Cynthetiq

Loss leaders are the give aways, I sell it at a loss knowing that i will gain profit via other markups.

That's how come Walmart can undercut some sales because they will sell something at a loss knowing you'll walk out buying something with a higher profit margin.

Easiest case to point out. XBox/Playstation. MS and Sony lose money each time they sell one of the units, but they make it up on the other side each time a game is made as it needs to have liscensing to run on their machines, so they get a piece of that sale.

aurigus

Many retail stores do this with "Door Busters" where they have free-with-rebate sales for example.

Anyway, I think my point is that there isn't any price fixing. The cost of gasoline is mainly shaped by the market.

kutulu

I understand what you're saying about the loss leaders Cynthetiq, but I think you have it backwards. The sodas are sold at huge markups. The soda, cup, ice, lid, and straw cost about 25 cents and they are sold for between $0.69-$1.19 depending on the store. At worst they make 176% profit and at most they make 376% profit. Candy, chips, and all the other stuff have huge markups too. The convenience store is the cash cow. Sure, they make a profit on the gas, but since they sell such large volumes, they put much lower markups on the gas.

About what raeanna74 said about the Alaska oil, I hope most Alaska oil is like that. I don't want to see us drilling there. It's a pure environment and I don't think we should ruin one of the last untouched lands in the country. Add that to the fact that it would take 7-10 years to really get things running up there and I don't see the benefit at all. In that time we should be able to develop other ways to supplement that oil.

We really should be giving biodiesel more of a look. Although it still makes pollution, at least it's natural and renewable.

iamnormal

http://www.eia.doe.gov/neic/press/press109.html
http://www.eia.doe.gov/oiaf/kyoto/kyotorpt.html

Cynthetiq

Right which is why there is always some sort of sale on 12 packs, milk, candy.. blah blah.. whatever. I just need to get you to pull up to my gas pump and fill up with my gas instead of the guy down the street. since the cost difference between competors is small but based on volume, then I need people to empty my tanks and then I can fill them up again.

for some people that difference in percieved sale price for the extra items is enough to draw some to go to a gas pump.

the best of course is to stop at the store buy the sale item and then go to the cheaper guy down the street

iamnormal that's very compelling but TOTALLY different than what you mentioned in your previous post. I don't know if you are just shy in typing, but good job, it would be even better if you gave YOUR input into it as well instead of a cut and paste, because I'm going to still take my thoughts as I read into this and filter it with them instead of seeing it from your point of view.

kutulu

ok, I guess I just misunderstood what you were saying. I thought you were calling the convenience store items low markup and it didn't make sense to me.

iamnormal

It takes me a long time to type up a post so Youll wouldn't be finding many long post by me.

What was totally different ?

BigGov

Wrong. Wrong. Wrong.

Gas stations make profits off of the items INSIDE. That is where they can actually mark items up. That is where they make a large majority of their money. Off candy, cigarettes, alcohol, chips, oil, wiper fluid ALL of which they can mark up and make a profit. That is the reason soda is so expensive, especially in remote areas, they know that people will be thirsty and would pay a price for some form of refreshment. That is where they make their money, not at the pump. The sales have identical goals to those of a grocery store, to get people in and purchase additional products.

__________________
One day an Englishman, a Scotsman, and an Irishman walked into a pub together. They each bought a pint of Guinness. Just as they were about to enjoy their creamy beverage, three flies landed in each of their pints. The Englishman pushed his beer away in disgust. The Scotsman fished the fly out of his beer and continued drinking it, as if nothing had happened. The Irishman, too, picked the fly out of his drink but then held it out over the beer and yelled "SPIT IT OUT, SPIT IT OUT, YOU BASTARD!"

Cynthetiq

right I am not disagreeing with that but SALE items are loss leaders. I sell at a loss to get you INTO the store.. read my previous posts.

Laugh!

Gas stations make less than 5 cents per gallon sold. They're not ripping you off. Actually, gas in the US is about 2-4 times cheaper than it is in Europe, so we are much better off.

Cynthetiq

when I did a google search on your carbon information I did not come up with the Kyoto treaty. thus what I found was VASTLY different than what you had envisioned I would have found.

I read...

http://www.physicalgeography.net/fundamentals/9r.html

BigGov

Hmm...I'm confused now as to everyone's position...

Bah, I've read so many posts in this topic are wrong economically, I give up. (Not saying you're wrong, I'm just too tired to go all the way back and read 10 posts all over again)

Aww hell, one more thing.

The whole vegetable oil thing doesn't sound real plausable to me. Yes, it works with a few people, now imagine the entire United States (which would not happen to begin with) demanding vegetable oil. Restaurants could sell it for a profit, the prices would be higher still, and I HIGHLY doubt our production of oil could satisfy the demand.

__________________
One day an Englishman, a Scotsman, and an Irishman walked into a pub together. They each bought a pint of Guinness. Just as they were about to enjoy their creamy beverage, three flies landed in each of their pints. The Englishman pushed his beer away in disgust. The Scotsman fished the fly out of his beer and continued drinking it, as if nothing had happened. The Irishman, too, picked the fly out of his drink but then held it out over the beer and yelled "SPIT IT OUT, SPIT IT OUT, YOU BASTARD!"

iamnormal

I was trying to get some what back on topic and you said you understood the carbon thing. So with you knowing how we efect the carbon cycle I posted on how that is efecting the price of gas with the link to Kyoto treaty.

Cynthetiq

understood, but you could have easily just jumped to they kyoto treaty because that was the crux of your point.

anyways, i look forward to more discourse from you and please don't be shy