Great discussion. Couple questions and thoughts.
1. when the corn seed bag is discounted that comes
out of the margin of the retailer trying to get the
business on the higher volume. The royalty to
research is usually a set price per pound to the
breeding program in most crops. In corn most
breeding programs are either private or JV's so the
price per bag to the farm would not affect the
amount paid back to research.
2. what business do you know of that does not
provide cheaper prices on account of volume? Car
manufacturers have fleet discounts, airlines have
buyer programs, etc. Higher volume in supply
situations can mean higher prices. This is usually
based on as suggested above reciprocal business or
a constant supply.
The world is not equal and nor is it fair but in all
situations every farming operation has to make
those decisions on where they want to deal. That
decision can be based on price, service or whatever
i important to you. As a seed retailer I would be
foolish to say that everyone gets the same price no
matter the size of the order. But having said that
we do provide discounts to smaller orders as well
based on order time, pre pay and business loyalty.
We will never change the fact that the guy that
buys 1000 MT of fert is going to get a much better
deal than the guy that buys 100MT. Unfortunate
but reality. Its reality in many businesses.
1. when the corn seed bag is discounted that comes
out of the margin of the retailer trying to get the
business on the higher volume. The royalty to
research is usually a set price per pound to the
breeding program in most crops. In corn most
breeding programs are either private or JV's so the
price per bag to the farm would not affect the
amount paid back to research.
2. what business do you know of that does not
provide cheaper prices on account of volume? Car
manufacturers have fleet discounts, airlines have
buyer programs, etc. Higher volume in supply
situations can mean higher prices. This is usually
based on as suggested above reciprocal business or
a constant supply.
The world is not equal and nor is it fair but in all
situations every farming operation has to make
those decisions on where they want to deal. That
decision can be based on price, service or whatever
i important to you. As a seed retailer I would be
foolish to say that everyone gets the same price no
matter the size of the order. But having said that
we do provide discounts to smaller orders as well
based on order time, pre pay and business loyalty.
We will never change the fact that the guy that
buys 1000 MT of fert is going to get a much better
deal than the guy that buys 100MT. Unfortunate
but reality. Its reality in many businesses.
Comment