Guest Column: The mystery of price, finally answered!

We do not have a multi-price system in Canada because lobster dealers were never math whizzes in high school. We like it plain and simple even if plain and simple is clearly inadequate. “One price fits all is the motto,” regardless of quality factors. Because this system is incredibly simplistic it is much more manageable. Don’t ask us to bring quality criteria into it — unfortunately right now that’s not what we are all about. And guess what? Canadian fishermen almost always prefer simplicity as well. They don’t like multiple prices and quality benchmarks any more than the dealers do. They like a single price, the higher the better. “Don’t be too critical of quality,” they say. “Mother Nature’s in charge of that part.” They are just the delivery folks, they claim. So the price is not set by any one source. The shore price reflects a continuum going back a long, long way. We tweak it up and tweak it down as circumstances demand and allow. When in doubt we always pay .50/lb. more than the market will permit. We aren’t business geniuses after all, we are lobster dealers, first and always. We’d rather own the resource at too high a price than not own it at all. Conversations dealers have with each other are not persuasive. There is always one dealer out there who wants to pay more, for whatever reason. And inevitably, if it is humanly possible, all of the other dealers gravitate to that higher price benchmark. Frankly it is still amazing to me. It is a model that would be thoroughly condemned by the Harvard Business School. We knowingly pay more than the market supports 90% of the time. Then we try our best to pass on these costs to the next lucky buyer. Passing on higher costs is more an art than a science, however. Last winter it was a dismal failure in Canada. This summer it remains a fascinating work in progress.