Chapter 94: The Growth of the Foolish Son and the Imminent Crisis
Chapter 94 - The Growth of the Foolish Son and the Imminent Crisis
In certain shops specializing in alcohol, high-end spirits were often limited to just a few bottles. If a customer needed more, the owner would either contact a supplier or source it from other merchants.
High-end alcohol was expensive and tied up significant funds, making it a less attractive choice for profit-driven merchants.
The situation in Jingang City was no different. While there was a market for mid-to-high-end alcohol, sales were slower compared to low-end spirits. For merchants, quickly turning over their capital was their ultimate goal. Even a mere 5% profit margin could double their principal if the turnover was fast enough.
However, if capital turnover slowed—if the cycle from principal to product to sales revenue dragged on—even a 100% profit margin wouldn’t compare to the wealth generated by a 5% margin on rapid cycles.
This created a unique phenomenon: before the Prohibition went into effect, the merchants who were aware and started stockpiling alcohol overwhelmingly focused on low-end products. Hardly anyone stockpiled high-end alcohol.
Even if some did, they might have only hoarded a few hundred or a thousand bottles. Stockpiling more simply wasn’t cost-effective.
The reality proved them right. Mid-to-high-end alcohol priced at $5–$6 per bottle had doubled to $11. However, the cheapest spirits, which were originally $0.59, had risen to $2—a nearly threefold increase.
In recent days, with low-end alcohol still plentiful, its price growth had started to slow. Conversely, high-end alcohol, with its limited stock and steady sales, had seen its price accelerate.