Is the rate of inflation going crazy or what?

[RECHRGD]

OK, I've been retired for several years now.  When I was in electrical contracting if we tried to make more than a 15% margin we would not be competitive.  I called a landscaping contractor that we have used in the past to prune some small fruit trees that we have and just do some minor tune ups on some landscaping they did five years ago.  They wanted twice as much to prune the trees as they did just two years ago.  The other work I wanted done, I had figured would be around $1K.  He gives me a quote of about $3,700.00.  It would have been only one day of work for a couple of guys plus about 3 yards of gravel, 4 yards of bark and a two foot area of paver repair.  I said thanks but no thanks. 

[AKcharger]

I feel the same way. Usually I;
1) need something done
2) get an outrageous quote
3) Then I end up doing it myself.
 

I don't mind people making money but 50%+ profit after labour costs is a stretch

[JB400]

A lady I do work for on occasion got stuffed the same way a couple years ago.  She paid $120 to have leaves picked up and hauled off by her landscaper.  The next year, it was $260 for the same task and I still ended up hauling leaves off for her as well.  I don't know how much it was last year, but it was cheaper than the last year by a large margin.  For the record, she owns half a city lot, which explains the high prices.

[RECHRGD]

What really got me was, the estimator emailed me later and said that the boss could come out by himself on the weekend to do the trees for only 20 bucks more than the two year old price.  I declined, as I had a sour taste in my mouth at that point anyway. 

[moparjohn]

I'ts a tough game in a lousy economy. I'm in the same retail business for 26 years, and we see jumps in COST! of 5 dollars a bag on some pet foods, which we in turn raise to the consumer to keep a 22% margin or there abouts, A retail business like the one I'm in needs about a 34% blended margin to survive/ make a SMALL profit. Credit card companies take 4% off the top of each transaction, when your card does not swipe in our machine, after 3 tries, they charge us, if you hand punch it in, they charge us more again. EVERYTHING coming in seems to have a fuel surcharge OVER the normal delivery charge. Then people are buying less to cover your fixed costs over less income.So I'm not saying some businesses are overcharging, but the cost of doing business is increasing every day.  Then wait till we have to pay more for health insurance, taxes and so on.. I' don't know when it will level out or, ha, get better but I think it's the worst I've ever seen it.  I love my job, it' a very small lawn and garden, pet and feed store.  Very personal service, we all do eveything from sweep the floors to computer stuff and work as hard as we can to make people want to shop at our store. Whatever it takes I guess. John

[PocketThunder]

OK, I've been retired for several years now.  When I was in electrical contracting if we tried to make more than a 15% margin we would not be competitive.  I called a landscaping contractor that we have used in the past to prune some small fruit trees that we have and just do some minor tune ups on some landscaping they did five years ago.  They wanted twice as much to prune the trees as they did just two years ago.  The other work I wanted done, I had figured would be around $1K.  He gives me a quote of about $3,700.00.  It would have been only one day of work for a couple of guys plus about 3 yards of gravel, 4 yards of bark and a two foot area of paver repair.  I said thanks but no thanks. 

Try to get your friends and neighbors to stop voting for Liberals.  They are the destruction of our society.  And a Liberal is not just a (D), they are an (R) also, if all they try to do is spend tax payer money to get themselves re-elected.  But, RECHRGD, you are much older and wiser than I, so i feel your pain, hang in there man and have plenty of scotch on hand for times of emergency...   

[adauto]

I've been in business since 1984. margins are getting smaller and smaller. Moparjohns comments on the credit card thing are RIGHT ON! Folks think that all that bullcrap is free........ wrong answer. At least the durbin amend stopped the extra debit card fees. Bet most of you are not aware of that either.  It seems all the business people I talk to (when I ask whats going on ) all say one thing......... OBAMA! Around here were all cutting each others throats just to keep market share. He11 last year we ended -12% and this year so far has not been fun by any means. Only an idiot would price gouge in this economy. And you better be trying to improve your customer service at all times. I cant see how those guys will stay in business for the long haul.

[Mike DC]

   
Before Obama the name of the problem was Bush (unless you were drinking his cool-aid).  During Obama, the name of the problem is Obama.  After Obama, the name of the problem will be the next guy.  And the guy after that. 


