Reply #109: Because it would not be worth their time

[anigbrowl]

Think about it.

Let's say you spent $100,000 buying and growing the strawberries. For simplicity's sake, let's say you also expected to get 100,000 baskets too. $1 invested in planting and growing = 1 basket. Now, hiring people to pick them costs $200,000, or $2 per basket. Your hope at the beginning of the season was to sell each basket for $4 to a supermarket who will sell them for $5, covering all your expenses and bringing you an income of $100,000 - to support yourself and your family for a year, save for the future and all that other good stuff.

(I have no idea what the actual numbers are, I'm just trying to keep the math as simple as possible.)

But this year, nobody wants your strawberries - they have way too much already. In fact, Supermarkets are only willing to pay $3 per basket. They are selling them at the same price to the public: this means they don't make any money on strawberries, but since they sell lots of other things too, they figure that it's worth selling the strawberries at cost to bring more people into the store where they will also buy bread, diapers, and so on which are still profitable. Shit! How to get back that $100,000 you already spent on planting and growing them? If you don't, you'll be short of money when it comes time to harvest the next season, and have to borrow that money from the bank, which will eat into your income. Maybe you'll only have $75,000 after you paid off the bank loan.

OK, you think - you'll put up a sign and invite people who want to pick strawberries to pay me $1 per basket, and you'll make your money back that way. you're sure it's going to work because a basket of strawberries at the supermarket still costs $3 and thus your strawberries are cheaper.

But what you have forgotten is that the cost to the strawberry consumer is $1 plus the value of the effort expended in picking the strawberries. If this would normally fetch $2, then it's no cheaper than the supermarket - all that is different is that the consumer has paid part of the cost in cash and the other 2/3 in labor. Well, you say, a lot of people have only $1 in cash, which would not be enough to buy strawberries in the supermarket. So they should take advantage of your offer, work for the time it takes to fill a basket (for which you would normally pay $2) and get their strawberries.

But you are not the only person with fruit that needs picking, and strawberries are not the only fruit. Joe Blow down the road has a grapefruit farm and he's offering $3 to anyone who spends the same amount of time picking grapefruit as it takes to pick a basket of strawberries. So the consumer with $1 in his pocket can work for him and get $3. That's enough to buy strawberries at the supermarket, and still have $1 left over, for the same amount of work.

What do you think he's going to do - hand over his $1 and work in your field filling a basket of strawberries, or spend the same time in Joe's field, make enough money to buy the same basket of strawberries at the supermarket, and keep his dollar?