When business is slow raise the prices?

[fletchsmile]

@post #40

The problem with your premise is that while Asians have indeed been trading for thousands of years there are large differences between Asians.

Thais Indonesians Chinese Korean Japanese etc all have overlap in some values but have significant differences in others.

Generally Thai Thais have been agrarian by nature. For thousands of years farming has been key.

I d actually say that the race gap between Thai and cerain classes of Chinese is one reason the Chinese have dominated trade here. Go back only a few hundred years and merchants had nowhere near the power in Thailand they do today. Today the traditional Thai Thai farmer who is less economically savvy has fallen behind.

Bear in mind banking in Thailand is only a hundred or so years old.

So while the Asian premise is interesting Thailand is different as they say

I d say history counts against Thailand on this score rather than for it. That thousands of years doesnt apply to Thailands predominantly agrarian history.

Throw in the rote learning education system and copying and the aptitude for Thai Thai business acumen is less than many other races including some in Asia.

Not to say there arent some very intelligent Thais. There are. In general they simply dont have the history of other races in business economics banking trade etc

Cheers

Fletch

Edited September 2, 2014 by fletchsmile

[meand]

I think there are cultural differences in business here that are not very sound when viewed in an international context. The techniques work here, because Thailand has isolated itself to great extent. The competition just isn't there, which can be good and bad. Good for business owners and bad for consumers imo.

Anyway, here is what I think has happened. At the very top of Thai business culture, prices are by and large manipulated. I saw Lopburi post years ago something very astute (hope it's ok to paraphrase) "the prices on goods here are controlled largely by a few Thai families who do as they like and have a take it at that price or leave it attitude". I agree with that, and I think this permeates into the streets as well..... that is, charge what you want, and don't worry about anything else. I honestly can't believe the prices I see here sometimes, especially the market prices where anywhere else in the world are multiple times lower sometimes than supermarkets etc. Not here. It's like people paying no rent selling off the street think they can charge the same price as a supermarket that has rent and aircon bills. They get away with it, so the more power to them. The real point is how out of the ordinary these market prices are here vs the rest of the world.

Under those same guidelines, I think the quality of the average Thai product is also very substandard. It does not seem to be important to the consumer or the business owner. Again, this philosophy permeates from the top down to the bottom.

I find it a very difficult culture to figure out. Normally a high quality product, like amazing amazing pad thai will sell unbelievably well, and then other vendors will realize this and be forced to up the quality of their pad thai. What actually happens here however, is somebody makes terrible pad thai, and it sells out, so everyone else just makes bad, cheap pad thai, cutting every corner they can. I just don't see the customers as recognizing quality like I do in other countries.

Edited September 2, 2014 by meand

[AnotherOneAmerican]

I have had experience with this. There really is a science to it. I absolutely believe price points should be an evolving, amorphous animal. Maybe out of context, but I also don't believe in advertising price. It is ok to say something like "packages start at .....". If you are selling coffee or something this does not apply of course. You never want to rope yourself into a price though.

For my past business, when I would start getting booked with about the amount of business I wanted for a month or more, I would start raising my prices before that happens. This is why you can't advertise price. If I lost all my customers, a la the OP, yes I would be forced into discounts and promotions, which I hate because I like to cater to more high end clients in general. Give me one good client who does not think about money 24/7 over 10 cheap annoying clients any day. IT all depends on the business model though.

You have a permit to operate a business in Thailand?

If I were working here illegally, I wouldn't advertise any prices either.

Edited September 2, 2014 by AnotherOneAmerican

[meand]

I have had experience with this. There really is a science to it. I absolutely believe price points should be an evolving, amorphous animal. Maybe out of context, but I also don't believe in advertising price. It is ok to say something like "packages start at .....". If you are selling coffee or something this does not apply of course. You never want to rope yourself into a price though.

For my past business, when I would start getting booked with about the amount of business I wanted for a month or more, I would start raising my prices before that happens. This is why you can't advertise price. If I lost all my customers, a la the OP, yes I would be forced into discounts and promotions, which I hate because I like to cater to more high end clients in general. Give me one good client who does not think about money 24/7 over 10 cheap annoying clients any day. IT all depends on the business model though.

You have a permit to operate a business in Thailand?

If I were working here illegally, I wouldn't advertise any prices either.

