Cost of Heating oil; Cost of lumber?

[Charlie Self]

The reason you took a long time to understand "replacement cost" as a charge from dealers is because it is utter bullshit. I bought a briefcase the other day, and paid for it based on what the seller had paid, not on what the seller is GOING to pay for his next bit of stock. Once he gets the new stock in, the then raises prices.

Carpooling? Uh, I live in the country and work at home. Not effective. Actually, not possible. I use about one tank of gas every 2-1/2 weeks in my pick-up (Chev S10 gutless wonder). We probably use more in the car, but that's a 30 MPG Stratus (Dodge's ultimate POS). We time our town visits so when I need something, my wife does shopping, etc. Believe me, that's a royal PITA but probably will become more and more necessary as time goes on. I also don't zip into town for one item anymore, unless it is essential to the success of an article that is deadlined.

I may be back on a small motorcycle soon, though I quit riding when I moved down here 28 years ago. If there is still a 250cc road bike out there, or even off road, I might be able to up my 25-30 MPG vehicles to

55-60 MPG. I don't always need even a small pick up bed for my treks into town, nor do I need the extra space in a car to go to, for example, the library.

Yeah, all that said, I'll be heading to the truck terminals in Roanoke (about 35-40 miles away, call it 85 miles round trip) in a buddy's over-sized Ford pick-up to grab two jointers for an article. My truck won't handle the size or the weight, so I buy him at least 20 bucks worth of gas for that one trip. Probably $30 just to be nice.

[George]

The price is worth not skidding wood on my place, that's why I'm still buying, just a bit cheesed at the gouging.

This hauler brings, at my request, two or three cords of large stuff as lathe fodder. Paid the whole ten cords and more in turnings just last Saturday.

[George]

You charge people for work in your shop based on purchase price of the lumber, then go out and get replacement stock? You're a saint.

[George]

Even at today's prices, the average state/federal bite of $0.38 per gallon makes government the big winner when you fill up.

[George]

Lies, damned lies, and statistics again.

Profit margins?

Low-cost Chinese goods distort the CPI, then you go ahead and do it again.

[Charlie Self]

You are not exactly making a statement there. I charge for what I am using, or plan to use, based on current costs. I cannot charge for replacement costs, because I don't know if they'll be higher or lower...obviously, with gasoline in recent years, higher is the trend, but that's not true of everything, yet. The higher cost of transport and our totally asinine transport system has to catch up, sooner or later, with sooner being my bet.

But the fact remains, if I drive around town to see what others are charging for what I already have on hand before pricing something to a customer, then I'm putting myself in a strange position. I KNOW what I paid for it. I KNOW how much I need. I do NOT know what replacement cost will be.

As an incidental point, I didn't notice a damned one of these dealers knocking off a nickel or a dime when they could tell that tanker load prices were dropping a few months ago. Nope. They waited until the new product was in the tank before dropping the price. Funny thing. I figure it is a similar deal with raising prices.

If it isn't, it's no wonder no one respects businesspeople anymore.

[George]

Business is about making money. What you want goes under the name of charity.

[Charlie Self]

And that attitude is what is wrong with business today. I've been a small businessman since at least '68, and to date I haven't found it necessary to screw my clients out of the last dime in order to get by.

[Duane Bozarth]

I'm sorta' w/ ya' on this, Charlie, altho I understand the other as well...

Unfortunately, it's the distributors who control the pump prices (essentially, local markups are pretty competitive in most places) and they seem to be, as you note, very prompt in the up direction, not so prompt in the other...

I don't have data on what the refiners are doing (in the relatively few cases where they and the major distributors aren't the same)...I suspect the independents are following the big boys because they'd get crushed if they didn't.

[Duane Bozarth]

Charlie Self wrote: ...

Actually, for the most part it's more into they're getting into serious social engineering much earlier than we...

[Charlie Self]

What I was writing of was at the local station level. Go in Friday and see a truck filling the tanks, and an 8 cent increase on the pump. Go by Sunday, and see another 8 cent increase, and another on Wednesday, but the next truck doesn't arrive until that Friday.

That's neither distributor nor refiner. Just neighbor screwing neighbor out of a few bucks.

[Duane Bozarth]

Actually, if you were to investigate, you would probably find that each of those increases at the local station did reflect costs his distributor had just passed on to him...I know for a fact that's what happens here as I know two local re-distributors/retailer wells as well as knowing what we do on the driveway pumps at the local farmers' coop of which I am a member...

Here in this last week we got hit w/ two increases in one afternoon plust another the next day...

[Charlie Self]

Possible, though I'm inclined to doubt it. This stuff comes COD to the dealer (country store). He pays as soon as it's pumped into his tanks. That's it. No more to that transaction.

[Todd Fatheree]

If you'd like to give us the real figures, I'm all ears.

todd

[Duane Bozarth]

I'm still expecting he's getting notices regularly from his distributor and simply posting them at that time as are most other retailers...

[George]

The cost was X dollars per barrel. Dollar was a dollar. Adjustments are a fantasy based on conditions which did not pertain at the time. Of course, liars do figure ... when the outcome suits 'em.

Now the cost of a barrel of oil adjusted for 1897 dollars was ... meaningless! .

[George]

Not to mention his station has a contract with the distributor, even if it's not actually franchised from them, which specifies his rights and obligations.

[Duane Bozarth]

And those are written w/ a lot more "obligations" than "rights", for sure... :)

[Dave Hall]

I think Charlie is trying to say you should sell things based on what you paid for them, not based on what you are going to have to pay to replace them in the normal course of business. I disagree. If the wholesale price of gas goes up $.05, it is immaterial how much I paid for the gas currently in my storage tank, the real question is how much do I have to pay to replace whatever I sell to you at the pump. The difference between my current replacement cost and my current pump price is my real profit. Yeah, I wrote that as if I owned a station. I don't, but the concept is the same whether we talk gas, bread or houses. As an exagerated example, If you bought a house 20 years ago the price you would want to sell it for would have nothing to do with the price you paid, but a lot to do with what it is going to cost you to replace that house so that you still have a place to live.

Dave Hall

[Todd Fatheree]

Is the comparison perfect? I'm sure it isn't. But to say that the adjustments for inflation are meaningless is a lie. So, you don't believe any of the reports regarding a decline in "real" wages compared to 10 or 20 years ago either, right?

todd