for gemtraders, as p.t. readers of my articles know. Let me drive this fact home with the following anecdote.
In far away Sri Lanka there lives a fellow trader, let´s call him Jack, who strives hard to achieve ethical and political correctness in all his doings. Jack sees to it that rivers are not polluted and fish populations not endangered. He provides local miners with generators, water pumps and the diesel to run them. He pays more for the rough material than other buyers and comes up for the tuitions of the miners offsprings.
He sells his merchandise in his downtown office, at international gem fairs and via the internet. The other day one of the miners came running to him, waving a printout from Jack´s website and declaring that with these high markups he had to pay double for the rough from then on and could still pocket a "hefty 10%" profit.
What followed was a serious discussion in the course of which Jack tried to explain that sales do not equal profits because there are discounts to be granted, taxes and salaries of miners, lapidaries, brokers and website-programmers as well as rents for offices and exhibition space, flight tickets, hotel bills, the generators and pumps, maintanance for a (12 year old) pickup truck, fuels and the prodigies´ tuitions to be paid. At that the miner generously allowed him 15%...
The final outcome of the dispute was that the miners are now without electricity and waterpumps, pay the tuition (if any) themselves, have to walk 6 miles to the next village to sell their rough for lower prices than before and that Jack is out of rough until he can find new suppliers with whom the game starts all over again because tragicomically this happens about every year...
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