Our economic situation has been building towards where we are right now for generations. 

 

[RECHRGD]

Yes, inflation has and always will be with us regardless of who may be in office.  Even though these guys were getting a bit greedy at my expense, the main point of my thread is the rate of inflation in just the last few years.  When I retired, I thought that I had positioned myself well enough that I would never have to worry about money again.  Now I'm not so sure......

[moparjohn]

So, we all blame who is in office, or the one(s) we don't like.  What can we as consumers/ retailers do to combat inflation?

[Mike DC]

           
IMHO there isn't much we can do except stay realistic with our views.


The public basically expects never-ending economic growth with no real setbacks (and votes accordingly).  Give them 8 years of growth with 2 years of stagnation, and they will be dissatisfied because it wasn't 10 years of growth.

That's not reality.  The earth literally is not big enough for it.  

   

[69CoronetRT]

Let's not confuse the cost of inflation with the increasing cost of doing business.

As Moparjohn said above...the amout of hidden fees, surcharges, administrative and regulatory costs incurred by businesses that must be passed on to the end user is what is increasing, not so much the rate of inflation of the same item year to year.

That $5 jump in the cost of a bag of pet food =

Increase in cost of EPA requirements at the production plant.
Increase in FDA requirements at the plant.
Increase in OSHA requirements at the plant.
Increase in the cost of natural gas used to make the food due to pipeline safety requriements.
Increase in local, state and federal taxes placed on businesses for property, assets and 'doing business'.
Increase in administrative labor costs (read healthcare et al) for the workers at the plant.
Increase in fuel surcharges (road taxes, environmental taxes) for the trucks that carry the food to the outlet.
Increase in administrative labor costs for the truck drivers, dock workers, and everyone that handles the bag of food.

It all adds up and has to be passed on to the end user.

[adauto]

Let's not confuse the cost of inflation with the increasing cost of doing business.

As Moparjohn said above...the amout of hidden fees, surcharges, administrative and regulatory costs incurred by businesses that must be passed on to the end user is what is increasing, not so much the rate of inflation of the same item year to year.

That $5 jump in the cost of a bag of pet food =

Increase in cost of EPA requirements at the production plant.
Increase in FDA requirements at the plant.
Increase in OSHA requirements at the plant.
Increase in the cost of natural gas used to make the food due to pipeline safety requriements.
Increase in administrative labor costs (read healthcare et al) for the workers at the plant.
Increase in fuel surcharges (road taxes, environmental taxes) for the trucks that carry the food to the outlet.
Increase in administrative labor costs for the truck drivers, dock workers, and everyone that handles the bag of food.

It all adds up and has to be passed on to the end user.

Now here's someone who understands how our goverment helps business!  

[RECHRGD]

Yes, all the added regulations and other costs are always passed on to the end user.  That would only affect the end user's pocket book.  The businesses would still make their margin of profit.  Now that so many companies have gone overseas to escape all the bloated costs of doing business in this country, we are losing the ability to be competitive except in a very localized market.....

[Mike DC]

  
I don't think the cost of business and inflation are so easily separated.  


Part of the reason that safety & environmental regulations go up is because methods of doing things get more advanced (and sometimes dangerous.)  When a new method of doing something brings in a new risk, people tend to complain about the increased safety/EPA costs as if it wasn't part & parcel to the whole picture.  There is also the ongoing learning about harmful effects of things that we just didn't used to be aware of.  

It is a lot easier to quantify a new costly rule than to quantify the accidents & environmental damage that didn't go on to happen.  The lives & environments saved are saving us money in other ways.  When people get injured & unhealthy it still costs the society a lot of money.  It's just happening much less directly & immediately than we feel the cost of an increased regulation.

I'm not saying the EPA & OSHA are blameless for increasing business costs, I'm just saying there are pros & cons of it and the financial effects go in a lot of directions.  



As for fuel, the big problem because the world overuses it.  Mankind currently demands a cubic mile of it per day.  Nothing is going to be cheap when you try to perpetually feed that kind of consumption rate.

