Comment by LorenPechtel
11 days ago
You have already gotten two answers showing why this causes the manufacturer to lose money. A third: I hike, enough that pretty much all my gear out there is the good stuff. I do not care one bit about brands and would prefer not to be an ad for the outdoor companies--but I am anyway because it's not just a name.
Suppose Big Brand X fails to sell all of this year's design and offloads them as discount brand Y. People like me don't want that big X on our stuff, if we learn Y is the same thing we are going to buy Y. And next year their sales of X drop because people like me waiting for the secondary stuff. Thus even if you do not consider brand dilution it's still in their interest to not sell the technical stuff in the secondary channels. When you produce quality a policy of not having sales or setting limits on sales makes a lot of sense.
> Suppose Big Brand X fails to sell all of this year's design and offloads them as discount brand Y.
Does that actually happen? What I see happening instead in the bike clothing market is that either after the season, or if a new design is to be unveiled after several seasons, the items gets heavily discounted (often more than 50%). It's just your decision if you need the most expensive newest items right now or you buy possibly older or out of season designs much cheaper. But the branding is also very much integrated, so it would be hard to change the branding on an existing item.
There are a few brands that try to limit this and keep the discounts in check like Assos, but that only means it's harder to find a heavily discounted item, still possible.
> When you produce quality a policy of not having sales or setting limits on sales makes a lot of sense.
Sure, if you can find customers that accept that, why not. In that case just manufacture fewer items.
50% discounts on technical stuff are basically only the very last ones that are unlikely to be your size. Real world, you're not likely to do better than 20% off. It's in the manufacturer's interest that I know it's unlikely I can find a better sale.
Note that I'm talking technical stuff, not designer stuff.
Am currently riding in an Assos winter jacket, midlayer and pants that were about 50% off and far from last pieces. Also a 7mesh winter jersey with 50% off but that was indeed last piece of that color.
This feels like the argument for why not deflationary currency. Said another way, I have a property worth X, but next year it will be worth more because money is deflationary. Why would I want to sell my house this year when I can wait until next year to sell my house and get more money.
That is inflationary. Goods costing more monetary units is inflation. In deflation same amount of monetary units buys more goods. So you would want to sell your house now if you have other options and then next year you could buy similar house and still have monetary units left over...
Deflationary currency is like a highway that you're allowed to park on. People will park their car on the highways and then charge you a fee to let you through.
>Said another way, I have a property worth X, but next year it will be worth more because money is deflationary.
Uhm, if money is deflationary, your house will be worth less than X denominated in the deflationary currency. This means if the money grows in value faster you'd sell all your assets as quickly as possible and replace it with a useless scrap of paper.
>Why would I want to sell my house this year when I can wait until next year to sell my house and get more money.
Again, if money is deflationary, you'd hold onto money and wait for house prices to drop with the aforementioned mechanic.
You might say this is appealing, but the problem is that your income depends on other people's spending and they have the same incentive as you do, which is to earn more than you spend. That's something that is not possible in aggregate, where total aggregate spending and total aggregate income must always be equal. This is a zero sum game purely mathematically and this is not a moral judgement but an explanation how the rules work.
When people follow the rules of the game, something weird happens. The promised outcome of a wealthy society from everyone being prudent savers doesn't emerge. The reason is as follows: If you have 1 million paper notes that represent the wealth of the entire nation and the value of the paper notes goes up, the represented wealth of the entire nation goes up, but the nation still has the same 1 million paper notes. No matter how much value people try to save in the form of money, they will still only have paper notes.
Those paper notes do not have intrinsic value and that is for a good reason. Giving the paper notes intrinsic value doesn't change the fundamentals, it just makes the tokens more expensive to produce. It's like having a golden toilet.
If money is worthless, then trying to give it non-transient value is a fools errand. Trying to say that a house is equally as valuable as a small bundle of cotton fabric is only acceptable for the purposes of accounting, but saying that the same bundle of cotton fabric (whose value is decreed) ought to buy more house next year is batshit insane. You couldn't come up with a better system to reward laziness and idleness.
Yeah, I had it swapped around. "Said another way, I have a property worth X, but next year it will be worth more because money is inflationary."