Commodities, Markets, and Profits

All major markets are run like a mafia. No free entry and exit. Prices are fixed within a range. A minuscule number of buyers and sellers (stakeholders) determine prices. Hence, profit maximisation is largely subjective to the market, not the producer.

Many times, the difference between profit and loss is timing. All major markets deal with commodities. Commodity markets have invisible hands that control demand, supply and price. There's high competition among producers as selected producers monopolise price and supply determination.

The sellers are almost always at the mercy of the buyers. This decreases as value addition increases. All major markets, all commodity markets are imperfect.

NB:

1. Here, producer = supplier = seller as consumer = user = buyer.

2. Commodities here are homogeneous goods (agric, FMCG, devices, etc)

The only way producers can avoid competition and price fixation is by decommodifying their products and/or value addition. The latter is relatively easier (not easy). Profitability can also be earned by lowering production costs on quality and directing resources at production volume (quantity).