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Oil prices


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When oil spiked to $143/ barrel in 2007, many of our prices went up. The economy crashed in 2007/08 (partially caused by high oil prices in my opinion) and oil prices briefly plummeted. After this brief drop oil has spent most of the last 4-5 years in the $100 neighborhood.

We were told that the toys were made from plastic which is a byproduct of oil, as our the capsules. We were told these products needed to be transported all the way from China. We were told that the number 1 cost of the gum was actually oil! Shipping the raw materials to the factory and then shipping it to us.

It's now been a few months since the price of oil collapsed. It seems to have stabilized for now somewhere in the $50's. Yet I have not seen the cost of either toys or capsules or gum drop one penny. As a matter of fact I have not seen any of my shipping costs drop yet either. Can someone explain to me why?

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Honestly, are you willing to drop prices?

I sure aren't

If I get a 5 percent drop in the price of gum I promise to drop the price to 24 cents.

I didn't raise the price over the last 7 years despite getting at least a 30 percent price increase.

We are very limited what we can do price wise and we've been squeezed horribly. We could use a break.

I believe it's called supply and demand.

We should all demand lower prices and give all our business to the first company that supplies them.

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If I get a 5 percent drop in the price of gum I promise to drop the price to 24 cents.

I didn't raise the price over the last 7 years despite getting at least a 30 percent price increase.

We are very limited what we can do price wise and we've been squeezed horribly. We could use a break.

We should all demand lower prices and give all our business to the first company that supplies them.

The suppliers to the suppliers( oil companies, petrochemical companies, injection molders, distributors) probably are also wanting a break too
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Let's take the simplest item we buy. Capsules. I just googled the price of various plastics and they appear to be down an average of 30 percent vs. 1 year ago. Yet capsule prices haven't dropped.

But we have an interesting situation in our industry. An oligopoly. 2 suppliers dominate the market. AA and Cardinal.

We need someone to come in and capitalize on the fact that neither company is passing along the savings to us. I'm pretty sure Frank Parisi still has the capsule molds from when he made his own caps. He would need to buy an injection machine to get up and running. Let's all of us here on vendiscuss commit to do more capping and purchase our caps from Frank. If we know any big vendors not on here let's see if we can get them to do it too. I don't even know if he wants to do this but maybe the mere idea of it will bring prices down.

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Let's take the simplest item we buy. Capsules. I just googled the price of various plastics and they appear to be down an average of 30 percent vs. 1 year ago. Yet capsule prices haven't dropped.

But we have an interesting situation in our industry. An oligopoly. 2 suppliers dominate the market. AA and Cardinal.

We need someone to come in and capitalize on the fact that neither company is passing along the savings to us. I'm pretty sure Frank Parisi still has the capsule molds from when he made his own caps. He would need to buy an injection machine to get up and running. Let's all of us here on vendiscuss commit to do more capping and purchase our caps from Frank. If we know any big vendors not on here let's see if we can get them to do it too. I don't even know if he wants to do this but maybe the mere idea of it will bring prices down.

I am sure Frank would love to sell on TVF again, his previous experience went so smooth.  SMH

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Prices won't go down. Petroleum has an effect on prices, but so does all the striking and people asking for more money. We have places on both the East Coast and the West coast that demanded that the minimum wage be raised enough to feed there families while working at McDonalds. 

So the gas prices may go down, but the cost of living is on a HUGE incline due to people expecting to make a living off flipping burgers. What they don't realize is that now ALL products will have to increase pricing to keep up.

 

Now that they have increased pricing, don't you think that others would as well so that they get a bigger pay check? Also, we have all the supplies sitting out in the bays on the west coast because of strikes and more people demanding money. Now our suppliers are losing money due to the strike. It effects the whole US. 

 

Then there will be another line that does the same thing. China isn't stupid, they follow suit. 

 

It's not one thing that drives any one product. There are too many variables that drive it and the person at the helm of the US hasn't helped anything.

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Here in PA the fuel prices didn't even drop as much as oil has. Oil dropped 50% while gasoline dropped barely 35% , diesel & heating oil 30% .   If your paying close attention to the price of oil, it was almost at 40.00 a barrel  , now its around 50 a barrel . Fuel prices rose here when that happened of course, which took place the moment oil increased . It did , however, take a week to 10 days for fuel to come down when the oil prices dropped. Odd how that happens, isn't it ? 

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Don't bring politics into my thread people!!!! I'm sure none of the people who are making our capsules are making significantly more than they did a year ago. AA and cardinal (or possibly the people they buy the plastic from) are pocketing the money. Because they are colluding in a fashion. We need to force the prices down. That's why I suggested more competition.

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Even without politics, your not setting the picture.

