What makes you say this is going into her profit? There’s a lot of competition in coffee shops, so if what you say it’s true there’ll be someone undercutting her.
It’s more likely that besides beans her other costs have gone up, too.
It also doesn’t make sense to maintain absolute profits instead of a percentage margin. Low margin means that you aren’t hedging as much against risk (if your stock is destroyed in a fire you have to pay the cost of the stock, which has increased) and aren’t paying yourself any more in the face of the rising costs YOU are paying every day.
I disagree.
Absolute profits would be the realistic option. The supplier is not adding to their profits due to the tariffs or whatever caused this, and the customer are surely as fuck also not getting more money.
She’s the only one in the chain that gets paid more when increasing her margin by percentages.
Of course there’s more to it than an example, and yes, someone else will be able to outbid her. The larger chains can easily do that while still maintaining their profits.
What makes you say this is going into her profit? There’s a lot of competition in coffee shops, so if what you say it’s true there’ll be someone undercutting her.
It’s more likely that besides beans her other costs have gone up, too.
It also doesn’t make sense to maintain absolute profits instead of a percentage margin. Low margin means that you aren’t hedging as much against risk (if your stock is destroyed in a fire you have to pay the cost of the stock, which has increased) and aren’t paying yourself any more in the face of the rising costs YOU are paying every day.
This idea does not adequately address reality.
I disagree. Absolute profits would be the realistic option. The supplier is not adding to their profits due to the tariffs or whatever caused this, and the customer are surely as fuck also not getting more money.
She’s the only one in the chain that gets paid more when increasing her margin by percentages.
Of course there’s more to it than an example, and yes, someone else will be able to outbid her. The larger chains can easily do that while still maintaining their profits.
Why do you not think the other links are setting their prices in this way?