Executives, shareholders, customers?

Question

Why is it that customers are the first to bear the brunt?

Answer 1

idk...good question.

Answer 2

I think you could argue that it takes the owners and investors to bear the risk before there is an opportunity to purchase a product. For example:

You start a coffee shop. You have to have a cash register, cups, coffee, and lots of other things. You don't have a customer and the doors are not open. Your cash is no longer cash - it's cups, cash register, etc. If you don't have the cash, but do have an investor, they are trading their cash on the premise that you can get customers once your coffee shop is open for business.

Now your shop has been open for 3 years, and the cost of cups is going to go up. As the shop owner, do you let your costs eliminate the ability to pay yourself, your employees and investors. Probably not. Your customers will continue to need cups, you'll adjust the price of each cup of coffee to reflect that change in costs for the product they are buying.

What happens if the city decides the street will have to be reconstructed so that old water and sewer lines can be replaced. Your coffee shop will likely see customers use another road to get around town. Your sales will go down, your rent for the building will stay the same. Your employees will still want to get paid, as will your investors.

Hopefully you see the bigger picture, that pricing is pretty complex, but usually based on the cost of the product each customer buys plus a markup to pay other business expenses and yield a modest profit for taking on the risks.

Without a modest profit - people would always choose to put their money in a bank and earn interest. (But where would the bank put that money so they could pay interest????)

Answer 3

What do you mean? Is this question based in reality or are you just angry at something...

To pluck an example out of thin air consider Northern Rock.... I understand they are looking at staff cuts (including executive level of 1 in 3) and that the share price has crashed from c. £12 to about 40p. The customers, however, have had their savings guaranteed by the Bank of England.

Admitedly this is a bit of an extreme example, but you aren't right in what you say. It takes a bloomin lot of work to be an executive officer at a company, and it is high pressure and high risk. Similarly, shareholders have given their own money to companies! Why shouldn't they receive good treatment in return?

Answer 4

I would have to completely disagree with the supposition of this question - the employees of a respective company always pay first, then its the customers then the shareholders. The executives get off scott free, or at worse, with a golden handshake. Hence, all business is corrupt

Answer 5

Because you the customer are the at bottom of the pyramid, and you will be treated differently only when you rise up through the ranks. There are also more of you customers to use and kick around. It's like a race to the top, and kill anyone in your way. Nasty, really bad behavior.

Answer 6

This is not the (ex)Soviet Union - Customers are (mostly*) free to take their business elsewhere whenever they like.

*It is only corrupt when Customers are NOT free to take their business elsewhere - examples are NHS, Education, BBC and (in fact) any Government run monopoly institution ..