Pricing in Ghana

On most market days, you can find me sitting with my friend, Rose, selling bread and/or watermelon. I helped Rose find a lady in Bolga who makes the bread and then sends it to Binaba on the market lorry (truck) that arrives around noon each market day (which is every 3 days).  We spend a couple hours putting the loaves in plastic sleeves. She sets it up on her table and sells for the rest of the day until 10 or 11pm. She knows to save me the best loaf of tea bread (i.e. the one least squooshed).

On non-market days, I will sit in the market and 1) play cards with some of the town boys or 2) help my friend, Baby, tie sugar or milk powder. (Are you thinking about Dirty Dancing right now?) Most people can not afford to buy a whole bowl of sugar or large tins of milk powder, so she puts smaller amounts in small plastic bags and sells at various prices. 200 ... 500 ... 1,000 cedis. The 500 size bag is roughly 2 and a half of the 200 size bags. The 1,000 size bag is equal to two 500 bags. One time I asked how much profit she was making on each bag. She had no idea. She just knew that she should make 10,000 cedis profit on the entire bowl of sugar.

They do the same thing with soap. A long bar of Key soap (roughly 12 inches long) sells for 12,000 cedis. Baby cuts this bar into 6 smaller bars and sells each for 2,000 cedis. In America, we would sell the smaller size for 2,500 cedis to entice people to buy the larger bar (bulk buying!!).

One day, I told Baby she should think about charging more for the smaller slices of soap, bags of sugar and milk powder. There should be incentive for buying the larger bag of sugar or the entire bar of soap. She laughed at me and said that isn't how things are done here and that I was trying to put her out of business just by making the suggestion. In a village of less than 5,000 where more than 20 women sell the same exact soap, sugar, and milk powder, how can Baby decide to charge more? My capitalistic mind races with thoughts and theories, but in this case, I shut my mouth and continued my work of tying small bags of milk powder.

This got me to thinking. Is our way the best way? It works in America and we all know the game. But if 90% of a village can not afford the full bar of soap, then perhaps it's the "right thing to do" to divide the bar evenly and sell at prices people can afford. Is it now a moral dilemma? I remembered reading something about this in economics, but the actual term seems to have escaped me.