Where's all the product right now? Most of it is sitting our was, in the Pacific ocean. That's just one issue.

Process on shopping just went up ask over. Who absorbs that?

If someone has several hundred thousand that they are sitting on and willing to mage a less percentage on them vending, by all means, have at it.

I can even tell you the place where AA gets their bouncy balls. It's over 3000 just to ship a container to the US. Not too mention the truck to bring it in. They make a Penney or 2 per cap. How much do we make?

It's in every line of business.

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Ron, I'm not sure I understand your post cause there are a lot of typos. But you seem to be making 2 points. First that the product we are buying now was made with the higher priced plastic. Oil has been below $70/ barrel for 3 months now. How many months inventory do they carry?

Second, you claim that shipping costs are up. I know they haven't gone down but it doesn't make much sense that they would be up by any signicant amount with oil prices at their current level.

I would like to add that while googling plastic prices I came across a financial analyst recommending a strong buy for a plastic wrap supplier because their costs were down 30 percent and they would be able to get away with not passing the savings on to their customers due to the strength of the economy, the profits of their customers and the amount of competition in their field.

Except in bulk vending, unlike the above example, our sales and profits are not strong and we need to share in the savings.

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Ron, I'm not sure I understand your post cause there are a lot of typos. But you seem to be making 2 points. First that the product we are buying now was made with the higher priced plastic. Oil has been below $70/ barrel for 3 months now. How many months inventory do they carry?

Second, you claim that shipping costs are up. I know they haven't gone down but it doesn't make much sense that they would be up by any signicant amount with oil prices at their current level.

I would like to add that while googling plastic prices I came across a financial analyst recommending a strong buy for a plastic wrap supplier because their costs were down 30 percent and they would be able to get away with not passing the savings on to their customers due to the strength of the economy, the profits of their customers and the amount of competition in their field.

Except in bulk vending, unlike the above example, our sales and profits are not strong and we need to share in the savings.

Shipping just went up a month ago to the supplier and ups/ fed ex.

If we have a good relationship with our suppliers, they tell us that. Mine did.

Then there it's labor cost........

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Which droids cost to about .026 a ball on medium sized orders, them fright from the port, and cog at the manufacturer, which leaves a penny or 2 per piece like mentioned above.

And the cost per container was an old price.

The shipping I was referring to was to manufacturer, them I was referring to from distributer to us

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I may be off a little on numbers. I just affair and move forward. The idea though, is that blaming everyone for making money does no good.

There are a lot of suppliers out there already. We only discuss the big ones. There is SSM and bluebar for example if I remember right.

I'm not trying too sick up for the supplier, but there is way more that goes in to I'd getting our product than we think about.

Like staff cost, warehouse cost, insurance, you name it.

I don't think we take it all into consideration. Are they making money? Absolutely! Do are we. I would bet that our percentage is higher than There's at the bottom line.

Which droids cost to about .026 a ball on medium sized orders, them fright from the port, and cog at the manufacturer, which leaves a penny or 2 per piece like mentioned above.

And the cost per container was an old price.

The shipping I was referring to was to manufacturer, them I was referring to from distributer to us

Sorry about the typos, and I was using numbers from 27mm.

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Actually the container price is nearer $3600 for s twenty and $4500 for s forty then you add port fees and customs, container fees usually include local delivery. Customs can be a pain because if they decide to inspect you pay for that plus storage while your container waits to be inspected . I have had as much as $900 tacked on because of customs.

Also a used injection molding machine is around $250000 a mold for capsules was ( a few years ago) around $60000.

The beads used in the machines are most likely purchased on a contract to lock in a good price and the oil used to make the beads is also on contract.

Things are never as simple as people think.

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If anyone needs to resurface in the bulk vending supply business it is the Parisi family.  They are  great people to do business with and have been in

the bulk vending business for many years.

 

I started buying from Pete(Franks Dad) in the 1970's and I always got good products and displays that sold very well. Never had a issue with

capsules breaking in the machines.  I also bought empty capsules from them and they were very good.

 

Anyone that has done business with Frank knows what I mean.

 

Joe

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Actually the container price is nearer $3600 for s twenty and $4500 for s forty then you add port fees and customs, container fees usually include local delivery. Customs can be a pain because if they decide to inspect you pay for that plus storage while your container waits to be inspected . I have had as much as $900 tacked on because of customs.

Also a used injection molding machine is around $250000 a mold for capsules was ( a few years ago) around $60000.

The beads used in the machines are most likely purchased on a contract to lock in a good price and the oil used to make the beads is also on contract.

Things are never as simple as people think.

A used injection molding machine is nowhere near 250k. You can get a old Engel for 10k That would more than do the job. This is what I do for my day job

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