Is he not 100% Right
kus234
Member Posts: 375 ★★★
Saw this just moments ago, I had the exact same thought when I saw the offers.
He is so damn right
https://youtu.be/9O_uvkWfiZw?si=JVD8CK7g6kSIRHHV
He is so damn right
https://youtu.be/9O_uvkWfiZw?si=JVD8CK7g6kSIRHHV6
Comments
Gotta be the dumbest content creator in all of mcoc
Gotta love the "It would be ok in 2021, 2022...
7* weren't available back then....
And this is supposed to be a journalist...
Costco doesn't have lower prices because they are in some sense rewarding customers for buying more, and it isnot just a question of volume alone. They actually have lower (per unit) prices because they are *forcing* customers to buy more. Time for advanced Costco economics 301.
First of all, Costco makes a ton of money on membership fees. You can find articles on the internet claiming that 70% of their profits come from membership fees, but that is a bit misleading. That assumes that all the membership dollars go directly to profits, while all the sales revenue goes towards paying all the bills. Which of course doesn't make sense: if the stores didn't exist, Costco couldn't sell memberships. The situation is more synergistic than that. But still, it is a lot of revenue.
Separate from that, Costco doesn't just sell stuff in bulk for low prices out of the goodness of their heart, or to reward the customer for buying in bulk. They actually do it for a very specific reason (or set of them). Costco came to the realization long ago that the problem with general retail is not profit per unit, it is profit per employee. An employee can only ring up so much stuff per hour. Think about how much time it takes for an Apple store employee to generate $10,000 in revenue, verses how much time it takes for the average grocery store employee. In the time it takes for an Apple store employee to ring up a customer spending several hundred dollars, a grocery store employee might ring up ten or twenty things generating about fifty to a hundred bucks in revenue.
You can make more money in two ways. You can sell more things. Or you can sell more expensive things. Apple sells more expensive things. But Costco is limited in what they can sell. They sell crackers and ketchup and hamburger. If they sell expensive crackers, they'd be Whole Foods. And if they try to just sell more things, they would have to hire more staff to ring up more things. Instead, they got clever and decided to sell bigger boxes of crackers, and larger bottles of ketchup. They *force* customers to buy twelve bucks of mustard at a time, and twenty dollars of pretzels, and a metric ton of Doritos. Every second a cashier is ringing up people at Costco, they are ringing up much more dollars per item, more revenue per minute, than at the average Walmart. Bulk is not just giving customers lower prices, it is working in Costco's favor to generate more revenue per employee.
This means Costco can afford to pay its employees more, which means they retain them more, which means they don't have to spend as much money on training. It is a very carefully integrated system where the customers are getting a really good deal (or think they are), so they are willing to spend money on memberships, so they want to make the most of those memberships by doing as much shopping at Costco, so Costco stays busy, so its employees are generating as much revenue as possible, so they can be paid more, so they stay with Costco longer, so they are more efficient employees, so they generate more revenue by selling more low margin items at high volume.
This wouldn't work in a video game, of course, because there are no similar fixed costs to scale around in the same way. There are no employees ringing up customers that game companies need to make efficient.
Are there situations where the price goes up as you buy more? Yes. Those out there who are or were stock traders would know, buying stocks is often like that. The more you buy, the higher the costs can sometimes get. That's because every stock buyer has a corresponding seller. When you buy a few shares, you are buying them from the people most willing to sell. But the more you buy, the more you have to buy from people less willing to sell, and who have a higher price point at which they will sell. So the more you buy, the higher the price can get.
This also happens in commodity markets, where buying very large volumes can increase the price. But it also happens in grocery stores in some cases. We've all seen it. Now on sale, regular $9.99, now $6.99. Limit five. In other words, the first five cost $7, but every one after that costs $10. Why does it cost more if you buy more?
Because the grocery store is using that sale price as either a loss leader or an advertised special to get customers in the door, hoping they will shop and buy other things. This strategy would not work if they consistently allowed the first few customers to buy out their stock, causing everyone else who arrives to discover it is all gone. That would have the opposite effect: customers would now tend to avoid that store if they always saw that happen.
In all three cases - stock prices, commodity volume purchases, and loss-leader grocery store sales - there is a common denominator. There's only so much to go around, and so the last one costs more than the first one. Price goes up as supply dwindles. But what does that have to do with a video game, where supply is infinite?
Because rewards in a video game are not infinite. The developers can make an unlimited number of anything, but doing so floods the economy with stuff and devalues everything. Infinite supply also means zero incremental value. Nothing is worth pursuing if everything is ultra plentiful. Forget about making money, it isn't even worth playing a game at all in which everything has unlimited supply.
So while video game resources can be copied infinitely, in practical terms every resource and reward has a soft limit on how much you can add to the game because every single thing you sell or award to the players devalues everything else by a small amount. There is a huge incentive to not have players buy everything in bulk, and no incentive to give bulk discounts. Price escalation is there to constrain what currencies can buy, and to what extent they can be concentrated into specific resources rapidly. And that constraint is there to fight inflation, to prevent devaluation, and to reduce the need to over-constrain in-game currencies which themselves provide more agency to the players.
None of this is me being an economic genius, by the way. This is all extremely well known stuff. Any economist would know this, any mathematician with any background in game theory (the "Beautiful Mind" kind, not the video game kind) would know this. Anyone who's studied video game economics, or for that matter Costco, would know this. I don't expect every content creator to know this stuff, or for that matter every university lecturer. But it is worth considering that I would expect this type of homework from a journalist reporting on a story.
Also, this ain't a Medium thinkpiece, submit your précis and move on.
Also it's not $100 for a 7star it's 125 for half a star
I've been doing this since 1985. What I've noticed is that there has never been a person who believes "type less" is an effective criticism that has had anything meaningful to say, nor sticks around long enough to string enough snippets together to accumulate into anything resembling credibility.
I use exactly the amount of words necessary to convey the meaning I intend to convey. The people unable or unwilling to read all of them are saving me the trouble of sifting through what will undoubtedly be otherwise meaningless retorts.
I will admit i was wrong in the pricing; but thats cause I find the video stupid.
Now you know how I feel about the Youtuber... I called it the dumbest mcoc content creator out there... Imagine how I feel abour the people who consume the content....