No, I was just saying I have business experience with pricing. It was outside of Thailand. I will say that those same principles I learned (such as more people want my product, prices go up) may very well not apply here, that is for sure

[96tehtarp]

@post #40

The problem with your premise is that while Asians have indeed been trading for thousands of years there are large differences between Asians.

Thais Indonesians Chinese Korean Japanese etc all have overlap in some values but have significant differences in others.

Generally Thai Thais have been agrarian by nature. For thousands of years farming has been key.

I d actually say that the race gap between Thai and cerain classes of Chinese is one reason the Chinese have dominated trade here. Go back only a few hundred years and merchants had nowhere near the power in Thailand they do today. Today the traditional Thai Thai farmer who is less economically savvy has fallen behind.

Bear in mind banking in Thailand is only a hundred or so years old.

So while the Asian premise is interesting Thailand is different as they say

I d say history counts against Thailand on this score rather than for it. That thousands of years doesnt apply to Thailands predominantly agrarian history.

Throw in the rote learning education system and copying and the aptitude for Thai Thai business acumen is less than many other races including some in Asia.

Not to say there arent some very intelligent Thais. There are. In general they simply dont have the history of other races in business economics banking trade etc

Cheers

Fletch

I'm not at all disagreeing with you, although you may want to distinguish between Thais, and Thais. They are not all equal... you know? The inequality is one of the things which makes Thailand unique.

I witnessed a hilarious Asian food court in a very large western city's Chinatown. All businesses were Asian owned and Hong Kong Chinese were the majority by a slight margin.

The first shop opened and made a killing offering $4.99 eat in and takeaway lunchboxes. Seeing the success the competition came. Fast forward.... three floors in a mall packed with more than 50 shops doing exactly the same thing. Prices went down to as low as two for $1.99 on Friday afternoons as the shops wanted to clear out inventory and avoid spoilage. Fast forward again; A year, or two later, only three shops remained. Prices went back up to $5.99 later.

I think the real winners were the consumers, who on a Friday afternoon could buy an entire weekend's supply of food for less than the cost of the ingredients. The Taiwanese landlord made a killing on rent, and probably owned the first shop that started off the bonanza.

One had to see it to believe it.

[Kasset Tak]

Mama noodles made the same move, I think it was late last year or early this year. Sales down so we raise the price.

But I think it's a part of Thai mentality/culture! Some of my students asked if I could teach them extra on evenings and weekends, I asked for B 50/hour but they told me that it was to expensive. Now they are going to the city 20km away and pay B 200/hour instead...

So higher price is better because higher status... Thai psychology.

Edited September 2, 2014 by Kasset Tak

[Bcgardener]

Most Thai suppliers we deal with appear to be working to practices that are way out of date with today's shrinking world and the internet. A great majority of the material we purchase comes from overseas, mainly China. The local suppliers have always worked on extremely large profit margins while carrying little in the way of stock. Years ago this probably worked because people in Thailand had little choice but to buy from these suppliers. In today's world a few minutes on the internet and you can source products from all over the world.

[IMA_FARANG]

In any business, in any country, there are always FIXED COSTS in running a business.

That may include such things as rent for the location, electricity, just keeping the business open and the lights on, etc.

These expenses do not change, whether your business has many customers or none for that day.

Many Thai stall holders, and businesses such as restaurants and even hotels have such OVERHEAD expenses, and even if they want to in the off season they can not avoid these overhead costs.

When their revenue is low during the "low season", many business that rely on a regular daily revenue to meet these overhead expenses then MUST charge a higher cost per customer during the "low season" to meet their overhead costs ....or alternately close down during the "low season".

Being closed during the "low season" does not mean no operating expenses, even then there are basic maintenance costs you must meet.

Like it or not, that is " business economics 101" ..... the basic rules...... you need to follow to survive.

Edited September 3, 2014 by IMA_FARANG

[samran]

In any business, in any country, there are always FIXED COSTS in running a business.

That may include such things as rent for the location, electricity, just keeping the business open and the lights on, etc.

These expenses do not change, whether your business has many customers or none for that day.

Many Thai stall holders, and businesses such as restaurants and even hotels have such OVERHEAD expenses, and even if they want to in the off season they can not avoid these overhead costs.

When their revenue is low during the "low season", many business that rely on a regular daily revenue to meet these overhead expenses then MUST charge a higher cost per customer during the "low season" to meet their overhead costs ....or alternately close down during the "low season".

