this post was submitted on 07 Nov 2024
1332 points (97.2% liked)

Microblog Memes

5846 readers
2369 users here now

A place to share screenshots of Microblog posts, whether from Mastodon, tumblr, ~~Twitter~~ X, KBin, Threads or elsewhere.

Created as an evolution of White People Twitter and other tweet-capture subreddits.

Rules:

  1. Please put at least one word relevant to the post in the post title.
  2. Be nice.
  3. No advertising, brand promotion or guerilla marketing.
  4. Posters are encouraged to link to the toot or tweet etc in the description of posts.

Related communities:

founded 1 year ago
MODERATORS
 
you are viewing a single comment's thread
view the rest of the comments
[–] [email protected] 33 points 2 weeks ago (1 children)

Without having more detail I can't speak with certainty, but, general principles of inventory management and cash flow discourage having a surplus of stock, as that ties up a significant amount of working capital in the costs of storing and handling it all - you risk not being able to pay your liabilities because you've sunk all your funds into inventory that hasn't yet sold and generated more revenue.

Companies often have longer term contracts with specific prices agreed that can't always be easily changed. Those contacts could quite easily become unprofitable if there are sudden increases to the direct costs of fulfilling them. So, rather than trying to fuck customers, this company is likely trying to stock-up at current market prices to ride-out the first year of tariffs, but in doing so, needs a large injection of working capital to cover the expenditure (hence cancelling bonuses), and also puts itself in a very vulnerable position where cash flow is concerned by tying up that capital in inventory - any further sudden and unexpected costs could lead to the business folding.

[–] [email protected] 3 points 2 weeks ago (1 children)

But that's not even the point of this. It's not the company is greedy or not, it's this administration is causing this.

[–] [email protected] 7 points 2 weeks ago

Oh I know. I was just trying to shed a bit of light on whether this company's decision was an attempt to take advantage and screw people over, or a genuine survival measure.

The root cause is ultimately the tariffs that will be imposed by the US government.

In reality the decision will be more nuanced, and this company will likely raise prices wherever it can whilst also securing long-term stock at current prices to both avoid the tariffs and increase margins to recover the capital quicker.

But yeah. It's all down to the government's tariffs.