The existence of the secret DNA Code DNA Code for the Auto-Parts Aftermarket for determining the prices at which manufacturers and publishers sell goods to the major chain retailers presents a series of legal problems not the least of which is a major Enron situation.
More than 50% of the nation's retail sales are made through major chain stores, and these stores are not reporting their cost of goods, advertising costs and earnings accurately.
By not including the DNA Code as a reduction from invoice price for the goods purchased by the retail chains, they are overstating costs and misleading competitors as to the chains' true cost of goods. To make matters worse, Barnes & Nobles and Borders report the rents they pay for their retail stores as part of their cost of inventory, making it even more impossible for anyone to determine their cost of goods. The DNA Code reductions of cost are used (instead of reducing inventory cost) to reduce actual advertising expenses, for example, which makes it appear that the chains have very little or no advertising expense, thereby making the chains appear more efficient than they actually are.
By including the DNA Code elements in their financial statements without setting aside any reserves for liability for violation of the Robinson-Patman Act, and by not footnoting that their earnings are non-existent (if the chains were to stop obtaining the DNA Code benefits), the chains are making it appear that they are profitable when in fact they are not, which is causing capital to be made available to them for further expansion to the detriment of their competitors, the banks, investors, and the economy as a whole.
The manufacturers and publishers are actually more profitable than they seem, if they can eliminate this giveaway of their assets and profits through the DNA Code reduction of invoices to the major chain retailers. If manufacturers and publishers sold to all customers at the same per-unit prices, with no more than cost-justified reductions for any volume differences, the manufacturers and publishers would be profitable; there would be less reason to merge (and eliminate jobs, while increasing concentration of the economy); there would be less opportunity or desire for manufacturers to have their products manufactured in other countries; and there would be more jobs and opportunity and a fairer distribution of wealth in the United States.
American citizens are victims of their own shortsightedness, anxious to save a few cents on a few products at the major retail store, while watching these purchases destroy or severely injure smaller retail businesses and the service businesses dependent on them (such as law firms and advertising agencies, when their clients are acquired by large corporations, who turn the advertising and legal work over to the major firms already retained by them).
Boutique or niche businesses are often urged as the cure for a small retailer trying to escape the competition of the major retailer (which buys its goods at about 60% of the price paid by the small retailer), but this strategy is one advocated by and profitable to the major chains, which wait for a market to be developed at the small retailer's expense, and then when developed enough the major retailer will move into the niche market and turn it into a main market, and for its originator to develop a different niche business for later, similar takeover.
What this country needs is enforcement of the Robinson-Patman Act, to allow businesses to compete with each other and provide the resulting benefits of competition to the United States and its people. The United States does not need a single large retailer (GUM). The U.S.S.R. tried it, and found that the system didn't work. This country is now encouraging Russia to adopt our current model of unregulated capitalism, which many Americans can see doesn't work either.
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