This Blog Posting was inspired by a News Article that led with this headline...
Car Dealer Markups Helped Drive Inflation, Study Finds
No chit, Sherlock. This news article and its headline make the Automobile Dealer sound like a bad guy because he is making money from the vehicles he sells. Has the author of this news article ever heard of Supply and Demand? I hope that uninformed author is reading this Blog Posting because I am going to try and explain Supply and Demand to him here and now...
Ø In recent years the Automotive Supply Chain (which the Automobile Dealer did not invent nor have any control over) malfunctioned big time.
Ø The Automobile Dealer is in the business of Selling Automotive Vehicles.
Ø Because the Supply Chain came apart big time the Automobile Dealer did not have Automotive Vehicles to sell.
Ø The Automobile Dealer had to raise his selling price on the dramatically limited number of vehicles that were available for him to sell.
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Hey, author of this news article, this is as good an example of Supply and Demand as you have ever heard of, or better said, as you have never heard of.
The News Article said, “Auto demand surged after customers got pandemic stimulus checks, while supply-chain snarls reduced supply. The sales prices for new cars skyrocketed. Much of that additional money went into the pockets of dealers, according to the research.”
Here is another No chit, Sherlock...The “additional” money
went into the dealer’s pocket! Oh my gosh! This Snidley Whiplash
masquerading as an Automobile
Dealer is actually putting the money from the vehicles he sells into his very
own pocket! How dare him! Someone has to put a stop to this putting money into
his very own pocket! A Federal Law needs to be passed requiring him to put the
money he takes in from selling his Automobile Vehicles into someone else’s pocket!
We need a Focus Group to determine whose pocket is most deserving of receiving this money even though this other pocket owner had no part in bringing the money to the point where it was pocket ready for putting. (Please forgive the prior sentence. I could not help myself.)
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A Fella Explanation...
Ø If automotive dealers do not order inventory from the manufacturer and they are on the point of running out of vehicles and they become uncompetitive in their pricing, they will go out of business.
Ø If the Supply Chain fails and all dealers are running out of vehicles they will all start charging more for the vehicles they do have and maybe they will all stay in business until they can get more inventory.
Dear Mr. Article Writer, the second bullet above is not the fault of the dealer. It’s called Supply and Demand. Google it!
Would I kid u?
Smartfella
