"Short Wave Sportfishing" wrote in message
...
On Fri, 15 Apr 2005 15:13:24 GMT, "Doug Kanter"
wrote:


"Short Wave Sportfishing" wrote in message
. ..
On Fri, 15 Apr 2005 14:28:31 GMT, "Doug Kanter"
wrote:

Only the retailers who get piggish, and we will often refuse to buy more
from someone who is so greedy or inexperienced that they don't know when
to
stop.

Some years back, I believe it was P&G who took a customer to court over
the
diverting issue. The outcome was as expected. They were told that once
they'd sold something, the new owner (the customer) can sell it to
anyone
they want, or they can dump it into the ocean. As far as the allocations
you
mentioned, that's true, but often, they're totally disconnected from
reality. If P&G knows a chain normally moves 5 trucks a month, might
move
7
if they run an ad in the Sunday paper, they'll very often let them have
10
or 12 trucks. Who's the fool here? Give them 8, but not 12. They'll
sometimes suggest storing the extra product at the lower price, but at
the
same time, they'll spread rumors of a size or label change, and for
reasons
that make no sense, the chains think you and I (the retail customers)
give
a
damn about the label change, so they don't want to get stuck with it.

It's all silly.

So it's basically taking a product and turning it into a commodity?

Yes. Not much different than arbitrage, in the stock market. Chain "A" is
paying $12.00 for soap. Chain "B" is paying the "normal" price, $18.00. If
we can buy it from A for $12.75 and sell it to B for $14.00 or whatever,
it
works.

So to stretch the analogy a little, would it be possible to purchase
that soap for, say August delivery at $12.50, then sell that delivery
contract to whomever at $15?

Later,

Tom

Usually, no. Very few customers (people we sell to) are trustworthy enough
for that kind of thing. Most will cancel an order that far out, without
telling us, if a better deal comes along. We'll find out a few days
beforehand when the trucker tries to make the delivery appointment and finds
out the PO number is no good. We can always sell stuff somewhere, if that
happens, sometimes at a bit of a loss, but still, it's not a good day when
that happens.

My sister used to work for us, and apparently, it was her job to see how
quickly she could kill my father by scheduling long deliveries on products
whose prices are based on voodoo, like coffee and orange juice. She once had
a truck of coffee worth around $50k that she had to sell for a $10k loss
because bottom fell out of coffee prices. She was told not to do that any
more. :-)