Inflation ...

[crankcall]

A "predatory tactic" that seems to be particular to Walmart:


... YEAH, this is the way forward.

Not particular to Walmart, try being a supplier to CTC. They will have you custom package to fit their display, increase your sales , have you increase production to 'fit demand' , then show you what they can source in Asia. Or Home depot, or Target.
Walmart who was not in the grocery business 20 yrs ago, now sells more than the three largest Ontario chains. For everybody that hates them , somebody enjoys saving an average of 12% .
Squeezing vendors, squeezing employees, having managers work 60hrs a week to stay "manager" . Once you have that power to weight ratio, EVERY giant company does it.

In an inflation gone kooky market , 12% is a solid advantage.

I'd say our unemployment numbers are always a bit skewed, a lot of people used covid as a retire early step. But they take EI for a few months. Lots of younger people (my friends kids) sat home at moms house and smoked weed and collected CERB then the CRB. And lots of people picked up landscaping gigs, drive a mower for cash. Set up a window cleaning business, ladder, windex, car with rack (moms subaru) and your in a cash business. And you stay on the unemployment list.

 

[Dimitri]

So what happens in sept when 600,000 CERBers lose their free ride and must go back to work to feed themselves? The scales tip and labor supply exceeds demand.

CERB has been over for a long time. While CRB only applies to those not capable of collecting EI or any other benefit. Mainly self employed or contractors.

But keep blaming a program that ended in October 2020.

 

[nobbie48]

A "predatory tactic" that seems to be particular to Walmart:
You decide to sell at Walmart. Seems like a good idea, great exposure, almost guaranteed sales, easy logistics, etc etc.
Walmart agrees to stock and retail your widgets at a wholesale price to Walmart of $20.
Then Walmart tells you they can increase sales by 10% if you drop the wholesale price to $19, this means increased production. You have to hire a couple of bodies.
All is going well, Walmart says "if you can drop the wholesale price to $17, we'll take 50% of your production.
You can swing this. Less paper work, less shipping, less packaging... less profit per unit. So YEAH OK let's do it.
Now Walmart comes back with "now we have 50% of your business you drop the wholesale unit price to $14 or we stop buying".
Got ya' by the short and curlies.
... and the ONLY way you're gonna do $14 is to move production offshore, and compromise the quality of the widgets.
US loses another small business, that pays taxes, a bunch of people lose their jobs, that used to pay income tax, your suppliers lose you as a customer....
There is Walmart and the Snapper company.

... YEAH, this is the way forward.

It isn't just Walmart.

Friend of friend thing way back and he made furniture, coffee tables and end tables, selling to small furniture stores. He was turning cartwheels when he got a call from, I think, Sears saying they were interested in handing his line.

The offer from Sears wiped the smile off his face. To sell at a competitive price they needed 20% off the price he was selling to the small stores. He had to ramp up production. He got paid in six months. If the line didn't sell he got them all back at full credit including damaged ones.

A guy from the flying club had a similar experience with his line of paint prep products. He'd get high volume with decent profit but found that other suppliers ran the same problem. Volume meant expansion and once that happened prices were slashed and controlling interest had to be sold to to the customer to balance the books. The "Owner" became an employee with profit sharing.

 

[油井緋色]

Ok. I’ll go tell that to my buddies who were trying to hire during CERB.
Employer: coming back to work?
Employee: no I’m scared of COVID so I’ll stay home to keep me and family safe
Employer: OK
Employee: well I could do it if you pay me cash

Mind you it’s only 2 or 3 diff companies I’ve heard this from.

There will always be people that abuse the system. Same as the EI guys who work cash while collecting their EI cheques.

Total 100% myth. Small sample, but it happens.

I know a lot of Chinese businesses who pay people in cash. Aka. I know exactly what you're talking about.

It's not racist of an Asian is pointing out a generalized observation right? lol Kinda wish we lived in a society where it didn't matter who states the observation, but instead the accuracy of the statement is judged instead.

 

[nobbie48]

I read an analogy on marketing where the writer compared business dominance to war. The little guy hasn't a chance to go head on with a major force. He has to practice guerrilla warfare. Be able to get in and out fast. Don't get big enough to attract attention. A lot of those opportunities are gone.