[69CoronetRT]

Yes, all the added regulations and other costs are always passed on to the end user.  That would only affect the end user's pocket book.  The businesses would still make their margin of profit. 

Not necessarily. That assumes the financial burden is equal to all participants and all partipants pass on the increase equally.

If one business is impacted differently than another, the one that is impacted must lower margins in a competitive environment. If one contractor lives in a comunnity that has a tax increase that does not affect a contractor living in a different city, the first contractor must lower margins in order to be financially competitive with the second. If the first contractor just passes on the increase, his rates will be higher than the second.

[RECHRGD]

Yes, all the added regulations and other costs are always passed on to the end user.  That would only affect the end user's pocket book.  The businesses would still make their margin of profit.

Not necessarily. That assumes the financial burden is equal to all participants and all partipants pass on the increase equally.

If one business is impacted differently than another, the one that is impacted must lower margins in a competitive environment. If one contractor lives in a comunnity that has a tax increase that does not affect a contractor living in a different city, the first contractor must lower margins in order to be financially competitive with the second. If the first contractor just passes on the increase, his rates will be higher than the second.

Well, that actually was my point.  Just painted with a broader brush....

[Cooter]

http://pro.stansberryresearch.com/1302PSIEOA1Y/PPSIP385/

WARNING: LONG LISTEN...


We are Printing money to attempt to pay back our bebts at an alarming rate of $85 BILLION PER HOUR....With this logic, I can see why our way of life will go the same way of the Brits. For over 150 years they had a strong monetary value. Maybe the strongest in the world. Yet, they adopted the socialist ideals and now look.

Let's all bow our heads in a moment of silence for our country and way of life. May it rest in peace.

[Cooter]

I feel the same way. Usually I;


I don't mind people making money but 50%+ profit after labour costs is a stretch

Yet, Fuel was only a $1.25/gal just 12 short years ago.......Wait, how much profit is that again?

[Nacho-RT74]

trust me ... YOU DON'T KNOW what inflation is... I live 25-30% inflation by year ( being optimistic )

if we calculate the currency exchange, against the US$ in las 14 years, you can see

[Mytur Binsdirti]

Not that I'm advocating it, but if you could become part of the underground economy, a 30% gain in income will be realized.  

On a separate, but related note, I tell my kids that they should become barbers because:

1. It's a no-stress job.
2. You just have to rent a small hole in the wall and your working tools cost very little & last a long time.
3. Your biggest business emergency/crisis is that someone needs their hair cut.
4. When you close up shop for the weekend or go on a vacation, there won't be a slew of piled-up business to take care of when you return.
5. No one is going to bother you after hours with phone calls and emails.
6. Best of all; it's a mostly cash business.

[adauto]

That actually does make some sense. 

What always gets me is people who have never owned /ran a business (this goes even bigger for small biz) coming up with the way things should be done. 

[Todd Wilson]

The gubment just keeps creating more regulation. I am involved in 2 different industries and they just keep putting more and more regs out.  The entire tax code is out of control on business and the healthcare reform is only gonna add to it.    Price of energy is thru the roof. Electric and gas. An unfriendly party in office is making energy prices sky high which creates higher costs for business's and higher costs at home which means less $ to spend in the economy. Ethanol is a joke. Without gubment subsidies it would fail. It makes gas a few cents a gallon less. Makes you use more fuel then straight gas and raises the price of everything that uses corn. Thats anywhere from feed for meat type animals to corn syrup thats used for sugar in everything we eat. Doesnt take long to figure things out...............


Todd

[PocketThunder]

Food and Fuel is tied to the value of our dollar.  Since the feds are over spending a trillion dollars a year and the Federal Reserve prints more dollars out of thin air, the value of our dollar goes down and the price of everything goes up.  But most of you already know this.  Stop the out of control spending. 

[mauve66]

Yes, inflation has and always will be with us regardless of who may be in office.  Even though these guys were getting a bit greedy at my expense, the main point of my thread is the rate of inflation in just the last few years.  When I retired, I thought that I had positioned myself well enough that I would never have to worry about money again.  Now I'm not so sure......

they saw that fancy Charger in the garage and figured you were "good for it"