Selling price

“ The enterpriser must first decide what product he will endeavor to secure, and the kind, the place, the time, the quantity, and the quality. He must then select in the right proportion the materials, labor, plant, and machinery necessary for that product. He must purchase these factors in the market at the lowest price he can, unite them and sell the product to recover the expenses in the selling price. A thousand items enter into the cost and perhaps a single product emerges. What the business man thus pays out, expressed in money form, are the costs that are here to be considered. ”

“ The price in selling.—If we adhere to the principles of political economy, the price in selling is entirely free: it depends exclusively upon the agreement between the vender and the buyer, and as it is said, on the relation between the supply and demand. Nothing more unjust than the intervention of the law in commercial relations. If the buyer buys at such or such a price, however high, it is that he still finds it to his interest to buy even at that rate. ”

“ If, speaking broadly, and embracing somewhat longer periods, all descriptions of commodities sell at their respective values, it is nonsense to suppose that profit, not in individual cases, but the constant and usual profits of different trades, spring from the prices of commodities, or selling them at a price over and above their value. ”

“ The money price of an article at any given period is usually stated to depend upon the proportion between the supply and the demand. The average price of the same article during a long period, is said to depend, ultimately, on the power of producing and selling it with the ordinary profits of capital. ”

“ This is accomplished by a species of middlemen or factors, persons possessing some capital, who, whenever the price of any of the articles in which they deal is greatly reduced, purchase it on their own account, in the hopes of selling at a profit when the market is better. These persons, in ordinary times, act as salesmen or agents, and make up assortments of goods at the market price, for the use of the home or foreign dealer. ”

“ Now it is well known that under present conditions the retail price of any manufactured article comprises about one-third for actual cost of production, one-third for manufacturer's profits and accounting costs, and one-third for selling costs. In other words, every such article, when it reaches the ultimate consumer, is weighted down with a load of barnacles of trade-profits of innumerable middlemen, rents, dividends, cost of advertising, and other trade-getting devices, etc., etc. ”

“ It would not be difficult to show that they are not in conflict, but rather in harmony, with the theory of rent in making such a provision; for the tenants have sunk capital in the cultivation of land, which they cannot withdraw and offer for sale in the best market.
Again, the theory of rent assumes that tenants cultivate with a single eye to the sale of the produce in the market; for it is only by starting with the conditions determining the selling-price that we arrive at the establishment of differential advantages enjoyed by different producers, and the consequent existence of rent. ”

“ In competition the curve of selling prices tends to follow closely the curve of expenses, and consequently the areas of profits and expenses tend to bear the same proportion to each other at different points of increment in the trade. ”

“ The more of a particular commodity he has the lower his subjective valuation of a unit of that commodity; the more money he owns the lower his estimation of a dollar and the higher his subjective prices; and vice versa. Through a process of competition, selection, and adaptation, some of these subjective prices develop into market prices, that is, prices at which both buyer and seller benefit, and at which therefore an exchange takes place. To paraphrase an old adage, the proof of the market price is in the exchange. ”

“ Then there are the apple-merchants, with their fruit of all colors, from the pale yellow green to the bright crimson, and the baskets ranged in rows on the pavement before the little shops. Round these the customers stand examining the stock, then whispering together over their bargain, and counting their money. "Give you four shillings for this here lot, master," says a coster, speaking for his three companions. "Four-and-six is my price," answers the salesman. "Say four, and it's a bargain," continues the man. ”

“ On an upward market, perhaps, a higher price can be secured than the marked price. On a downward market or in order to move certain colors and styles, it is necessary to mark down from the original sale price. ”

“ If you really like the article, why not gratify the salesman by saying so. If you know that the price is in conformity to the usual rate, you need not attempt to get it lower, for you will seldom succeed—unless, indeed, on that day the tradesman is particularly anxious to sell, having a sum of money to make up, and being somewhat at a loss. ”

“ You know, Monsieur, that, in the stock-market especially, and more or less in every other kind of speculation, the greater part of the transactions are fictitious, to a certain extent. Par exemple: you buy or you sell so many barrels of flour, at such a price, on time, as it is called,—that is, you engage to receive, or to deliver, so many barrels, at the prices and in the times agreed upon, in the hope, that, before the period of your contract comes round, prices will have so varied as to enable you to buy, or sell, the quantity bargained for, upon terms that will give you a profit. ”

“ Or, on the contrary, the competition may cease before the value has risen in even the proportion of the deficiency. A rise, short of one-third, may place the article beyond the means, or beyond the inclinations, of purchasers to the full amount. At what point, then, will the rise be arrested? At the point, whatever it be, which equalizes the demand and the supply: at the price which cuts off the extra third from the demand, or brings forward additional sellers sufficient to supply it. ”

“ This seller has obtained for his commodity only the accustomed quantity of money, while there are already some things of which that money will no longer purchase as much as before. If, therefore, he knows what is going on, he will raise his price, and then the buyer will not have the gain, which is supposed to stimulate his industry. ”

“ To prevent abuses in the sales of these manufactures, their prices, which are determined upon a calculation of what they cost, and a certain per cent. added for the profits of the house, are marked upon the goods, and are never altered; and a regular account is kept of all, even of the most inconsiderable articles sold, in which not only the commodity, with its quality, quantity, an price, is specified ”

“ When the quantity brought to market is just sufficient to supply the effectual demand, and no more, the market price naturally comes to be either exactly, or as nearly as can be judged of, the same with the natural price. ”