A generation or so back a guy could fabricate windows with a table saw, shaper, glass cutter and putty, making a living in the general market. Now one needs extrusions, sealed units and the equipment to work the materials.

The guy with the table saw has to go after the champagne market making windows in a market too small for the vinyl guys. A lot of the specialty stuff is computer driven so the skill set can't be 1950's.

 

[Mad Mike]

I know a lot of Chinese businesses who pay people in cash. Aka. I know exactly what you're talking about.

It's not racist of an Asian is pointing out a generalized observation right? lol Kinda wish we lived in a society where it didn't matter who states the observation, but instead the accuracy of the statement is judged instead.

I met a crew like that 2 weeks ago. We hired a company from Markham to move some furniture between offices. One of the fellows was an laid off aircraft mechanic, he was on CRB and collecting 18/hr 60 hours a week cash as a mover.

 

[Mad Mike]

It isn't just Walmart.

Friend of friend thing way back and he made furniture, coffee tables and end tables, selling to small furniture stores. He was turning cartwheels when he got a call from, I think, Sears saying they were interested in handing his line.

The offer from Sears wiped the smile off his face. To sell at a competitive price they needed 20% off the price he was selling to the small stores. He had to ramp up production. He got paid in six months. If the line didn't sell he got them all back at full credit including damaged ones.

A guy from the flying club had a similar experience with his line of paint prep products. He'd get high volume with decent profit but found that other suppliers ran the same problem. Volume meant expansion and once that happened prices were slashed and controlling interest had to be sold to to the customer to balance the books. The "Owner" became an employee with profit sharing.

Dumb business man. A dependable business runs off a plan, not opportunistic deals.

I had a specialty textile biz way back, I had exec connections at Walmart and fabricland, they could have tripled my sales overnight - but that meant my dealers would drop my lines. Careful analysts and planning told me I’d be in the same place but wrapped around the axles of those 2 companies - couldn’t find an upside that offset the risk so I declined.

When I sold the biz, the new owners went to Amazon, signed up and did a few cartwheels. Just about cost them their investment. 1 year later they went back to the original plan and are doing well.

 

[Mad Mike]

I read an analogy on marketing where the writer compared business dominance to war. The little guy hasn't a chance to go head on with a major force. He has to practice guerrilla warfare. Be able to get in and out fast. Don't get big enough to attract attention. A lot of those opportunities are gone.

A generation or so back a guy could fabricate windows with a table saw, shaper, glass cutter and putty, making a living in the general market. Now one needs extrusions, sealed units and the equipment to work the materials.

The guy with the table saw has to go after the champagne market making windows in a market too small for the vinyl guys. A lot of the specialty stuff is computer driven so the skill set can't be 1950's.

I think there is a place like that on 19th ave. Heritage wood windows made with CNC machines and tech workers. The cost a little more to make but sell at a 5x premium to folks with heritage restricted architecture .

 

[nobbie48]

I know a lot of Chinese businesses who pay people in cash. Aka. I know exactly what you're talking about.

It's not racist of an Asian is pointing out a generalized observation right? lol Kinda wish we lived in a society where it didn't matter who states the observation, but instead the accuracy of the statement is judged instead.

GST / HST is a windfall for the tax dodgers.

You need a house repair that is high labour content. Lets say $8 K waterproofing.

Pre GST, work on real property had the federal tax included in the material price and the PST was considered part of the contractors cost.

If you offered to pay cash the contractor might give you a few bucks back out of his profit, offsetting it by reduced taxes.

With GST /HST the price stays at $8K but he doesn't charge the tax. He makes full profit, tax free and you save a thousand dollars.

My market was high labour but I dealt mostly with corporations so cash under the table wasn't an option. I'm seeing a lot of small contractors being very up front in asking for cash.

Oddly enough I did a repair at a condo mostly inhabited by Chinese and the contractor paid me cash. He must have had a deal where he went door to door and asked for $50 a unit special assessment or he developed a slush fund.

 

[Mad Mike]

GST / HST is a windfall for the tax dodgers.

You need a house repair that is high labour content. Lets say $8 K waterproofing.

Pre GST, work on real property had the federal tax included in the material price and the PST was considered part of the contractors cost.

If you offered to pay cash the contractor might give you a few bucks back out of his profit, offsetting it by reduced taxes.

