Reply to post: Naievete!

Margin mugs: A bank paid how much for a 2m Ethernet cable? WTF!

Malcolm Weir Silver badge

Naievete!

I'm frankly baffled at people who think the difference between two products bought from two different vendors is only the sticker price.

Consider: which is cheaper, an Ethernet cable priced at £1 from vendor A, or an Ethernet cable priced at £5 from vendor B?

The answer is (may be) the one from vendor B, because the purchaser has net 30 terms and has the vendor set up in their automated invoice processing system, which means that the invoice is submitted and approved in one minute. Vendor A, on the other hand, requires payment before delivery on a credit card, and then requires manual reconciliation of the order, the charge, and the invoice, which all-in-all consumes (say) an extra 10 minutes of someone's time. Fully burdened costs for an accounting clerk (including salary, benefits, rent, management overhead, etc) comes out at £30 per hour (which is ludicrously low), which means that buying the £1 thing from vendor A costs the company £6 while buying the £5 thing from vendor B only costs £5.50.

And, yeah, the farming slur is disgusting and false. (Owners of large agribusinesses may drive around in Range Rovers, but then so do some people in the media.)

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