Your entire argument seems to hinge on silk (or palladium, or tritium) being uniform in price. In silk's case that's demonstrably false: https://www.thepricer.org/silk-fabric-cost/
Comparing to precious metals, on that note, is folly; there's a fixed amount of said precious metals on Earth, whereas one can always breed more silkworms and plant more mulberry trees to feed them. That is: the supply of palladium and tritium is inelastic, while the supply of silk is elastic. Put simply:
> There is a fixed cap of most other things.
And silk is not among them.
Regardless of that elasticity of supply: if Wal-Mart buys silk from your silk-seller at $40/yard, do you think Wal-Mart is inclined to resell it at $40/yard? A 0% profit margin leaves Wal-Mart with zero reason to buy and resell silk; either Wal-Mart has to raise the retail price or has to negotiate for a lower wholesale price.
(This is, mind you, assuming Wal-Mart has precisely zero costs w.r.t. inventory management and retail sales; in practice, buying silk for $40/yard and reselling it for $40/yard would represent a loss)
As a result...
> The silk seller returns your laugh. "That will be $40 a yard still."
...and Wal-Mart laughs back, saying "aight we'll go to your competitor". Your silk seller's competitor hired a bunch of those TikTok-inspired young adults to raise silkworms and harvest/sort/boil/defloss/reel/twist/dye/weave their silk, such that labor costs drop by $5 per yard. As a consequence...
> The price of silk does not move. Not one inch.
...said competitor responds to Wal-Mart with "sure, we can do $35/yard", thus securing a hefty chunk of revenue while letting Wal-Mart handle all the intricacies of retail sale. Your silk seller now bears the opportunity cost of refusing to differentiate between wholesale and retail prices. Sure, this particular silkmonger could sell direct to consumers, making him a competitor of both the other silk seller and Wal-Mart... but now he's bearing the costs of silk selling itself and the costs of pursuing a bunch of individual retail customers, and very likely doing the latter far less efficiently than Wal-Mart due to the vast differences in economies of scale.
Your entire argument seems to hinge on silk (or palladium, or tritium) being uniform in price. In silk's case that's demonstrably false: https://www.thepricer.org/silk-fabric-cost/
Comparing to precious metals, on that note, is folly; there's a fixed amount of said precious metals on Earth, whereas one can always breed more silkworms and plant more mulberry trees to feed them. That is: the supply of palladium and tritium is inelastic, while the supply of silk is elastic. Put simply:
> There is a fixed cap of most other things.
And silk is not among them.
Regardless of that elasticity of supply: if Wal-Mart buys silk from your silk-seller at $40/yard, do you think Wal-Mart is inclined to resell it at $40/yard? A 0% profit margin leaves Wal-Mart with zero reason to buy and resell silk; either Wal-Mart has to raise the retail price or has to negotiate for a lower wholesale price.
(This is, mind you, assuming Wal-Mart has precisely zero costs w.r.t. inventory management and retail sales; in practice, buying silk for $40/yard and reselling it for $40/yard would represent a loss)
As a result...
> The silk seller returns your laugh. "That will be $40 a yard still."
...and Wal-Mart laughs back, saying "aight we'll go to your competitor". Your silk seller's competitor hired a bunch of those TikTok-inspired young adults to raise silkworms and harvest/sort/boil/defloss/reel/twist/dye/weave their silk, such that labor costs drop by $5 per yard. As a consequence...
> The price of silk does not move. Not one inch.
...said competitor responds to Wal-Mart with "sure, we can do $35/yard", thus securing a hefty chunk of revenue while letting Wal-Mart handle all the intricacies of retail sale. Your silk seller now bears the opportunity cost of refusing to differentiate between wholesale and retail prices. Sure, this particular silkmonger could sell direct to consumers, making him a competitor of both the other silk seller and Wal-Mart... but now he's bearing the costs of silk selling itself and the costs of pursuing a bunch of individual retail customers, and very likely doing the latter far less efficiently than Wal-Mart due to the vast differences in economies of scale.