Maybe I missed this somewhere in all the words above.....did anyone mention 'the customer is always right'?

Marshalls Supply and Demand is a bunch of crap.... (sorry lack of a better term)

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Originally posted by Rockne:
Hi Shawn -

I agree that it's supply-and-demand, but I couldn't disagree more with the rest of your post.

One of the first things you learn in economics class is that the market works best when there is complete product and pricing knowledge.

Yes in a general sense, Classical Economic Systems in treating this theory, regard 'supply' as limited and 'demand' as unlimited, a thinking that has now been overturned, especially in today's knowledge economy. A stark example is the World Wide Web, where the 'supply' of information is seemingly unlimited, and the 'demand' or consumption of it is questionable.


And your right I could care less if fundraising comapnies go broke... but saying were going to lower quality because you ask more more ... already tells me they've thought about it... I'm the customer and this is how much I want, what I want, waht I need to raise... Change Or Die.. Survival of the fittest-You change to fit a customer(s) need.. not the customer changing to fit your need.. That is market Economics

[ 10-20-2006, 05:34 PM: Message edited by: Shawn ]

Hi Shawn -

I agree that it's supply-and-demand, but I couldn't disagree more with the rest of your post.

One of the first things you learn in economics class is that the market works best when there is complete product and pricing knowledge. When everyone knows what everyone else is paying and understands the quality and service of same -- then supply and demand truly takes hold (and best combination of price and service and quality wins).

For 7 years now, we (PTO Today) have been beating exactly the drum that Joe G is beating above: too many parent group leaders make very short-sighted (50% or else) pronouncements, and it's hurting the groups. It hurts the "good" companies in the industry (OK if you don't care much about that), but it also hurts the groups. Educating groups on why % is not the end-all, be-all when allow the supply-and-demand thing to work more effectively.

What happens? A couple of things.

1. First, Joe G is right that very often "something has to give" for the fundraiisng company to give you that 50%. Quality of merchandise may go down (your parents will support you less next year if you sell them crappy product this year); company may spend less on incentives (fewer/crappier incentives almost always mean fewer total dollars sold); company will raise listed price of products in catalog so they can give you the 50% (absolutely means that you will sell fewer items).

The focus should be on net earnings at the end of the fundraiser (% you get is a small piece of how you arrive at that).

Let's say there are two companies with exactly the same catalog of items. Company A charges $9 for the candles and calendars and organizers and ornaments in the catalog... and gives you 50% of each $9 sale... and does very little on the incentive/kick-off/service end. Company B charges $7 for those exact same candles and calendars... and gives you 40% of sales... and provides a major incentive program and kick-off.

There's a very good chance that you can make more with Company B. You'll sell a lot more candles at $7 than $9. Plus there's an extremely good chance that your service will be better and your parents happier (better value).

2. The second way this can adversely affect parent groups is that -- if we continue to make these short-sighted analyses -- then the good companies will be forced to take on these bad habits (demand), parents and parent groups will like FR even less, groups will often make less money... it's a downward spiral.

Definitely a soapbox issue for me. Focusing on 50% -- at the expense of all kinds of other (often more important) factors -- harms our groups. I really believe that.

Tim

PS -- The fundraising companies don't make billions. There's nearly 2 billion in total gross sales. The groups keep nearly half of that. And the fundraising companies -- with their less than 50% -- have to pay for the products, the flyers, the employees, the offices the ads in PTO Today (hopefully), yadda. It's a business, but there's a reason the Rockefellers and Gates' of the world aren't in it.

Guess well have to deal with it and its a supply and demand-- you supply we demand- if you dont change you'll be gone. Thats how a market driven ecomony works.

With less and less Edu funding the PTA/PTO' s need to maximize profit- The fundraising companies make billions of $$ your examples are much akin to the petroleum industies arguements- the consumer demands bang for its buck when co's are making BILLIONS In profit- how much is enough -YOU decide.

If the quality is lowered and % is not raised- we'll simply shop somewhere else.

None is doing this blindly

[ 10-20-2006, 03:57 PM: Message edited by: Shawn ]