“ The price is a consideration wholly for the vendor, and the value a consideration wholly for the purchaser. Hence it follows that both value and cost enter into a bargain, even when legitimately made. But value goes solely to determine the demand, and is solely cognizable by the purchaser or consumer—by him who receives; while cost (or burden) goes to determine the price, and is solely cognizable by the seller or producer—by him who renders. ”

“ Even if able to borrow, they meet it from the dealers to whom they are accustomed to sell their products. The prevailing gloom is as much a fact with which they must reckon as is the price of their raw materials, or the technical qualities of those raw materials. ”

“ In Re Cliquot's Champagne, Judge Hoffman defined the market value of goods to be 'the price at which the owner of the goods or the producer holds them for sale; the price at which they are freely offered in the market to all the world ”

“ Very often within sound of each other's voices traders are paying different prices for a good. On the occasion of a break in the stock-market, excited traders within ten feet of each other make bids that differ by thousands of dollars. Retail and wholesale merchants may be purchasing goods in the same room at the same time at very different prices. But within a group of buyers and sellers where competition is approximately complete, price is fixed with some degree of exactness. ”

“ Instead of one price, every one who had commodities or services to sell adopted a scale of at least four prices: “pay price,” “money price,” “pay as money price,” and a “trusting price;” and the seller, before fixing his price, invariably asked his customer how he would pay.6 “Pay price” was barter; “money price” was payment in foreign coin; “pay as money” was in the ideal money of the island; “trusting” was an enhanced price, according to time. Thus, supposing a customer wanted a knife, its price in “pay” would be a bushel of corn; in “money price,” a fifty-cent gold or silver coin ”

“ It will often happen that one dealer will make two or three times as much on his invested capital as his neighbors and competitors, and yet sell his goods to the public at a lower price, or, what is the same thing, sell better goods for the same money. ”

“ Demand and supply are kept apart from each other by the intervention of a generally prevailing error concerning the real price of the medium of circulation, and there must be, although only temporarily, buyers wanted by every seller, except the seller of money. ”

“ Each "supply curve" or "demand curve" rests upon the unconscious assumption of a price level already existing. Although the curves relate to a commodity, they relate to it only as compared with money. A price is a ratio of exchange between the commodity and money. The money side of each exchange must never be forgotten nor the fact that money already stands in the mind of the purchaser for a general purchasing power. ”

“ If there happen to be such plenty in the market on any market day that they cannot sell [Pg 39] at their own price, then will they set it up in some friend’s house, against another on the third day, and not bring it forth till they like of the sale. If they sell any at home, beside harder measure, it shall be dearer to the poor man that buyeth it by twopence or a groat in a bushel than they may sell it in the market. ”

“ But in the course of generations, with further development of trade and markets, this conception of price by degrees gave way to or passed over into the modern presumption that any article of value is worth what it will bring; until, when the era of handicraft and petty trade merges in the late-modern régime of investment and machine industry, it has become the central principle of pecuniary relations that price is a matter to be arranged freely between buyer and seller on the basis of bargain and sale. ”

“ If the supply, or present stock in hand, be entirely in the possession of one person, he will naturally endeavour to put such a price upon it as shall produce by its sale the greatest quantity of money; but he will be guided in this estimate of the price at which he will sell, both by the knowledge that increased price will cause a diminished consumption, and by the desire to realize his profit before a new supply shall reach the market from some other quarter. ”

“ On our markets a great amount of time is wasted by haggling over prices--the seller asking a ridiculous sum at first, and gradually bringing it down to a half or third of the original demand. But I noticed that the white man looked keenly at the article for sale, asked the price, carefully considered for a few moments and then stated the amount he would give, and the vender either assented to it at once, or picked up his goods and left.
There was one man, a stranger, who had a goat for sale. The white man examined it.
“How much?” he asked.
“Twenty-four fathoms of cloth,” replied the man. ”

“ You would have secured a much better bargain, no doubt, had there been twenty dealers in the room competing with each other, and a still better bargain had their number been fifty, or a hundred, or two hundred, because that would mean competition, and the more competition there is, in close contact and governed by rigid business rules, the more certain the approach to a perfect price. Everywhere in the world fairs and other gatherings of merchants are held at periodic intervals because people demand them in their effort to secure proper prices by competitive bidding and offering. ”

“ You can safely continue this rise in prices until you pay as much as you can sell for. This will give you the entire trade of the farmers, and the usual profits on all they purchase will be a net gain to your exchange, less the slight advance on the price of products, equal to the profits of the speculators. ”

“ Those who lived near a town were permitted to sell their products in the market place within the walls on condition that they sold directly to the consumers. They might not dispose of their whole stock to one dealer, for fear that if he had all there was of a commodity he might raise the price above a just one. ”

“ It is altogether a question of supply and demand. If dealers have ten copies of a scarce coin and twenty collectors want them, the price will go up. If, on the other hand, there is little or no demand the prices will go down. ”

“ The seller, with silken manners and brazen countenance, will always name a price four times as large as it should be. Then the real business begins. The buyer offers one half or one fourth of what he finally expects to pay ”

“ It is quite obvious that these things are of use, are, indeed, indispensable for production; what more natural than that capital should command a price? It almost seems as though we might pass, without further ado, to a detailed discussion of the forces which determine the amount of this price. ”