If this could work, wouldn’t it be awesome?

I got this as a forward from a friend. It made me think and I figured instead of forwarding it on, if I posted it here may be I can ask what YOU think about it 🙂

I could not find the actual source, if anyone knows please let me know and I will attribute it or link back to the original. For now, here is a copy of the message.

A man eats two eggs each morning for breakfast. When he goes to the store and pays Rs. 12 a dozen. Since a dozen eggs won’t last a week he normally buys two dozens at a time. One day while buying eggs he notices that the price has risen to Rs. 16. The next time he buys groceries, eggs are Rs. 22 a dozen. When asked, the store owner says, ‘I get at a higher price and I have to raise my price accordingly’ . This store buys 100 dozen eggs a day. He checked around for a better price and all the distributors have raised their prices. The distributors have begun to buy from the huge egg farms. The small egg farms have been driven out of business. The huge egg farms sell 100,000 dozen eggs a day to distributors. With no competition, they can set the price as they seem fit.

As the man kept buying eggs the price kept going up. He saw the big egg trucks delivering 100 dozen eggs each day. Nothing changed there. He checked out the huge egg farms and found they were selling 100,000 dozen eggs to the distributors daily. Nothing had changed but the price of eggs. Then week before Diwali the price of eggs shot up to Rs. 40 a dozen. Answer of grocery owner was, ‘Cakes are being baked for the holiday’. The huge egg farmers know there will be a lot of baking going on and more eggs will be used. Hence, the price of eggs went up. Come Christmas, with a lot of cooking, baking, etc. the price of eggs is Rs. 60 a dozen.

The man wanted to do something about the price of eggs. He starts talking to the people in his town to persuade them stop buying eggs. This didn’t work because everyone needed eggs. Finally, the man suggested ‘Buy only what you need’. He ate 2 eggs a day. On the way home from work he would stop at the grocery and buy 2 or 4 eggs. Everyone in town started buying only 2 or 3 eggs a day.

The grocery store owner began complaining that he had too many eggs in his cooler. He told the distributor that he didn’t need any eggs. Maybe wouldn’t need any all week. The distributor had eggs piling up at his warehouse. He told the huge egg farms that he didn’t have any room for eggs would not need any for at least two weeks. At the egg farm, the chickens just kept on laying eggs. To relieve the pressure, the huge egg farm told the distributor that they could buy the eggs at a lower price. The distributor said, ‘ I don’t have the room for the %$&^*&% eggs even if they were free’. The distributor told the grocery store owner that he would lower the price of the eggs if the store would start buying again. The grocery store owner said, ‘I don’t have room for more eggs. The customers are only buying 2 or 3 eggs at a time. Now if you were to drop the price of eggs back to the original price, the customers would start buying by the dozen again’.

The distributors sent that proposal to the huge egg farmers. But the egg farmers didn’t like to part with the extra money they were getting. But, those chickens just kept on laying eggs. Finally, the egg farmers lowered the price of their eggs. But only a few paisa. The customers still bought 2 or 3 eggs at a time. They said, ‘when the price of eggs gets down to where it was before, we will start buying by the dozen.’ Slowly the price of eggs started dropping. The distributors had to slash their prices to make room for the eggs coming from the egg farmers. The egg farmers cut their prices because the distributors wouldn’t buy at a higher price than they were selling eggs for. Anyway, they had full warehouses and wouldn’t need eggs for quite a while. And those chickens kept on laying. Eventually, the egg farmers cut their prices because they were throwing away eggs they couldn’t sell. The distributors started buying again because the eggs were priced to where the stores could afford to sell them at the lower price. And the customers starting buying by the dozen again.

Now, transpose this analogy to the gasoline industry. What if everyone only bought Rs 200 or 300 worth of Petrol each time they pulled to the pump???

The dealer’s tanks would stay semi full all the time. The dealers wouldn’t have room for the gas coming from the huge tanks. The tank farms wouldn’t have room for the petrol coming from the refining plants. And the refining plants wouldn’t have room for the oil being off loaded from the huge tankers coming from the oil fields!!!

Just Rs 200 or 300 each time you buy gas. Don’t fill up the tank of your car. You may have to stop for gas twice a week, but the price should come down. Think about it. Also, don’t buy anything else at the fuel station; don’t give them any more of your hard earned money than what you spend on gas, until the prices come down.

Just think of this concept for a while. ………… please pass this concept around….reaching out to the masses …the world ……at large.

8 thoughts on “If this could work, wouldn’t it be awesome?

  1. You can not compare EGGS with Gasoline, since eggs are edible and are prone to get spolied wheareas gasolines are in crude form with lots of storage capability and gasoline stations won’t get supplies daily.
    Also, in your story above, the consumers haven’t reduced the consumption or chose alternative source of food to egg and so at the end of the week, they are going to pay the same amount for the egg + the time wasted at the store and commute to the store (not everyone lives around that store).
    This story is interesting but I dont think this anology makes any sense. The only way this story will work is that, that guy must have started eating fruits (instead of Eggs) or eat one egg a day 🙂

  2. @VillageBoy: I bow to thee! 🙂 You have it right. It will not work. I knew I could trust you to come up with a comment on this ;p. The analogy is not right. Anyways, I will send your comment to the person who forwarded the email in the first place 🙂

  3. Villageboy is absolutely right. Unless,the consumption(demand) is reduced overall, the price wont come down. Consider this, i get a dozen eggs and dont turn up to the store for the next 1 week. Same way happens with some others too. If we all decide to buy only 2 eggs per day, we go to the store everyday and get the same 2 eggs. So, overall the demand/day or the demand/week is anyway going to be the same. Maybe the first two days, the shopkeeper/supplier might notice that the demand has reduced, but over the time it will get standardized and streamlined. Hence, no way the price is going to be affected.

    In the case of petrol, it can stay for ever. So, the demand/production will reduce for the first two or three days and over the time, this will also get standardized.

  4. I concur with Shankar and Villageboy. The dynamics of oil industry is first of all, vastly different from the retail / produce industry to even compare. And to top it, in any industry, unless the demand significantly reduces, the prices will not come down.

    The solution out of the oil fiasco is to seriously invest / start looking at alternate renewable energy, more public transportation, reducing the number of automobiles on the road – basically all resulting in finding a way to reduce the demand on oil. Either we do this or eventually this will be forced on us due to dwindling resources. Residents of Chennai got a sneak peak on how life would be if there were no oil early this month – if we don’t want that to be reality, we need to take some concrete steps and NOW.

  5. Ya…all the ppl above are correct. Even if this does work in the short-run..though it seems impossible…the prices will again shoot-up in the long run! So, the best way is to find alternative sources of energy. Also, somebody needs to stand up against this international cartel(OPEC)and curb the extent of oligopoly they have created…

  6. Oh the argument in the forward is so flawed. Like Village Boy, and everybody else pointed out, demand should either be reduced or substituted for the prices to fall down.

  7. I completely agree with A-Kay, I think it is the responsibility of every citizen to stand up against the issue and seek an alternative than to blame the govt. or its oil policies. Why not use a public transport? Why not cycles? Why more than 2 bikes in a family of 4? Why cant people walk a small distance of a km instead of motoring? Lot of these types of whys only annoy me…To be a bit responsible, I stated using public transport once in a week and insisted G also the same to walk to his office once in a week. Good for Health, Good for the family, Good for the Nation, above all if you reduce the carbon print, its good for the Mother Earth.Isn’t?

  8. @All: I agree 🙂 Should have pulled the post down the min K argued its flaws with me. Still, it was interesting to hear all your views 🙂

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