Posted 02 February 2011 - 01:16 PM
For most practical purposes, bank notes being the medium of exchange and not just a collectors' item, smaller notes are more "useable". Pretty hard to "break" a ten dollar, or ten thousand dinar, note by ripping it in half. But having two five dollars or five thousand dinar notes ... well, you see the punch line to that one.
Also, if you were purchasing a ton, or in this case a very large amount, of notes, or of most things, the dealer has to take into consideration the matter of shipping, not just to a dinar purchaser but to the guy in the corner store who sells peanut butter. And there is another example ... even grocery buying ... the larger the package the cheaper what is inside.
Packaging and shipping. As the manufacturer are you going to want to sell ten pounds of something to the retailer in one bag with one label and packaged by one person in one minute? or the two bags each five pounds, with two labels, packaged in two minutes? As the manufacturer it is more profitable for you to go with the larger bag and cheaper packaging. On the other end of things, quite often the store owner, not the manufacturer, will find it more profitable for him to purchase, from the manufacturer, the smaller packages of something as he can make more on the smaller packages. Sell five boxes instead of two, and make five times the markup instead of two. Bearing in mind on the issue of markup it is not a lump of money, in merchandising it is a percentage. But going further on this line will just get more confusing.
It also is part of the "get and keep a client perspective." Give the builder a better deal when he comes in for drywall and he will take a truck load instead of half a truckload. He saves money while the building supplies merchant makes more by getting rid of it quicker, not having it take up space in storage, being able to reorder larger amounts and get a discount.The purchaser, in this case the builder, also gets a better deal and comes back. That is how major retailers get major customers: When they can buy in bulk from the suppler, sell singly to the purchaser, they make a lot more money.
All down the chain it is the same. Just as in investments the ideal is to buy low and sell high, in merchandising the ideal is to move the greater quantity, which is done by offering the larger package at a lower per-unit price. Ask the cook in your house if it is cheaper by the chop to buy a pack of two, or the family pack of six.
It is all a matter of merchandising.
And I apologize for rambling somewhat on this comment ... I am being tortured by a kitten who thinks the keyboard is a toy and if I am typing I must be playing and if I am playing it should be with her.