How badly is the Astronomy Industry is on it's butt

There is no doubt that the hobby of Astronomy had a boom as many similar hobbies did during the late 90's and into the 2000's with everyone buying cool stuff with the "extra income" from the home value increases.

But now it appears to be the wild wild west and every man for himself during this recession; so now that the long tail of most businesses have been impacted what are the other small guys trying to do to stay in business?

Are they cutting prices so much on items that they had dealer agreements on and the dealer is doing nothing? That is a bad business practice if that is what is happening. To the customer that seems great but in the end that business model cannot sustain enough sales to make a profit.

The dealer allowing that affects the healthy business as well. It takes customers who would normally buy from a healthy small business(who has been wise and managed his/her company well) and allows the other small business to suck dollars way that they won't even make a profit on. Thereby presenting the buyer with a good deal in the short term but in the long term that great small business that hosts a website has to endure this competition until the other small business goes out of business and it affects their healthy bottom line, but wait, they in turn end up in the same situation as the other small business because of the bad business practices of others. Kind of like having someone sit in the last spot on a black jack table and not knowing when to take one for the good of the rest of the table.


Now the other issue is the dealer cutting the prices on the item(s) and not providing kickbacks to insure the same margin for the small business dealer. If that is the case then any agreement that was negotiated needs to be punted no matter how big the name is.

Now this is all totally speculation : ) I defiantly buy brand specific, but if their bad business practices is a determent to the small business as a whole I will stop buying their brand. I don't want to go back to the days buying from a department store. Quality sucks and they provide low end crap.

Gerald

There's a lot of low-end crap available from reputable dealers.

In an economic upswing employment expands along with investment. Wages rise but bottlenecks in the economy lead to rising prices of critical input goods; real wages tend to fall or at a minimum not keep pace very well with productivity gains. Profits tend to rise and speculative pressures on some asset categories may inflate some people's sense of net worth. But consider the case of most people: wages did not keep up with housing costs, and the only way more people got into houses was with fraudulent access to credit; in reality, most people could not afford houses that as a ratio to income were way over their heads, more so than historically. Ditto with oil: people were working and prices were soaring, real wages were under extreme pressure on multiple fronts.

In an economic downswing investment falls and employment contracts. Sellers are under pressure from unsold inventory and are also under pressure from relatively fixed prices (such as a lease on a store, and often, wages). So they cut prices to maintain throughput for example if you sell four scopes at $2.00 profit in one month you are better off than if you sell no scope calculated to sell at $8.00 profit; so you cut prices; and you also cut prices to pay for inventory that isn't clearing: it is in some cases cheaper to move the product than to send it back to the manufacturer. And the manufacturer in any case will come under similar pressure to move the product, and so, will cut the prices rather than take back inventory....another interesting option is to sell at no profit or even at a loss because no profit and loss levels of income, say 98% of breakeven, is preferable to folding up shop and 0% of breakeven.

The result is that in a recession *those who keep their jobs* have *higher purchasing power.* One need only look at the simple situation of the oil market. The recession has caused prices to collapse and if you're still working you enjoy wages that are effectively higher than when boom/speculative conditions had pushed the price up to $146/barrel.

Ultimately manufacturers cut back output in a recession and this decision contributes to the overall unemployment; it is possible to reach a new equilibrium at lower output and have things crank along at that reduced level.

regards
Greg N

Without knowing the who and what of who or what you are referring to, it's impossible to comment specifically.

Yes, astronomy dealers are hurting. People, some people anyway, do have less disposable income.

But not all people. Most people, like me, are still secure in their jobs. Did not speculate in the housing bubble, and didn't use equity to buy astronomy-stuff.

Frankly, a large part of the reason dealers are hurting is prob'ly psychological. Most folks are doing fine, but can't help but be worried because of what they hear on the dadgummed television set. For these folks, some price cuts may stimulate them to buy. There may not be as much of a profit margin for them or the maker as before, but they may sell more astro-widgets and be better off than they were when they were not sellin' NUTTIN, HONEY. LOL

In the past, astronomy has proven to be at least somewhat recession-proof, with people still willing to spend for a good eyepiece in lieu of a trip to Vegas.