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Hi boys and girls. I’m here today to talk to you all about money - yay!

So what does the dreaded M word mean?

Well I want to talk about our great high quality produce. We all enjoy CD’s, food, ornaments and all that other thing but what’s with the whole money thing?!

Here’s why the whole money thing:

Simply, You’ve got part A and B. easy enough.

+ Part A is the price of the materials and machines to make what ever it is you want, and the price for carrying it to give to you, materials.
+ Part B is the price for the time and effort someone took to make it, wages.

So why so much money? Because, ladies and gentlemen, it’s NOT that easy is it?

+ Due to big corporations the companies need to buy big warehouses and bigger machines to make more products, so that’s part C, expansion – fine enough.

Now it starts to get silly.

+ Part D is the price we pay just so someone else can take our products from where they were made to the larger multipurpose shops, transport.

+ And further part E is the extra price these big shops charge you so that they can pay for the transport and get their hands on some money too, commission.

Now this all sounds ok to most people. Price is a little higher so you don’t have to drive down the country to buy it from the factory it was made in, so what?

Parts F, G and H are ‘so what’.

+ Part F is when a shop will notice the customer trends and actually increase the price of products (usually disguising this with two for the price of three offers and supposed sales or by claiming a much higher recommended re-sale price).

+ Part G is for Government, or ‘Greed’. On all retail goods you have to pay tax (VAT), which then goes straight into the governments pockets. Now do we get to decide what that tax is spent on? No. Not besides voting on what government party gets to make all the decisions on spending.
Are the taxes from goods going to fund wars? Probably.
There is also import tax, the more valuable the item the more you have to pay to have it shipped to you. Why? If the price increases the shipping why aren’t they taking as much care with the low priced things? Because its more to do with the governments charging you money for bringing value into one country and taking value out of another.

+ Part H applies to bigger stores that charge for brand, quality and rarity – basically the labels selling power.

Part F, H and G contradict each other. As even the store has to pay the government so that they can work. So to counter the import tax for goods, the transport tax and the price of running the establishment prices increase some more.

Now some may be shouting “trading standards!” at the screen. Yes trading standards helps to keep the price of goods at an ‘acceptable level’ but bear in mind they are run by the government who still want the tax percentage from the products. Trading standards does mean one thing. If shops can’t increase their prices to combat taxes then they will have to reduce other payout’s – wages decrease with increasing tax so that the shops can meat their projected profits.


Example?

Ok I’ve got a good one.

A friend of my dad gave us a handcrafted pair of salad forks as a gift before returning home to South Africa. These were bought directly from South African farmers (who work on my dad’s friend’s land) and are hand carved from wood so the handles look like giraffes.

Lets say these things were bought for £2.

Now lets break it down into parts A-G for a product like this in our shops.

South African product. = materials and storage (a) £0.75 + wages (b) £1 + Profit (f) £0.25 = £2

English product = South African product (£2) + Transport to store & storage (d) £1 + commission (e) £1.50 + Demand (f) £1.50 + Import tax and shop fees (g) £0.80 + Brand/company name £1.50 + VAT (g) £0.20 = £8.50.

I’m trying to be realistic with this, and have seen handmade wooded cutlery going for up to £10 for something like this from Eu naturale and woodcraft shops.

Is this fair? No. What wages do the labourers get? About £1. If the labourers were in a company then the company would need to take some to sustain itself, and if it needs to pay to have its products sent to England then even less will go to the workers.

What would happen if you gave a South African farmer £8.50 for a hand-carved salad tongue? They would probably shit a brick.


More examples?

Advertising is all about concealing Part F and H, the profit sections.

+ One example is the high prices of Christmas decorations prior to Christmas; you’ll notice when it gets to a week before Christmas those £12 lights will probably be £6, and after Christmas they will probably be £4. Last year I brought myself a 6-foot Christmas tree, decorations and lights for £12 about a week before Christmas.
This is all about supply and demand, and to an extent at the end cutting losses by flogging goods.

+ Suppliers have picked up on customer fears too. The new Lenour advert sells by saying that because the detergent is more concentrated now it is in smaller bottles so will reduce the number of delivery vans on the road (this of course is a lie, delivery trucks will be needed for BOTH sizes of detergent at the same time, not to mention all the other products that are also shipped in the same van.). However ask yourself: If everyone buys this new smaller bottle, wouldn’t that mean they would need to make more, and so put more trucks on the road? Also why was it so watered down before?

+ Supermarkets often play the “claim our prices are cheaper” game with other supermarkets. But if the new adverts say “We’ve now got 3,000 prices lower than supermarket X” doesn’t that mean not just that supermarket X is cheating you out of money but also that the advertising supermarket WAS taking more money on 3,000 products than they needed to (and probably still is with hundreds of thousands of other products)?

+ Clothing stores are the worst for Label pricing. Some brands of shirt can cost £30+ where as a perfectly fitting, good quality shirt without the famous brand name will cost £5. Because the “regular” brands only make clothes to fit and do their job (hold you in, keep you in place, protect you from the elements, be practical and comfortable, and conceal you) often these name brands make their clothing different to the “regular model” which means probably being less comfortable and not really doing the clothes job (Thongs fit into this category as they don’t do any of the above). Another example of fashion overpricing is “boy fit” jeans in women’s shops go for £25+ where as men’s jeans in Walmart are £5, why don’t you just pay a fifth of the price?


AHH! What can we do?

The answer: nothing much.

There are fair trade products that give better wages to labourers and money to charities. But this doesn’t mean the company isn’t charged for import tax or that the products haven’t also got the added VAT for the government’s share of the profits.

Illegal products are cheaper but can be stolen or poor quality rejects from stores. Those willing to smuggle products are criminals and any money they make from stolen goods is due to their personal greed; no one wants to fund criminal organisations.

All we can do is try and take advantage of when the prices are low. Like going to wholesalers where you can buy 24 cans of Pepsi for the equivalent of 25-30p a can. Take advantage of the sales when you can but don’t let sale prices lure you into shopping somewhere out of loyalty when the prices go back up.

what do we learn?

Money sucks. Or rather the corporations and government inflating prices on necessary (and unnecessary) goods (like medicine, food and clothes) suck. It all comes down to greed.
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