Don't these (your) words contradict the O P? If it is a rule of business than don't it have to be both directions and at all times? So is the root buyer expecting an \"entitlement\" to expect a seller to merely to sell for less so said dealer can make more (get more \"entitlement\")?
No, not at all. Ginseng is a commodity. Commodity markets are different than most things we are familiar with, therefore, commodities dealers are also working with a slightly different set of rules. If the market price is high, I pay high. If the price is low, I pay low. The risk is if the market does not go up or if it in fact goes down and the ginseng I have already bought is worth less than I actually paid for it. This is what happened last year. I’ve already said that at the end of last season I paid as high as $765/lb and was able to sell for $800 at the most not counting pick-out. How many people would be willing to invest $750 or more per pound on a gamble that they would make $20-$30 per pound? Not many. I prefer stronger markets so I can pay diggers more. Unfortunately, that is out of my and your control.
The fundamental aspect that most people (diggers mostly) miss is the fact that someone in a commodity business cannot buy something for more than they can sell it for and stay in business. My job is knowing what I can buy a given lot of ginseng for and still be able to sell it for a modest profit. If I must pay more than I can sell it for in the current market, it is foolish to buy it. Of course, nearly everyone who walks up to my scales tells me they have the best ginseng they’ve ever dug.
Diggers already reap the largest rewards. In a $700 market, if you dig high quality ginseng and handle it well, you will get $700 (or more) for your ginseng. Short of a tank of gas you really have no costs. A dealer on the other hand who makes maybe $50 or so per pound has a host of business expenses which comes out of his gross sales. It is funny to me how people who claim they are being cheated and lied to because of greed make by far the most money from the people they claim are cheating them. Ironic wouldn’t you say?
If I said I make $200 per pound after paying you $1000/lb in a $900/lb market, would you be happy? Or, would you think I’m cheating you because I’m making too much? Let me ask again, who is being greedy?
And, yes, we sellers can easily control the market by simply not digging and selling on any given year when the price is low. It's called supply and demand. We control the supply. We have the freedom of choice still. We choose who we sell to as well. We choose who we buy seed from. Etc. etc. As a grower we decide which year to dig and if the market is low we simply let them get better looking and bigger by not bringing to market and in turn bringing the price back up (if enough people would just work together).
If you had 25-50 million dollars to invest (lose) you would be able to significantly affect the wild ginseng market –short of that not so much. But, the effect would be fleeting at best. Low harvests this year might cause a modest rebound in prices next year, but as we saw last year, quality of the ginseng in the market is a huge factor of its value independent of volume. The fundamental aspect you are missing is that you cannot control the harvest. You note yourself that it would take enough diggers and growers working together. Let me tell you from experience, we cannot even get 30 dealers, growers, and diggers together to have a say in the changes of the new laws in this state. There is no possible way you and a group of your friends will be able to ever manipulate the ginseng market. Many diggers bought into the $2000/lb hype splattered about this forum last fall –and many of them were calling me in March looking for a dealer on which to dump their ginseng. Don’t forget, dealers have freedom of choice as well.
You also have freedom of choice in another very important way –you can chose what type of ginseng you will bring to market. By only digging the biggest mature roots which good wild character and desirable shape, and then handling them properly and professionally, you will get the highest market prices for your ginseng. If you want to see prices going up for wild ginseng, educate as many diggers as you possibly can and convince them we need to actively avoid short-term gratification and instead improve the overall quality of the ginseng we bring to the international market. That means they need to stop digging every large two prong and small three prong plant they find.
Your comments regarding an employer and his/her business model has little if anything to do with a commodity market. The economics and externalities of organizational culture are much different but also much more predictable and easily affected.
If we are honest with ourselves we will ask ourselves about each action we take that involves another living being and ask \"If that were me would what I am about to do or just did make me feel blessed or cursed\".
Good point. Being Christian, I have always treated people I do business with as I would expect to be treated if the roles were reversed. I find that with a little effort, there is almost always a win-win which can be found. I have never accepted that in order for me to have a good deal you have to have a crappy deal. However, I find fewer and fewer people who are willing to honestly consider my position in relation to their own . I’ve never had a digger come back a week later and tell me he heard the market dropped and offer some of the money I paid him back.
Here is the key: In order to treat someone properly, we need to understand what they are dealing with. I was a digger long before I started dealing in ginseng. I understand the digger and grower side of things. I also understand the dealer side of things. If our roles were reversed, I would never ask you to pay more for my ginseng than you could sell it for. I need to be informed as to what the market really is doing currently (as opposed to listening to pie in the sky claims of 2000/lb on a forum) and I also need to understand why my ginseng is being graded the way it is when I come to the scales. If I take your advice when you tell me what the market is looking for and bring you that type of high quality root properly cared for, I’ll then expect you will pay me as much as you can in the current market.
One thing we all should remember is that karma can and will come back on every one of us. It can be a blessing or a curse. The choice is ours
Your comments about your apartment business are really not relevant at all. I’m happy that you have found a business model with which you are happy and have good success. You stated that at times you take a loss because of your low rates, but acknowledge that in the end, you still have your equity (buildings) with which to make more money in the future. This is significantly different than a commodity market. Once I sell a particular lot of ginseng it is gone forever. Here’s why. Let’s say I’m making $50/lb in a current market. You bring me 10 pounds of ginseng. Some good, some not so good. In a $1000/lb market, pick-out will be worth no more than $300-$400/lb. If I pay you $1000 for a pound of pick-out in your 10 lb lot, I’ll have lost all profit not only on your whole lot but also on part of another lot. But here is the catch, I cannot raise the price or lower what I paid the next time I sell that lot -its already gone forever.
I agree with you that we should treat people fairly. But, fair is a relative term and as we have seen over the past few months in our country, what many people are willing to accept as ‘fair’ just isn’t right. It is not right to riot and loot because you think the outcome of a criminal case (which you know little if anything about btw) is ‘unfair.’ Giving every child a trophy regardless of their ability as compared to other children in the interest of being “fair” is removing any incentive that child has to get better. This is destroying the American culture.
Another relative term we hear often is “too much.” How much is too much? Is it too much for a dealer to make $100/lb on the ginseng he buys and sells? If so, I would have to ask how that logic stands to reason with a digger complaining about the dealer being greedy and dishonest when the digger is getting paid $700 or more per pound for that same ginseng.
So, let me ask…how much is too much for a digger to make on a pound of ginseng? At what point is the digger being unfair or greedy in his business with the dealer?
In the end, there are many factors which go into the way a commodities market behaves. The external forces are bigger than you and I, and bigger than every digger and dealer who comes to this site combined. The best we can do is be honest in our dealings with each other and as long as we are digging, buying and selling ginseng, understand that we are all trying to do our best to enjoy our trade without losing our shirts.
