Paul Below wrote:

They consider all of "their" costs. Or at least the costs they incur
in the short term.

They likely don't consider any costs that don't get passed along to
them, which is what I think the poster was referring to. I could be
wrong, though.


The costs passed on to them become part of the prices they pay. Every
business -- or at least those that'll stay in business -- will pass on
their overhead costs to the next step. Then those costs are passed on to
the next step, and so on and so on.

So the cost of the peat used by the grower is passed on to the
distributor who passes them on to the retailer.

Or to get a little more detailed, the costs involved in harvesting and
shipping the peat is part of the costs the grower adds on before selling
to the distributor. Those costs get passed on to the retailer.

And if the retailer doesn't sell the plant, either their cost in lost
merchandise is passed on to the consumer in the form of higher overhead
used in determining prices for everything else in the store. Or if the
retailer gets a refund from the distributor, those costs are passed back
to the retailers when the distributor adds in additional costs in their
overhead, and ultimately this cost reaches the consumer again.

Sounds horrible that the consumer is ultimately paying for all this
waste, doesn't it? Until you consider that the costs involved in
handling the situation differently are higher. The pressure from the
consumer market to keep the final retail price low causes everyone at
every step in the process to look for ways to cut their costs. The lower
their costs are, the less they have to pass on to the next step to still
make a profit.

In the end, either the consumer pays for everything, including waste in
the production chain, or someone else along the way pays those costs in
business losses.

While each step in the chain doesn't necessarily know what the breakdown
of the costs of those before them in the chain are, they're still paying
those costs. So ultimately, they are considering all those costs.
There's no way they can't, and still have a profitable pricing model.

--
Warren H.

==========
Disclaimer: My views reflect those of myself, and not my
employer, my friends, nor (as she often tells me) my wife.
Any resemblance to the views of anybody living or dead is
coincidental. No animals were hurt in the writing of this
response -- unless you count my dog who desperately wants
to go outside now.
Blatant Plug: Spend your Amazon gift certificates he
http://www.holzemville.com/mall/associateshop.html