Stop Counting Others’ Money

It’s not unusual for someone who earns a decent amount of money to voice their dissatisfaction with the prices charged by others. Grumbling is based on a perception that sellers are making enormous profits when in reality, they often aren’t. While successful businesses can make substantial profits, there are significant costs, risks, and talents required to build one.

So Why Not You?

The simplest way to put a more realistic perspective on the fairness of pricing and profits of a particular industry is to ask the one complaining, “Why don’t you open the same business?”. Responses will be something like: “I don’t have the time/money/nerves/skills required to open and run a successful clothing store/real estate-development company/sheitel business.” Well, there you go. That’s what those entrepreneurs are charging for! Unless there’s monopolistic abuse going on, prices tend to mirror the realities of business supply and demand, not greed.

Slim Profit Margins

It’s easy to look at what you’re paying and assume that a store is raking it in. But what about all the costs which eat into revenue? Raw materials, equipment, shipping, and the labor required to sew dresses, manufacture shoes, or grow, pack, and ship food cost a lot of money. In most industries, production costs devour 30–60% of the end prices. Even after the goods are produced and delivered to stores, businesses incur significant overhead for rent, marketing, and administration. By the time they are done paying, most companies are lucky to be left with 10% profit margins (net, pre-tax), meaning they are taking home barely 10 cents of each dollar charged. While exceptions do apply (for example, some service industries enjoy excellent profit margins), most sellers aren’t making obscene profits.

Big Money and Risk

End users also often ignore the tremendous risks undertaken by businesses in the pursuit of profit. The potential risks and rewards of local real estate development, for example, are sometimes far less advantageous than many presume.  If costs rise or sale prices fall just a bit, the business owner can lose money or even go bankrupt.  Indeed, many real estate developers unfortunately go under at every downturn, and the potential for solid profits is necessary to motivate investors to undertake the massive effort and risks involved.

Its a Free Market

While $70 for a wig wash may seem greedy to some, no one is forcing anyone to use that sheitel macher. Typically, market prices settle naturally, and no single vendor can control market rates. Customers will go elsewhere if the pricing isn’t commensurate to the services provided. If the best sheitel macher in town, or any woman who decides she’s tops and charges a hefty premium for her talents, it’s up to her customers to decide whether to pay it or not. Even if a business owner has huge profit margins with minimal effort and risk, there’s generally nothing wrong if they charge whatever willing customers are prepared to pay.

Stop Pointing Fingers

It’s a different matter if there’s either trickery or market-wide manipulation taking advantage of a shortage of an essential item (for example, all the local fishermen drastically raising prices on Erev Shabbos). But there is no shortage of sheitel machers. And the pricing of most items is mainly beyond the sellers’ control anyway. If one chooses or needs to buy certain things that happen to be expensive, it’s not the sellers’ fault. The cost of living is indeed high, but that doesn’t mean there’s someone to blame.

Kosher Capitalism or Frum on Yenem’s Cheshbon?

General rules of capitalistic pricing seem to prevail halachically in most scenarios. Beyond that, though, there may be elements of chessed and chassidus beyond shuras hadin involved. Keeping pricing affordable for the community’s sake is a beautiful thing, and Rav Dessler zt”l commends those givers who take as little profit as possible.

But can someone demand lifnim mshuras hadin from others? Is it proper for a seller to lower their legitimate earning potential if it may be at the expense of their own families’ needs? And does Yenem himself charge as little as possible in his financial dealings? If not, then his grumbling is obviously driven by jealousy, not frumkeit.


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