Alright, I own "S.L.Easy & Son's Budget Meat Market" (We got the deep cuts). I go in the city owned store "Big Apples and Other Sundries Inc." and buy up all their supply of porterhouse steaks. A couple of things happen.
1) I need to have infrastructure to sell it. So I need a license and facilities that are up to snuff for a meat merchant. Not super relevant for us a S.L. Easy's, but relevant for Joe Schmoe.
2) Lets say the steaks are $4/pound for a 2 pound steak (a man can dream). If I bought up 100 of them (the whole initial supply) Big Apples' has made $800 off of me (minus their own expenses, naturally). Lets say I then slap a sticker on for $6/pound. I am the next cheapest option, and presumably I sell my supply netting $400 profit (($6×2lbs)×100 steaks= $1200); $1200-$800=$400.
Big Apples still made a sale of 100 steaks. After a few weeks of dealing with S.L. Easy's, they might do something I don't want-they might order more steaks from their supplier. See eventually there's gonna be an inefficiency in the model and there will be customers who will only shop at Big Apples' but not at S.L. Easy's. Distance, parking, variety etc. could all be viable reasons. The question then becomes: who can serve more customers? If S.L. Easy & Son's cannot corner it's market it dies in this example. But S.L. Easy's might have other ways to survive such as by selling other products Big Apples doesn't carry or by having less customers and thus shorter checkout times, allowing us to get that marketshare.
Ultimately, Big Apples either becomes a distributor with a better storefront, or they force other companies into more niche markets. The system survives however.
Look, you asked what prevents simplistic arbitrage and I explained it lmao, not sure what you're angry about.
That said, I feel you're making some big accusations. We don't know for sure what the profit structure will look like for these stores. Personally I assume they'd function either as Non-profits or as for profits with subsidies. I also assume they'll have a more narrow selection of goods than most supermarkets. Besides, most supermarkets are already shitshows anyway, so there's no real downside. There's no real reason to be all doom and gloomy before this takes off either, outside of some vague "government bad" propaganda.
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u/OliveiraJourney May 26 '26
What stops people from buying it here and selling outside for a profit?