It's Too Expensive Here!

[citygirl]

This thread came to mind as I went to a shopping center today for the first time in forever. I stopped in at Paruolo where I used to buy shoes quite a bit back in 2007/8. At the time, I think they were generally around 400 pesos - let's say a bit over $100 USD. Expensive for sure for the time. Today, I looked at a pair of basic black pumps. 3400 pesos. 3400 pesos!! 300 USD. That's INSANE.

 

[Ceviche]

It makes more and more sense to do maximum shopping in US every year..if possible 2-4 times a year and just live in BA and pay for rent and vegetables/meat/cab/movie/eating out.

Amount of money spent in airfares worses amount of shopping u can bring in...is humongous.

 

[Noesdeayer]

citygirl :
That's not insane.It's just Argentine inflationary hedging mentality at work.Prices are not set taking into account real manufacturing,distribution and other costs.They are set according to what the retailer and supply chain feel they need or would like to hedge to both stay ahead of inflation and make an excessive profit margin..
There are definitely sectors of the local consumer market who will pay those prices without blinking.I remember being told by a client of mine in the '90s who worked with Macri's father," It's not elegant to bicker over retail prices when shopping".
.I also had one from Taiwan who told me that his brother who had moved to Canada from Argentina wanted to return because he missed the high mark up on grocery items.How do you change this sort of business thinking?

 

[camberiu]

citygirl :
That's not insane.It's just Argentine inflationary hedging mentality at work.Prices are not set taking into account real manufacturing,distribution and other costs.They are set according to what the retailer and supply chain feel they need or would like to hedge to both stay ahead of inflation and make an excessive profit margin..

A high risk business can only operate in a high margin environment. And running ANY business in Argentina is a high risk proposition. When a single labor dispute or a robbery can wipe out a month's profit, you have to run a high margin business in order to remain viable.

 

[rickulivi]

Sorry to disagree with Noesdeayer, but only non profits take into "[background=rgb(252, 252, 252)]account real manufacturing,distribution and other costs."[/background]

[background=rgb(252, 252, 252)]If you are a good businessperson, your pricing should be based on the most you can get away with that maximizes your total profits!!! In economic terms, you profit maximization point is where marginal cost equals marginal revenue. If it costs me $5 and you are willing to pay $25, why would I sell it for $10? And, if thru clever marketing, I can persuade you to pay $30, why not??? Why do you think marketers rely so much on sex as a selling tool? Or, why can you study for a Master's degree in luxury goods marketing? Because you want to learn how to make a product more desirable, and so you can charge a higher price!!!![/background]

 

[Noesdeayer]

I know about high risk and high margin invetment enviorment and also charging what the market will bear.
But in Argentina where one of the main concerns of the general population is inflation,What do we need to do --besides controlling gov't spending---to slow this inflationary cycle down.?
Are Walmart and the Chinese supermarkets the way to go?

 

[fcoulombe]

I heard that "willing to pay" argument. So did a poor country corner itself into paying more expensive than what they can spend?
The only reason I would ever pay 300$ for shoes is because there are no other options. But it doesn't make a lot of sense to impose this on a majority of people who can't afford 300$ shoes.

People are willing to pay until they can't afford what you're selling (or until they realize that they ve maxed out their credit card. )
With the current prices, it should be quick.

 

[fcoulombe]

http://www.numbeo.com/cost-of-living/city_result.jsp?country=Argentina&city=Buenos+Aires

Somehow we re still doing ok?

 

[camberiu]

I heard that "willing to pay" argument. So did a poor country corner itself into paying more expensive than what they can spend?
The only reason I would ever pay 300$ for shoes is because there are no other options. But it doesn't make a lot of sense to impose this on a majority of people who can't afford 300$ shoes.

People are willing to pay until they can't afford what you're selling (or until they realize that they ve maxed out their credit card. )
With the current prices, it should be quick.

That is the whole business model Paraguay relies on to survive: Serving as an intermediary for low cost Chinese goods to be smuggled and sold into the black market in Argentina, shoes included.

 

[FrankMontague]

http://www.numbeo.co...ty=Buenos Aires

Somehow we re still doing ok?

Question for locals: Do the numbeo prices seem up to date?