What Lower Prices Mean For Everyone

Sounds good doesn't it? Where else and at what time have we ever seen a situation like this? Lower prices, the holy Grail for every American consumer. People look for them, long for them, shop for them and surf the web for them. And here we are in the midst of an economic crisis and prices on some products has never been lower. Everything from computers to cars to houses to LCD televisions are going out the door at rock bottom prices.

Economics has a strange sense of humor doesn't she?

Prices are often at their lowest when too much inventory exists. Too much inventory exists often when people do not have enough money to spend. This leaves your vendors with little money, your customers with little money and ultimately your business and yourself with less money.

So as the economy has forced prices downward, is this a good thing for consumers or a bad thing for your business?

The question itself has some inherent flaws. The retail/consumer, wholesale/retail and the salesman/vendor relationship are all supposed to be symbiotic. What benefits one should benefit the other and so on and so forth down and up the chain. But in these crazy times nothing seems to be benefiting anyone on any level.

Lower prices mean lower margins, lower margins mean lower overhead costs, lower overhead costs mean less jobs, less jobs means less dollars and as stated previously, less dollars means more inventory and more inventory means lower prices.It's a vicious cycle with no clear end in sight. And we just seem to keep going in a spiral that leads down. While no one can see the bottom, the bottom line is, lower prices, for reason of too few dollars is bad.

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