketchy Brands on AmazonEnglish
    11·
    5 days ago

    aren’t people entitled to revenue of the brand they build?

    Perhaps no. Take the capitalist system at its best - the brief periods in an industry when a competitive environment delivers good products at low prices. That kind of environment means competitors can very easily start producing an alternative of what the other guy is producing and undercut their prices. This is the desired status quo that actually delivers wealth for most people. In such status quo, the firms that make things can only make as much money as to pay their costs and salaries with little leftover for shareholders. Conversely - the vast majority of society gets more things and has more money to buy more other things, instead of padding the pockets of shareholders. This is what competition is and obviously firm owners, large or small, don’t like it.

    The fact that we can’t make a whole lotta things in (Canada) without costing 3x what China makes it for is a separate but related issue. Personally I think it’s got a lot more to do with how much money Canadian firms make at various sides of the supply chains. People like talking abt cheap labour but Chinese labour isn’t nearly as cheap as it used to be and labour isn’t the main cost in a whole lotta things. E.g. in automotive, labour is 10-15% of the cost and if we assume free labour the Chinese cars are a lot cheaper than 15%. The rest is tools, machines, and parts like nuts and bolts. A Canadian-blessed machine screw set from my local hardware store costs $20. A significantly larger set from AliExpress (not the cheapest place in China) costs $2. This speaks to the profit margins involved in the two screw sets. Most of our industries have gone past their competitive stages and are now largely consolidated into 1 to several firms so they can extract significant profit margins. I think the avg for North American corpos is 10-15%. In China that’s about 5% and the state-owned sector which provides a lot of inputs operates as non-profit. Margins across suppliers for a product stack like compound interest and the price grows exponentially. If you have a product that starts at $1 at the beginning and you have 5 suppliers till the final product, you get $1.28 with 5% avg and $2.01 with 15% avg. If you have 10 suppliers you get $1.63 vs $4. The difference between the two is also exponential. The exorbitant profits of our industries make it not only too expensive to make things here, it makes it very difficuly to even attempt anything by people who don’t have significant capital.

    So yeah, the answer is def in-house manufacturing for more than one reason but for it to be viable, shareholders have to make less, a lot less. If we get to such a point, down to just the difference in price of labour, I’m pretty sure we’d be able to easily handle that. The state we’re in at the moment is def not healthy but I don’t think we’ll solve it by protecting shareholder value while keeping domestic worker salaries low - a reflection of the high margins. When margins go down, either prices would go down, or wages would go up, or both. Both make it possible for more people to buy the domestically manufactured product. In other words the in-house manufactured product won’t be 3x market price in real terms anymore.