Being closed during the "low season" does not mean no operating expenses, even then there are basic maintenance costs you must meet.

Like it or not, that is " business economics 101" ..... the basic rules...... you need to follow to survive.

Say it ain't so. But what about bar stool wisdom? Doesn't that trump all this?

[Naam]

Most Thai suppliers we deal with appear to be working to practices that are way out of date with today's shrinking world and the internet. A great majority of the material we purchase comes from overseas, mainly China. The local suppliers have always worked on extremely large profit margins while carrying little in the way of stock. Years ago this probably worked because people in Thailand had little choice but to buy from these suppliers. In today's world a few minutes on the internet and you can source products from all over the world.

you can source easily but very difficult to import.

[Naam]

In any business, in any country, there are always FIXED COSTS in running a business.

That may include such things as rent for the location, electricity, just keeping the business open and the lights on, etc.

These expenses do not change, whether your business has many customers or none for that day.

Many Thai stall holders, and businesses such as restaurants and even hotels have such OVERHEAD expenses, and even if they want to in the off season they can not avoid these overhead costs.

When their revenue is low during the "low season", many business that rely on a regular daily revenue to meet these overhead expenses then MUST charge a higher cost per customer during the "low season" to meet their overhead costs ....or alternately close down during the "low season".

Being closed during the "low season" does not mean no operating expenses, even then there are basic maintenance costs you must meet.

Like it or not, that is " business economics 101" ..... the basic rules...... you need to follow to survive.

that is "101" for people who possess a wealth of no idea how to run a business.

[meand]

In any business, in any country, there are always FIXED COSTS in running a business.

That may include such things as rent for the location, electricity, just keeping the business open and the lights on, etc.

These expenses do not change, whether your business has many customers or none for that day.

Many Thai stall holders, and businesses such as restaurants and even hotels have such OVERHEAD expenses, and even if they want to in the off season they can not avoid these overhead costs.

When their revenue is low during the "low season", many business that rely on a regular daily revenue to meet these overhead expenses then MUST charge a higher cost per customer during the "low season" to meet their overhead costs ....or alternately close down during the "low season".

Being closed during the "low season" does not mean no operating expenses, even then there are basic maintenance costs you must meet.

Like it or not, that is " business economics 101" ..... the basic rules...... you need to follow to survive.

that is "101" for people who possess a wealth of no idea how to run a business.

I agree. If there are no customers raising your prices isn't going to work in many scenarios i can think of, in the long run anyway.

The way the airlines operate is interesting, and I think relevant here. I learned this only recently, but they will take losses on many of their flights, but then make absolute killings on others. Point being you just have to be prepared to take the losses. Raising the prices when there are no customers just isn't going to work. Lowering them may work however.

Edited September 3, 2014 by meand

[Bcgardener]

Most Thai suppliers we deal with appear to be working to practices that are way out of date with today's shrinking world and the internet. A great majority of the material we purchase comes from overseas, mainly China. The local suppliers have always worked on extremely large profit margins while carrying little in the way of stock. Years ago this probably worked because people in Thailand had little choice but to buy from these suppliers. In today's world a few minutes on the internet and you can source products from all over the world.

you can source easily but very difficult to import.

Have to disagree with that. It's very easy to import especially from Chinese manufacturers. There is an FTA between ASEAN and Thailand so no import duty on most things. If you ship by sea freight costs are next to nothing. Even air freight is reasonably cheap. If you are registered with Thai Customs for paperless entries then even that part is easy.

[samran]

In any business, in any country, there are always FIXED COSTS in running a business.

That may include such things as rent for the location, electricity, just keeping the business open and the lights on, etc.

These expenses do not change, whether your business has many customers or none for that day.

Many Thai stall holders, and businesses such as restaurants and even hotels have such OVERHEAD expenses, and even if they want to in the off season they can not avoid these overhead costs.

When their revenue is low during the "low season", many business that rely on a regular daily revenue to meet these overhead expenses then MUST charge a higher cost per customer during the "low season" to meet their overhead costs ....or alternately close down during the "low season".

Being closed during the "low season" does not mean no operating expenses, even then there are basic maintenance costs you must meet.

Like it or not, that is " business economics 101" ..... the basic rules...... you need to follow to survive.

that is "101" for people who possess a wealth of no idea how to run a business.

I agree. If there are no customers raising your prices isn't going to work in many scenarios i can think of, in the long run anyway.

