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Old 12-28-2019, 12:15 PM
 
Location: Niceville, FL
8,058 posts, read 16,594,284 times
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Quote:
Originally Posted by SWFL_Native View Post
Because we need toilet paper, paper clips, and lots of bullets.
I tend to regard toilet paper as extremely inelastic as a broader category, though circumstances might encourage a downgrade from, say, Charmin to Great Value. To quote a great Can-Am tv show during an Apocalypse scenario:

Quote:
Some free advice? You ever get back there, you hoard toilet paper. You understand me? Hoard it. Hoard it like it's made of gold. 'Cause it is."
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Old 12-28-2019, 01:50 PM
 
5,986 posts, read 3,216,694 times
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Quote:
Originally Posted by beachmouse View Post
I tend to regard toilet paper as extremely inelastic as a broader category, though circumstances might encourage a downgrade from, say, Charmin to Great Value. To quote a great Can-Am tv show during an Apocalypse scenario:

I guess that is a good point to bring up is that possibly toilet paper as a whole is inelastic but a premium/luxury brand of toilet paper would be extremely elastic with the availability of close substitutes.


We should also go down the route of defining the differences between price elasticity & income elasticity.
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Old 12-28-2019, 02:15 PM
 
Location: Indianapolis, East Side
1,361 posts, read 692,961 times
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Quote:
Originally Posted by pittsflyer View Post
Why wouldnt everyone just produce things with very low market elasticity.

Wouldnt buisness have much lower probability of failure if people only produced low elasticity items?
Even when producing an inelastic good, you're still subject to competition in most cases. Once a drug goes off-patent, other companies can make generic versions of it. Charge a lot for your salt (a necessary nutrient), and other people will offer salt for sale.

In some cases, people will sooner or later make substitutions. The popularity of low-carb diets for instance, probably has something to do with the rocketing price of insulin.
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Old 12-28-2019, 03:08 PM
 
7,656 posts, read 3,367,239 times
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Quote:
Originally Posted by Thatsright19 View Post
Do you think it’s easier to compete in an area where the barriers to entry are high and the players in the position of strength can crush you like the cockroach you are by trying to come into their more profitable niche?
It depends on how you do it, how much debt you take on and if you have the passive income to subsidize the business until you can start swinging with full force. That's what I am doing now, you have to have the means to operate without debt or bills that rely on sales (have alternate income streams).

Once you have developed the capability you can post youtube videos showing what you can do and start getting bids against them.

But just starting the 15th pizza place, you think thats the winning idea? Unless your putting drugs in your food and charging $50 for the pizza I just dont get it.
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Old 12-28-2019, 03:13 PM
 
7,656 posts, read 3,367,239 times
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Quote:
Originally Posted by sheerbliss View Post
Even when producing an inelastic good, you're still subject to competition in most cases. Once a drug goes off-patent, other companies can make generic versions of it. Charge a lot for your salt (a necessary nutrient), and other people will offer salt for sale.

In some cases, people will sooner or later make substitutions. The popularity of low-carb diets for instance, probably has something to do with the rocketing price of insulin.
Insulin and gasoline are prime examples of inelastic as well as epi pens. why wouldnt people jump into these markets. Start a metal building somewhere and run the company through an over seas shell corporation and sell this stuff online and avoid all the regulations.

You could probably make an epi pen for $20 and sell it for $100 and undercut and since you have no overhead other than maintaining the fake buisness and the small lab at an undisclosed location you would have nothing but money pouring into an off shore account through pay pal.

Actually you would not even need a shell corp you would just need a off shore account to link pay pal account to.
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Old 12-28-2019, 03:40 PM
 
Location: Niceville, FL
8,058 posts, read 16,594,284 times
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Quote:
Originally Posted by pittsflyer View Post
Insulin and gasoline are prime examples of inelastic as well as epi pens. why wouldnt people jump into these markets.
I've had a couple relatives own gas stations. People are actually very price sensitive about the gas they have to buy and will drive miles out of their way to save pennies per gallon. The margins on that part of the business are quite terrible because of the competition (when you go up against Walmart/Murphy Oil, it's going to be scant pickings) and where you actually make your profit is on the convenience store mark up side of the business.
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Old 12-28-2019, 03:52 PM
 
3,008 posts, read 1,968,807 times
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Quote:
Originally Posted by beachmouse View Post
I've had a couple relatives own gas stations. People are actually very price sensitive about the gas they have to buy and will drive miles out of their way to save pennies per gallon. The margins on that part of the business are quite terrible because of the competition (when you go up against Walmart/Murphy Oil, it's going to be scant pickings) and where you actually make your profit is on the convenience store mark up side of the business.
Yep. You’re right. Extremely low margin. And I wouldn’t be surprised if it’s even a loss leader at warehouse clubs or grocery chains to get you “in the lot” to shop there weekly+.
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Old 12-28-2019, 04:12 PM
 
7,656 posts, read 3,367,239 times
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Quote:
Originally Posted by beachmouse View Post
I've had a couple relatives own gas stations. People are actually very price sensitive about the gas they have to buy and will drive miles out of their way to save pennies per gallon. The margins on that part of the business are quite terrible because of the competition (when you go up against Walmart/Murphy Oil, it's going to be scant pickings) and where you actually make your profit is on the convenience store mark up side of the business.
Im talking more about maybe a micro refinery and wait for the price of oil to decline and fill up tanks and refine specialty products along with gasoline.
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Old 12-28-2019, 04:57 PM
 
Location: Indianapolis, East Side
1,361 posts, read 692,961 times
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Quote:
Originally Posted by pittsflyer View Post
Insulin and gasoline are prime examples of inelastic as well as epi pens. why wouldnt people jump into these markets. Start a metal building somewhere and run the company through an over seas shell corporation and sell this stuff online and avoid all the regulations.

You could probably make an epi pen for $20 and sell it for $100 and undercut and since you have no overhead other than maintaining the fake buisness and the small lab at an undisclosed location you would have nothing but money pouring into an off shore account through pay pal.

Actually you would not even need a shell corp you would just need a off shore account to link pay pal account to.
Other players have entered the market and the price has come down.

Epipens are prescription medication and have to meet FDA regulations.

Health care in general is a terribly distorted market due to third-party payers and lack of feedback loops.
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Old 12-28-2019, 04:58 PM
 
Location: Indianapolis, East Side
1,361 posts, read 692,961 times
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Quote:
Originally Posted by pittsflyer View Post
Im talking more about maybe a micro refinery and wait for the price of oil to decline and fill up tanks and refine specialty products along with gasoline.
This is also a highly regulated market that would take a lot of startup capital and probably some political connections.
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