With GST /HST the price stays at $8K but he doesn't charge the tax. He makes full profit, tax free and you save a thousand dollars.

My market was high labour but I dealt mostly with corporations so cash under the table wasn't an option. I'm seeing a lot of small contractors being very up front in asking for cash.

Oddly enough I did a repair at a condo mostly inhabited by Chinese and the contractor paid me cash. He must have had a deal where he went door to door and asked for $50 a unit special assessment or he developed a slush fund.

Cash deals are illegals but may not be all that economically damaging. The arguments and explanations are complex, but in the great scheme they aren’t harmful.

They do give people something to hate or be jealous of.

 

[mimico_polak]

Cash deals are illegals but may not be all that economically damaging. The arguments and explanations are complex, but in the great scheme they aren’t harmful.

They do give people something to hate or be jealous of.

Have had some friends love getting paid in cash…until it was time to buy a house or anything that needed to show income.

If I ever do a side gig I’m not sure whether cash or legit is the better option….

paid for work
Add insurance
Add tax
Add WSIB
add add add add

There’s benefits to both. And I’ve done both. No complaints.

 

[油井緋色]

Cash deals are illegals but may not be all that economically damaging. The arguments and explanations are complex, but in the great scheme they aren’t harmful.

They do give people something to hate or be jealous of.

Well yea I'm a bit jelly when my salary is taxed to **** and given to freeloaders lol

Guess I should join a Chinese company next time.

 

[nobbie48]

Dumb business man. A dependable business runs off a plan, not opportunistic deals.

I had a specialty textile biz way back, I had exec connections at Walmart and fabricland, they could have tripled my sales overnight - but that meant my dealers would drop my lines. Careful analysts and planning told me I’d be in the same place but wrapped around the axles of those 2 companies - couldn’t find an upside that offset the risk so I declined.

When I sold the biz, the new owners went to Amazon, signed up and did a few cartwheels. Just about cost them their investment. 1 year later they went back to the original plan and are doing well.

I don't see where the furniture guy was all that different than your textile business. The risk of losing his established bread and butter customers if big box failed wasn't worth the risk. Opportunities should be looked at with caution. This was pre internet and the massive China onslaught. Covid lumber prices could have wiped him out as could a recession. One of the first things that people stop buying is furniture.

The solvent guy might have been able to contract out the volume surge and when the price structure crashed, drop back to his own operation. It would depend on the availability of low cost formulators at the time. A worry today is chemical restrictions suddenly changing.

Some people enjoy working a specific industry. They love boats, wood, welding or whatever and if it paid the bills and kept a roof over their head life was good. On the other hand I knew a guy that was in the business of making money. He mostly moved around in automotive, switching brands as the market changed. However if selling hot dogs became more profitable he'd have put carts on every street corner in Brampton.

 

[nobbie48]

Have had some friends love getting paid in cash…until it was time to buy a house or anything that needed to show income.

If I ever do a side gig I’m not sure whether cash or legit is the better option….

paid for work
Add insurance
Add tax
Add WSIB
add add add add

There’s benefits to both. And I’ve done both. No complaints.

I met a contractor that did a massive amount of cash. When he went to sell his business it wasn't worth anything because it wasn't generating any income. He was still likely ahead of the game but if he needed to expand his business the banks wouldn't touch him.

 

[mimico_polak]

I met a contractor that did a massive amount of cash. When he went to sell his business it wasn't worth anything because it wasn't generating any income. He was still likely ahead of the game but if he needed to expand his business the banks wouldn't touch him.

One of our acquaintances had a resort near Peterborough that he bought into with a group. Year by year he bought out each partner until he was left. Tried selling it for a year but since 80% of the business was cash he couldn’t find a buyer.

Until someone came around, loved it, bought it, and since it was a cash business he did a vendor take back mortgage (?) and now the new owner is on the hook to him for 25 years (unless he can get more legit financing).

So not only did he sell a good business, he now has a legitimate income stream from the mortgage coming in monthly. Guy skips a payment, he gets his resort back. Frak I’m an idiot for not having the nuts to pull those kinds of deal.

We’ve stayed there when he had it, and then again a few times with the new owners. What a difference. They really put their heart and soul into it and did an amazing job.