The way the airlines operate is interesting, and I think relevant here. I learned this only recently, but they will take losses on many of their flights, but then make absolute killings on others. Point being you just have to be prepared to take the losses. Raising the prices when there are no customers just isn't going to work. Lowering them may work however.

You should look at Qantas' latest full year results, which are down the toilet. And they've got debt facilities with banks or the can issue their own debt. Most if not all SMEs are going to have that luxury, so there is no cash flow to support lowering prices. Edited September 3, 2014 by samran

[mikebike]

Generally Thai Thais have been agrarian by nature. For thousands of years farming has been key.

Go back only a few hundred years and merchants had nowhere near the power in Thailand they do today. Today the traditional Thai Thai farmer who is less economically savvy has fallen behind.

I d say history counts against Thailand on this score rather than for it. That thousands of years doesnt apply to Thailands predominantly agrarian history.

Sorry, are you actually implying that to be a farmer in a bartering, agrarian society requires no trading acumen? Bullocks I say.

Also worth noting that the survival of the Kingdom, since at least the Sukhothai period has been dependant on the Thai people's negotiation skills...

Edited September 4, 2014 by mikebike

[fletchsmile]

Generally Thai Thais have been agrarian by nature. For thousands of years farming has been key.

Go back only a few hundred years and merchants had nowhere near the power in Thailand they do today. Today the traditional Thai Thai farmer who is less economically savvy has fallen behind.

I d say history counts against Thailand on this score rather than for it. That thousands of years doesnt apply to Thailands predominantly agrarian history.

Sorry, are you actually implying that to be a farmer in a bartering, agrarian society requires no trading acumen? Bullocks I say.

Like the pun.

But if you cant distinguish between a thousand years of mainly subsistence farming vs making a living as a trading merchant and the different skill sets involved thats your call

Great traders and business peoples throughout history: Byzantines. Romans. British. Spanish. Dutch. Chinese.... and Thai farmers... you re definitely having a laugh...

[Asiantravel]

Generally Thai Thais have been agrarian by nature. For thousands of years farming has been key.

Go back only a few hundred years and merchants had nowhere near the power in Thailand they do today. Today the traditional Thai Thai farmer who is less economically savvy has fallen behind.

I d say history counts against Thailand on this score rather than for it. That thousands of years doesnt apply to Thailands predominantly agrarian history.

Sorry, are you actually implying that to be a farmer in a bartering, agrarian society requires no trading acumen? Bullocks I say.

Also worth noting that the survival of the Kingdom, since at least the Sukhothai period has been dependant on the Thai people's negotiation skills...

A propensity to always increase prices, irrespective of supply and demand or other market conditions does not imply they are skilled negotiators?

[mikebike]

Like the pun.

But if you cant distinguish between a thousand years of mainly subsistence farming vs making a living as a trading merchant and the different skill sets involved thats your call I can distinguish the fact that a successful non-nomadic agrarian must be a cultivator, a trader, and a defender, whereas a trading merchant requires only one skill. I'll go with the multitasker!

Great traders and business peoples throughout history: Byzantines. Romans. British. Spanish. Dutch. Chinese.... and Thai farmers... you re definitely having a laugh... Yeah, it is easy to be a 'great trader' wen you are the dominant empire, or in the case of the Spanish and Dutch, have an imposing military armada to 'lubricate' the wheels of trade... See present day USA as an example. History will record the good old USA as the 'great traders' of the 20th century. But are they really an better at it than the Arminians? No, just more militarily, and therefore economically, dominant, as in your examples above.

[mikebike]

A propensity to always increase prices, irrespective of supply and demand or other market conditions does not imply they are skilled negotiators?

Your propensity to use the term 'aways' above does not imply that you have fully comprehended this thread.

[ableguy]

Just like I thought. You're spinning sh!t.

Think what you like.

We are discussing here a thing many people including me have noticed many times over many years. You come on here in a kind of Thai apologist mode (in character) and assert this thing doesn't happen. That isn't the topic. The topic is why it DOES happen. Not going to play games providing "evidence" to someone who doesn't accept the premise of the thread in the first place. What difference would it make? If I told you a specific story, and I could tell several, of local businesses doing this and then dying, you would just call me a liar anyway ... because your apologist bias is so evident.

So I won't bother.

Cheers.

Oh, you've pulled out the T.

Please go find where I've acted as such. Go on.

Girls take a bloody break will you.